We love Kickstarter. As a matter of fact we’re going to be launching our own Kickstarter campaign for a product designed by our subsidiary, Sunbird Solar Ltd.
We’ve noticed, however, that many hardware campaigns are having problems meeting deadlines, or even delivering at all. We’re very familiar with all the problems facing hardware startups. Unless they’ve budgeted for all the incidentals they may not have enough money to actually bring their product to market.
Here is a list of expenses you might not know you need to account for:
There are plenty of others, but these are the ones that tend to surprise hardware startups. They also tend to find out about them when they’re just about ready to ship and have exhausted their funding.
There are some other pitfalls to watch out for, as well. If your pricing strategy doesn’t include compensation for managing the retail channel then you may have accidentally burned that bridge.
It’s certainly possible to stay small and stick to online sales. You’ll be able to offer lower prices and have a more direct relationship with your customers. That’s a beautiful thing. It also brings to market great ideas that may not have mass market appeal. That’s perhaps the biggest benefit of the Kickstarter model. We’re happy to work with startups that just want to carve out their niche and be the best at it.
Other ideas are world changing and have broad appeal. In order to scale these ideas then the manufacturing costs, retail channel expenses, and even the cost of day-to-day operations need to be considered in the pricing model. It might seem presumptuous to create some detailed financial plan when you don’t even know if you’ll get funded, but it is always good to plan for success. If you create one of the many million dollar success stories on Kickstarter you’ll want to make sure you have the financial resources to cover all the associated costs and hopefully still have a little left over to pay yourself.
Drop us a line before, during, or after your campaign. We’ll be happy to share our insights with you.