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Making the decision to do a crowdfunding campaign is a difficult one, but once you've committed to raising money through pledges your next step is choosing which crowdfunding platform is right for you.
There are three clear leaders in the crowdfunding platform space - GoFundMe, Kickstarter, and Indiegogo.
GoFundMe is a platform for personal fundraising, meaning raising money for individuals or charity. So if you are an entrepreneur or established business, this won't be a big resource for you and therefore I won't cover it here.
That leaves us with Indiegogo and Kickstarter...which one will it be? Which one should you choose? Both platforms have their positives and negatives, but it really comes down to the kind of product you are planning to launch on the platform to determine which one you will ultimately choose.
In general, there are a few crowdfunding rules of thumb to consider before selecting a platform or even deciding if crowdfunding is right for you.
Your product or idea typically needs to be a tangible item to be successful, so in this case, apps or software of any kind don't seem to work for the crowdfunding audience.
It needs to be created for consumers and not a B2B product. There aren't a whole lot of businesses looking for suppliers on either platform.
Finally, stay away from MLM or get rich quick schemes. The Kickstarter/Indiegogo audiences are extremely savvy and will tear you apart for any sort of trickery or deception (as they should).
What Will Work on Indiegogo vs. Kickstarter?
Both Indiegogo and Kickstarter have their success stories and often products do well on both platforms, but how do we differentiate the two platforms and finally which one do you choose?
Typically Indiegogo's audience tends to be functionality focused, while Kickstarter's audience tends to be design focused. This means that categories like home automations, laptops and gadgets do better on Indiegogo and categories such as interior, wearables, travel, photography do better on Kickstarter.
Another differentiator between the two audiences is cost. Kickstarter followers tend to be less price discerning and more open to getting the best possible product providing there is a clear competitive advantage in functionality and design. Whereas the Indiegogo audience tends to be more price conscious and wants the best deal for highly capable products.
Making the Decision
As in any major business decision, begin with research. Look at other products in the same category as yours and see what their success rates on Indiegogo vs. Kickstarter. How many successfully funded projects are on each platform in that category? What was the overall funding like? Can you see the barriers? There are extensions and tools, like Backerkit, that can also help with this research.
Kickstarter
Kickstarter was the first successful crowdfunding platform and continues to be the leader in terms of most projects (over 180,000 successfully funded projects), dollars raised (nearly $5 billion), and over 18 million backers (one third of which support more than one project). Now those are some impressive stats! However, one thing to note is that only 37.7% of all projects on Kickstarter are successful. That means that over 60% fail, essentially not hitting their goals.
That's an important thing to note, because with Kickstarter, which differs from Indiegogo, you do not receive your funds if you do not hit your campaign goal. So, your backers do not have to pay if your goal isn't met with pledges. This puts a lot of pressure on the project creators to develop a realistic goal that can be hit relatively quickly.
Kickstarter is a great place for art projects of any kind, like albums, videos, songs, paintings, prints, games, most notably table top games, and design-forward technology in more recent years. The Kickstarter community is extremely supportive of their creators and you get a lot of cross-promotion opportunities among creators.
With all of Kickstarter's successes comes a few warnings too. The Kickstarter community is very stringent with their rules. They manually review all projects and you must pass the review process to move on. The main rules to be aware of to even get started are:
No personal projects (it must be something you can share)
No charity
Must be a tangible product (at least a working prototype and not just an idea)
Funds cannot be exchanged for equity
These rules will be enforced no matter what. Some project creators learned the hard way after raising millions of dollars. If there isn't a working prototype, Kickstarter will suspend you.
As you can see, Kickstarter tends to be more conservative in their approach and that continues with their page builder, look and feel of the rewards, and most design elements. However, they do offer more levels of rewards than Indiegogo, 50+ rewards vs. Indiegogo's 20 perks levels, and Kickstarter has better messaging and update options than Indiegogo.
In my experience with crowdfunding projects, on Kickstarter, the community is a large focus and tends to be more involved. Sometimes just keeping up with your inbox, answering questions or requests for partnerships and cross-promotion from the community can be challenging. The community feels more connected to the creators on Kickstarter and at times can overstep boundaries through public comments to the creators, so prepare for lots of dialogue here and make sure you have a solid plan for your project because you will be answering to the community.
