Crowdfunding site Kickstarter, which has almost become the ‘Kleenex’ of the crowd-sourced funding world in terms of brand recognition, today unveiled two changes to its business model (via The Verge) that will have a huge impact on non-equity crowdfunding in general and on its main rival Indiegogo. Basically, Kickstarter is simplifying its rules and relaxing the barriers for entry, even introducing a “Launch Now” feature that allows project creators to bypass the network’s approval process entirely.
That means that what you see on Kickstarter is no longer necessarily vetted for feasibility or content standards – which means fewer guarantees that hardware projects, which typically have a low incidence of success anyway, will ever make it to market. But Kickstarter appears to have decided to stop fighting the tide and go with the flow; now it can unapologetically embrace its role as a community-driven mechanism for investing in ideas, instead of even pretending in any way to be a pre-order store for devices.
Kickstarter has also trimmed its rules for creators document, cutting it by over two-thirds from 1,000 words down to 300, and previously banned campaign types including bath and beauty projects, as well as multiple reward items for hardware projects are now allowed. Non-developers can offer app projects, too, though charities, GMOs and photo-style renderings that might mislead people into believing a graphic is a photo are still off-limits, the Verge reports.
Approvals for projects are now done algorithmically, instead of employing human moderators initially, and if they pass that process (which can take as few as five minutes) they’re free to go live. It’s a very different take on crowdfunding to the one Kickstarter initially espoused, and one that in many respects deemphasizes community and instead puts the focus on growth. It’s not quite Indiegogo’s stance of neutral network operator, but it’s much closer to that vision, and it means we should see a whole host of new projects on the site that we’d never have seen before.
For creators, this is obviously good news. I’ve spoken to many who have been frustrating at the Kickstarter approval process and had their enthusiasm bogged by subtleties in the rules that prevented them from launching. Many of these would decamp to Indiegogo as a result. But it could also be an issue for the network long-term – if overall quality takes a hit, that might ultimately affect any single project’s chances of success. Discovery could also become a problem as the projects ranks swell.
Kickstarter has clearly evaded the risk of the backer community souring based on frustration and failed projects however; it’s been 5 years since it launched, and so far, it continues to attract backers and churn out successful campaigns. It’s a new type of beast, and half a decade has been time enough for its users to become accustomed to its identity as not-quite-store but not-quite-charity.
This also presents an opportunity for other startups looking for ways to embrace the crowdfunding trend – less editorial oversight by Kickstarter itself means users will be looking elsewhere for a filter for the network, for curation and for alternate models. Kickstarter may become the Amazon of crowdfunding, but there’s still room for boutique stores, Pinterests and Shopifys in the space, too.