CASE 10 .1
Kickstarter : A New Forum for Raising Seed Capital for For-Profit and Nonprofit Organizations
Introduction
Kickstarter is a fund-raising Web site for creative projects. It’s a platform referred to as “crowdfunding,” in that it helps individuals and organizations raise money from the general public. Kickstarter was started in April 2009 by Perry Chen, Charles Adler, and Yancy Strickler. Since then, it’s collected nearly $40 million in pledges to help fund projects as diverse as creating an iPhone 4 tripod and mount to helping an author publish a guide to hidden art galleries and museums in Tokyo. Kickstarter receives between 100 and 200 new project requests per day. Projects are accepted if they follow Kickstarter’s guidelines. The primary requirement is that a project must be creativity-oriented. Kickstarter does not fund charity projects or causes.
How It Works
Once accepted, you use tools provided by Kickstarter to set up your fund-raising campaign. The campaign, which is displayed at Kickstarter.com, includes a description of your project, a video pitch (not required but recommended), the minimum amount of funds you need, and a deadline. If the minimum isn’t reached by the deadline, pledgers receive their money back. Pledges are tiered ($25, $50, $75, etc.), with each tier earning a certain incentive. The incentives are “thank- you” gifts or tokens that the person initiating the campaign gives to the people who make the pledges. Kickstarter has taken several steps to govern the integrity of its campaigns. Money pledged by donors is collected using Amazon Payments. Kickstarter claims no ownership over the projects and the work they produce. It makes money by retaining 5 percent of the funds raised.
Kickstarter doesn’t allow people to raise money to start a business, per se. It does allow businesses to fund “projects,” like the Heidi Ho Organics campaign described later. The funding of arts and music projects are the most popular. If a project exceeds its goal, the project initiator is able to keep the amount in excess of the goal, less Kickstarter’s 5 percent. The highest grossing Kickstarter project was TikTok + LunaTik watch kits, which turn an iPod nano into a multitouch watch. The campaign raised $941,718, which was 6,283 percent of its goal. The second highest grossing project was Blue Like Jazz, a movie. That campaign raised $345,992, which was 276 percent of its goal. Kickstarter maintains an active blog at blog.kickstarter.com. The blog is fun to read and highlights Kickstarter’s most successful and unusual campaigns. The investment community has noticed Kickstarter. The response has been mostly positive. Ron Conway, a prominent Silicon Valley angel investor, was quoted in The Christian Science Monitor regarding his take on Kickstarter. Mr. Conway remarked:
Kickstarter is another very creative way for com- panies to get funded. And in my opinion, the more companies that get funded, the more innovation there is out there and, hence, technology advances and the USA continues to create jobs in technology. I think it could become a category that’s a meaningful way for companies to raise money.
As of April 2011, Kickstarter had 787,700 members.
Typical Kicstarter Project
Here’s a typical Kickstarter campaign. Heidi Ho Organics is a vegan food company started in 2010 by Heidi Lovig. Working mostly alone, Lovig has created a range of plant-based vegan cheeze products made from natural, organic ingredients without any additives, fillers, or preservatives. Currently, she is limited to making two pounds of cheeze at a time using a home food processer. Her Kickstarter campaign, which was underway when this feature was written, was to raise $12,245 to buy equipment to increase production and distribution of her cheeze products to local food co-ops. Her long-term goal is to help stimulate local economies around the world by building small subproduction facilities, similar to her facility in Portland, Oregon, to make plant-based vegan cheezes from locally sourced ingredients. The day this case was written, Lovig had 66 backers who had pledged $7,650. Her campaign had eight days to go, and needed to raise an additional $4,695 to be successful.

Lovig included a heartfelt pitch on her Kickstarter page, describing the equipment she needs and how it will help her initiative take off. She’s also offering the incentives
How to run a successful Kickstarter Campaign?
There are several things that people who have run successful Kickstarter campaigns learn. First, Kickstarter shouldn’t be thought of as a tool for funding one-off projects or events. Instead, it’s best to think of it as a mechanism for providing seed capital to help a project or event get up and running, and then grow it from there. Second, it’s important that the person or organization that initiates a Kickstarter campaign promote it. Most people who contribute to a specific campaign don’t find it by chance. Instead, they go to Kickstarter.com looking for it. In the table shown next, several methods for promoting a Kickstarter campaign are listed. Third, the majority of donations are made at the beginning and the end of campaigns. As a result, shorter campaigns are typically more effective than longer ones. Four to five weeks seems to be the sweet spot. If a campaign is too long, people lose interest. Fourth, it’s important to not set your financial goal too low. If a Kickstarter campaign is successful, it tends to quickly lose momentum once it reaches 100 percent of its goal—even though more money can be collected. Finally, it’s imperative that a video pitch be included. It’s much easier to donate money to a person or organization’s project if you can hear someone talking about it and see the passion in their eyes.
What’s Ahead?
Kickstarter has no immediate plans to broaden the scope of its platform. It does have competitors, including RocketHub and IndieGoGo, but those sites pale in comparison to Kickstarter’s volume of projects. There are areas in which Kickstarter is becoming more adventurous. For example, in mid-2010, it held its first Kickstarter Film Festival featuring projects that were fun ded via Kickstarter. The festival included a menu of Kickstarter-funded snacks. There was also music from the Zlante Uste Balkan Brass Band, the focus of the Kickstarter-financed documentary Brasslands.
Discussion Questions and Answers
1. Do you think Kickstarter is a viable alternative to raising equity funding or debt financing? If so, under what circumstances?
Yes I think Kickstarter is a viable alternative to raising equity funding or debt financing. Under a project with clear purposes. Certain projects with creative ideas, crazy ideas, interesting ideas that people has been needing or searching for.
Where equity funding or debt financing is not possible or lacking
2. Kickstarter is not the first crowdfunding platform, yet it is the most successful. List five reasons that you believe account for Kickstarter’s success.
• Transactional element
• “Backers”
• The company carefully screens each project
• The stories
• If the project is not successfully funded, the backers will get their money back
3. The city of Portland, Oregon, recently set up an official curate page at Kickstarter. (www.kickstarter.com/pages/ portland). Is this a model for other cities to follow? Is it a potentially effective way for cities to promote arts and entrepreneurship? How should cities go about promoting their Kickstarter pages?
Kickstarter is potential to be a model to follow by other cities and also potentially affective because through kickstarter of project will be able to begin and it is such a ggreat way to start a project that you need funds on, and it comes from people who are willing to fund it. There are ofcourse some ways to promote kickstarter pages, they can put it on the newspapers, tv, or they can put it on the social media. Advertisement, News segments e.g. compas newspaper/ Metro TV, Billboard, flyers, Google, and etc.
4. Do what degree do you believe Kickstarter itself is a successful start-up?
Many young entrepreneur with great idea but no capital to execute the idea
The market is very wide: any age, gender, race, personality, and type of product. The idea that manages to attract investors represents the likehood of the successful business, so the market researching through this.

