The traditional route for startups to bring great product ideas to market was to fund them directly or find willing venture capitalists to invest. The advent of crowd platforms such as Kickstarter and Indiegogo have dramatically changed the product funding landscape, and this is as true for photography as elsewhere. So, should you buy products from the likes of Kickstarter?
If you have a great idea for a product, then there can be no better feeling than taking that initial idea through to successfully selling a physical product. Believing in something and then seeing it become a reality must be wonderful, equally as seeing it fail can be heartbreaking. Of course, bringing products to market can be an expensive business, and this is typically funded from your own cash reserves or a bank. If you need more than they can provide, then venture capital and private equity are common routes. However, "business angels" in the form of support groups and investment clubs are increasingly important; crowdfunding broadly falls in this area and Kickstarter and Indiegogo are examples of businesses that allow individuals to directly invest in the products themselves.
Kickstarter and Indiegogo
In terms of bringing products to market, Kickstarter and Indiegogo fund the most and have the biggest reach; it's also important to note that they differentiate themselves from other personal and subscription crowdfunders such as Patreon and GoFundMe, with Kickstarter requiring you to "create" something. Indiegogo is perhaps a little more flexible on this front. Of course, Kickstarter and Indiegogo are different in other ways. Kickstarter generally has higher project standards, requiring an application process with a working prototype in order to launch (not the case with Indiegogo). With Kickstarter, if you don't raise your target amount, you get no money meaning that it should be as low as practical. Indiegogo allows a flexible funding goal. Crucially for investors, Kickstarter doesn't take the money until after the project is funded which means you can pull out before that point.
Types of Project
Within this new ecosystem of direct funding, a range of different projects have sprung up that might not fall within the stereotypical "individual trying to bring a product to market" category that we envisage. In general, I see four broad different types of funding campaigns:
1. New to Market
These are products that we traditionally think of when it comes to crowdfunding. You have a great idea and try to bring it to market. One current example seeking funding is the Reveni Labs Spot Meter, which aims to produce a smaller, better, and cheaper spot meter (see beta reviews), following on from its successfully delivered Light Meter. Or the original Intrepid 4x5 large format wooden camera, which also successfully delivered a new product and was the start of a new business. However, we are also seeing photographers bringing content to market in this manner. Nico's Photography Show produced a video and prints documenting the Intrepid Camera Company or Bicycle Portraits by Stan Engelbrecht and Nic Grobler. In fact, if you search for "photobook" on Kickstarter, you'll find 657 projects of which Like of Pikelet is the most funded. All in all, these types of projects are a great way to support creatives and find new and interesting product ideas. Fstoppers' Dylan Goldby gives some more advice on crowdfunding photobooks.
2. Pre-Production Sales
This is a broad category that I consider pre-production sales for a known brand. One of the problems of bringing any new product to market is cashflow, which can be a risk for the manufacturer. If you are trying to minimize this — particularly if you are a small manufacturer — then crowdfunding offers a route to pre-production income, at the cost of (usually) lower sales prices and the crowdfunding commission. Peak Design and WANDRD are great examples of quality manufacturers that bring a range of products to market in this way, something Fstoppers' Andy Day has commented on. All in all, this is a win-win situation for the manufacturer and backer.
3. Vaporware (Failure)
OK, let's talk about the elephant in the room: some crowdfunding campaigns fail and none more spectacularly than the ignominious Zano drone. This raised £2.3M in 2014 on the back of 14,000 orders, delivering just four to backers. Projects fail. Period. That's the nature of crowdfunding.
Crowdfunding will inevitably attract scammers that lure people in "investing" their money, even if they have no intention of delivering a final product. Kickstarter, through the nature of having an application process and requiring a working prototype, is perhaps a little more resilient to these types of projects, although Canon Rumors reported concerns about the X-Tra Battery.
So Should You Invest in Crowdfunding?
Should you invest through crowdfunding? Fstoppers' Alex Cooke thinks not. As with any kind of investing, there is always a risk-reward associated with a product you back. Just because the project description has a sassy video and images of shiny new products doesn't mean that they will actually deliver anything. Buyer beware — as ever — is the mantra to hold close to your heart. Over the years, I have backed a small number of projects, including the SunDisc portable softbox/reflector and a coin pouch, both of which were delivered to schedule. I also back the Hedkayse cycling helmet and Spooly USB cable both of which overran by some 2 years. These were more complex products and things almost inevitably went wrong: Hedkayse were exemplary in communication, Spooly weren't, but they both did deliver.
In the same way, you might check out a seller on eBay, do the same for crowdfunding, then look at how much you need to invest and what you will get for it. Unlike eBay, crowdfunding isn't a shop window. These are prototypes and will take time to get into production and so delivery. The simpler the project, the more likely it is to complete.
All of this means, if you have a "new to market" project, scrutinize the creator carefully, then look at the complexity and viability of the product. Back as appropriate. If you are looking at a "Pre-Production Sales" project then you are likely standing on the firmer ground; looking at the line of successful Kickstarter projects from Peak Design should fill you with confidence if they seek further funding.
Have you invested through crowdfunding? What was your experience?