Additionally there is a large international population on Kickstarter, so if your product is a domestically-focused product (i.e. an outlet made for North American standard plugs) then you want to keep that in mind when you set your campaign goal. Meaning that your actual pledges will be affected by the make up of the Kickstarter community. This can also affect advertising opportunities if you decide to go down that road.
Finally one of the biggest takeaways with Kickstarter is that you only receive the funds if your project is "successful". How does that work? Well, when creating a campaign on Kickstarter, you have to first set a goal for how much money you would like to raise (what you need to complete your project). If you do not hit this goal through pledges from the community or your own resources in a determined amount of time, then you do NOT receive the funds pledged. If you do hit your goal within your allotted campaign timeline, then you do receive the funds less a little bit (typically pledges drop off between 5-10% when you go to collect the money).
Indiegogo
Indiegogo is a more flexible platform and although it was initially built for independent films (hence the name), it quickly evolved to be more entrepreneur-friendly. Indiegogo's platform makes crowdfunding easier for creators and less focused on the community. Indiegogo provides more categories for projects than Kickstarter (28 vs. 15) and allows creators to choose whether they want a fixed (all or nothing) or flexible (creator gets whatever pledges they collect) models. They also have In-Demand, which allows creators to move their project from the crowdfunding timeline of 60 days or less to an on demand buying platform more like ecommerce.
Indiegogo by the numbers - it has launched over 800,000 ideas with 9-million supporters (IGG's version of backers) and has about 1,200 live campaigns and 1,800 InDemand campaigns running. Compared to Kickstarter's 37.7% success rate, Indiegogo's is more like 17-18%. Good statistical data is harder to come by for Indiegogo than Kickstarter, and anything you do find is usually an estimate.
Indiegogo may not boast huge success rates, but with many of their campaigns you don't need to hit your goals to receive money (if you choose the flexible model). Another positive for Indiegogo is that their customer support team is incredible and happy to help creators to be successful, whereas Kickstarter's customer support team can be hard to reach and at times unhelpful. Indiegogo will also help creators from a marketing aspect by featuring them in their email marketing to the community and understanding the algorithms for being featured on the homepage or other hot spots on the site.
Indiegogo does have similar rules as Kickstarter in order to be considered for a project, however, they are much more flexible and willing to work with creators to adapt their project or the rules to increase participation. Here are the eligibility requirements for Indiegogo that are similar to Kickstarter:
You are 18 years of age or older.
You are a legal resident or have a business entity registered in one of the listed eligible countries.
You are creating a campaign in your own name, or on behalf of a registered legal entity with which you are affiliated.
You have an address and bank account from the country in which you are creating a campaign.
If running your campaign as an individual, the linked bank account must belong to the person who verified their identity for your campaign.
As far as design and building out your campaign, Indiegogo's project builder does offer more options than Kickstarter and they use YouTube or Vimeo for hosting videos which definitely helps from a search marketing standpoint. You can also create "Secret Perks" via Indiegogo in case you want to tailor perks for influencers or VIPs, etc.
Final Thoughts on Indiegogo vs. Kickstarter
Although both platforms are popular and can hopefully help you reach your goal, at the end of the day you will want to pick one and it's mostly going to depend on the type of product and/or campaign you plan to run. However, here are a few final points on the differences between the two.
You are MUCH more likely to get press being on Kickstarter. The media loves Kickstarter and usually notices campaigns without much of a PR push. One of the campaigns I lead on Kickstarter garnered 36 articles in just a few weeks with big name publications like CNet, The Verge, Trendhunter, and Yahoo.
The crowd or community values different things on each platform. Kickstarter's tends to be more involved, more verbal, but less likely to nickel and dime creators. They also tend to be more artists, musicians, gamers, and tech geeks. Whereas Indiegogo's tends to be more small businesses, mass manufacturing, functionality focused, less involved with the projects overall, and more likely to be cost-conscious. Indiegogo also has a more female=friendly audience surprisingly.
If you are a Fortune 500 company, you want to opt for Indiegogo. They have a special program just for Fortune 500s.
In conclusion, Indiegogo is much more flexible, easier to work with and way more supportive, especially if you're an entrepreneur. But Kickstarter has a huge advantage in terms of their built-in community (18 million) and their unique monthly visitors (27-28 million) which can really drive backer awareness and ultimately pledges. The final decision will have to be based on how your product or idea ranks against all of these criteria and what type of platform you'd like to work with - Indiegogo or Kickstarter.
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