Startups, Don’t Launch On Kickstarter!

Mark Cuban, an entrepreneur and tech investor, said in a NextMarket podcast: „Kickstarter should be a requirement for every startup. It’s a way for you create demand and sell the product without giving up any equity. That is a compliment to what an investor might do. […] I’m not a big fan of money investors, which is what most angel investors turn out to be, because they just want their money back.“

Let me pick one slice of Mark’s statement. Something that can lead to misinterpretations. I don’t think his statement “Kickstarter should be a requirement for every start-up” is a 100% fit for every start-up or one of the blooming ideas you have in mind. And here are three reasons why:

  1. Analyze the most successful Kickstarter campaigns and you’ll see that “DANCE” is the most crowd funded category.
  2. Strategic and multi phased business plans and projects need a deeper understanding that cannot be transferred via a crowd funding platform
  3. Stealth mode helps you to cover your big idea or at least your line extensions

Why and when is Mark Cuban right? Here are three reasons:

  1. Use Kickstarter for hardware. This category is always easy to understand. You can simply imagine how hardware products will look like in your home or outdoor environment.
  2. Use crowd sourcing platforms to create marketing buzz. Maybe it’s a sily line extension which can add to your existing business plan. The media and especially bloggers love to write about silly or ridiculous ideas.
  3. Use Kickstarter or any other platform to create your first consumers (like Slim – the thinnest wallet ever did)

I wrote Mark an email on LinkedIn but he didn’t come back with an answer yet.
Also: Check my blogpost „6 tips to raise money via crowd funding“ here on Bagaboo.de.

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