Application Questions and Answers
1. Look at Kickstarter, RocketHub, and IndieGoGo. At each site, listen to three of the video pitches. Try to find pitches of business projects. List the three pitches you listened to at each site and which one you found the most compelling. Also, compare and contrast the crowdfunding approaches of Kickstarter, RocketHub, and IndieGoGo.
Yes, it is viable, because usually it is possible to do this in such circumstances like for example a project with clear purposes which will make people see the clear picture or certain project with creative ideas, interesting ideas that people has been needing or searching for which will be an interesting market. Where equity funding or debt financing is not possible or lacking. In this such circumstances it is viable
2. How can Kickstarter’s business model be used in other areas? Make at least two suggestions.
Kickstarter business model : crowdfunding (funding a project by raising monetary contributions from a large number of people)
Other areas :
• Government projects
• Science projects

ANALYSIS

View Point : Kickstarter, Perry Chen, Charles Adler, and Yancy Strickler.
Time Context : mid 2009s - now
Masalah Utama : Bagaimana caranya agar Kickstarter dapat menjadi website yang lebih unggul dalam tmepat pencari atau penggalangan dana dalam suatu rencana bisnis (Business Plan)? Rumusan Masalah :
• Kesulitan apa yang dialami oleh Perry Chen, Charles Adler dan Yancy dalam memulai bisnis ini?
• Apa yang membuat kickstarter.com lebih istimewa dibandingkan kompetitor lainnya?
• Apa yang membuat Perry Chen, Charles Adler dan Yancy untuk memulai business plan mereka dengan membuka website tersebut?

Objektif :
Must : menjadi tempat/websiter terpercaya yang digunakan untuk penggalangan dana
Want : agar kisckstarter.com dapat menjadi bagian yang membantu seseorang dalam memulai sebuah bisnis

Area of consideration :
Internal :
• Mencari ide-ide bisnis yang baru
• Memberikan Modal yang cukup dalam menjalankan usaha tersebut
• Berkomunikas secara baik antara atasan dengan bawahaan.
• Memberikan pengajaran kepada karyawan agar cara bekerja lebih baik lagi dari hal pelayanan maupun kualitas pada makanan yang akan disajikan oleh mereka.
• Memotivasi para kinerja
• Mencari sumber daya manusia yang baru.
External :
• Mengetahui kelemahaan dan keunggulan pada kompetitor
• Mengunakan strategi baru jika strategi yang lama telah dicontoh oleh kompetitor.
• Mengetahui Keunggulan dan kelemahan pada ide bisnis yang baru.
• Siap dalam menghadapi kompetitor yang baru.
• Memonitor setiap kompetitor yang ada.
• Mencari partner yang dapat membantu memasarkan dengan baik.

Alternative course of action :
• Mengetahui ide bisnis yang akan dijalankan, merancang strategi baik dalam pemasaran, maupun strategi untuk mempertahankan dari kompetitornya. menentukan target pasar kemudian mengumpulkan modal dan mencari sumber daya.
• Mengempulkan modal yang dibutuhkan dalam pembuatan bisnis lalu menetukan ide bisnis yang dibuat sesuai dengan modal yang dimiliki kemudian mencari sumber daya.
• Mengetahui ide bisnis yang akan dijalankan kemudian mengumpulkan modal yang dibutuhkan dan terakhir mencari sumber daya yang berkualitas.

Recommendation :
Mengetahui ide bisnis yang akan dijalankan, lalu merancang strategi, menentukan target pasar kemudian mengumpulkan modal dan mencari sumber daya.
Action Plan :
• Kickstarter.com bukan hanya website yang digunakan untuk menjadi tempat penggalangan dana tetapi diberi jasa lain yang dapat membantu dalam kegiatan bisnis seseorang.
• Kickstarter.com menjadi tempat/website yang utama dalam menjadikannya tempat untuk mencari investor/penggalangan dana.

Contingent Plan :
• Kickstarter.com dapat memberikan pelayanan atau manfaat yang lebih yang dapat dipergunakan oleh konsumennya
• Kickstarter.com dapat memberikan suatu inovasi baru dimana bukan hanya menyediakan layanan untuk mencari investor tetapio menjadi wadah bagi seseorang untuk mendapatkan sesuatu yang baru seperti pekerjaan atau menyajikan informasi-informasi seputar bisnis.