One of the biggest hurdles to starting a business is raising the seed money you need to get the project off the ground. Enter the Internet and websites like Kickstarter.com.
Photographer Kate Funk takes pictures of her cat AC, wearing home-made costumes such as wolf man, alien and unicorn. The Kickstarter video profile for her cat calendar describes it as "The World's Most Super-Amazing 100% Awesome Cat Calendar." Apparently, 1,119 people agreed. They pledged a collective $25,183 on Kickstarter, in exchange for calendars, to help Funk expand her business.
Kickstarter helps connect small businesses in the making with people willing to give them money and become their first customers. The website says more than 3.8 million people have pledged over $567 million since it launched in 2009, funding more than 39,000 projects.
One of those projects makes its home in the District. Ricky Choi and Phil Moldavski launched a Kickstarter campaign for their company, Nice Laundry, five weeks ago. By the time the funding project closed at 6:00am, Monday morning, it raised $119,321 from 2,004 backers, well above the original fundraising goal of $30,000.
Choi makes the case for his company this way, stating "guys have terrible relationships with their sock drawers," relationships he and his business partner aim change. They want men to get away from grey and black socks and give patterns and bright colors a shot. Through their page on Kickstarter, people were able to buy packs of their fashion-forward men's socks at affordable prices. Choi says "a six-pack retails for $39, with complimentary shipping." That price point works out to be about $6 a pair, well below the $20 to $40 a pair you'd pay for equivalent socks at luxury department stores. They also sold larger packs.
"A few years ago we would have likely had to go out to friends and family and try to find investment up front to get inventory. Kickstarter is actually the perfect place to share our story," says Moldavski.
If you think it seems too good to be true, put a pitch on Kickstarter.com and strangers give you thousands of dollars, you're right.
"A common misconception is, we're just going to throw something on Kickstarter and let the community take over from there. Kickstarter is like any other website," says Choi. The folks behind the campaign need to invest their time and efforts getting the word out. Choi continues, "you need to drive traffic to it either through outreach to friends and family or PR."
Moldavski says you better have your story refined before the Kickstarter page even sees the light of day. He says that "we took weeks and weeks figuring out exactly what the page should say."
Another lesson learned from successful campaigns, it also helps to have a product or idea or price no one has really seen before. Novelty can be that essential ingredient that separates the good ideas from the million dollar ones.