How Kickstarter can solve its product problem

Kickstarter is becoming two businesses, co-founder Yancey Strickler said earlier this year: one that originally began as a way to support traditional artistic projects like film, music and theater and one that showcases technology, design and video game projects.

But this split is causing increasing growing pains for Kickstarter as it tries to deal with the second category, which now represents more than one third of all the money successfully raised. The problem is that people who back these projects have come to think of Kickstarter as a store where they pre-order products, a perception that Kickstarter continues to fight.

The issue was raised again this week when CNN reported that just eight of the top 50 projects with a deadline of November or earlier actually hit their deadline. Most of the delays were for tech, design and game campaigns in which many backers are expecting a finished product for their support. The delays gives rise to concerns that Kickstarter is promising products that may not ever be delivered.

Kickstarter, PebbleStrickler countered in a blog post that lateness doesn’t equate with failure, that many projects need more time to finish and the results are usually worth it. And Kickstarter has stressed recently that it is not a store and isn’t in the business of processing pre-orders of goods. But CNN’s report, however, points out that many people still don’t understand that distinction. When they give, they expect something back as if they’re just pre-paying to get something at a specific time.

So how do we solve this? Here’s my solution:

The company needs to establish a separate platform for Kickstarter hardware and product design projects. It could still be known as Kickstarter (maybe Kickstarter Product?) but spinning out these projects could help Kickstarter set clear expectations for how these campaigns will work. Right now, most of the same rules apply across all Kickstarter campaigns. There have been some changes recently prohibiting the rewarding of multiple units and limiting simulations and renderings of tech and design products. But it’s still not enough for the average user to undertand how these projects are different.

By establishing a Kickstarter Product destination, Kickstarter can emphasize specific rules that protect both creators and backers. For example, there could be an overall limit to the number of delays on these projects, a more specific update policy or a stricter refund policy. Then we wouldn’t get as many people wondering why they’re not getting their pre-orders on time or questioning if they’ll be waiting forever. Clearer rules wouldn’t just help backers but it could give more certainty to creators, so they’re more protected against potential lawsuits should they fail to deliver.

Christie Street, a new crowdfunding platform for hardware projects, shows why a spinoff might be good for Kickstarter. The site, for example, doles out money in three stages so supporters know that a project is making progress before it accesses all of their funds. Users can also pay an additional 10 percent to get their full money back if they want. Christie Street also does some upfront due diligence to ensure a project is actually viable, something that is likely too much work for Kickstarter, which takes a hands-off approach to reviewing submissions. But I think Christie Street shows there is a need for a crowdfunding platform designed for products.

Kickstarter, LifxHaving a more dedicated platform for products gives Kickstarter a chance to focus on this opportunity rather than try to manage it on its original platform, which wasn’t designed for products. A separate platform could also allow Kickstarter to let more projects in. Currently it’s turning away an increasing number of hardware projects that don’t fit its rules, which bans things like home improvement projects, medical and safety-related products and Exercise and fitness products.

I have very little confidence that my idea will fly with Kickstarter. A spokesperson told me the company is not thinking along these lines. And I can see why Kickstarter wouldn’t want to break up its platform. There’s something powerful about saying it is the complete destination for all kinds of creative projects. There is also a danger that breaking out products might actually reinforce the notion that Kickstarter is becoming a marketplace or may cause people to expect Kickstarter Product rules to apply to the main Kickstarter campaigns.

But I think if Kickstarter took action now, it has a chance to shape its relationship with products, rather than have to keep reacting to their growing prominence. And it could reaffirm its commitment to the original artistic projects that threatened to get overshadowed by product campaigns. It wouldn’t be easy, but I think there’s a lot of upside to making formal the split that’s already happening on Kickstarter.