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There are about a dozen notable software projects that raised money on Kickstarter, but it's a tiny percentage compared to the total. Font Awesome, Light Table
by simple10 7y ago
There are about a dozen notable software projects that raised money on Kickstarter, but it's a tiny percentage compared to the total.
Font Awesome, Light Table, LiveCode, Lavabit, Diaspora, Ghost, NoFlo Flowhub, Hypothes.is, etc. used Kickstarter to fund parts of their projects. See Kickstarter Technology > Software category [1]. There's a steep drop off from amount raised by notable projects to all other software projects.
The total amounts raised by software projects is significantly less than other categories like hardware, board games, and art. Mostly this is do to 1) how Kickstarter rewards work, 2) how Kickstarter marketing works, and 3) the psychology of backers and existing angel investors.
It's hard to come up with good rewards for software projects. Since Kickstarter does not allow equity rewards, the only option is a discount or tangential reward like a t-shirt. People are already accustomed to seeing special deals or bundles for software that's already built. Giving a 50% discount or lifetime access on Kickstarter is typically not enough for potential backers to take the risk for a project in prototype or concept stage.
Projects that raise $100k+ in any category are almost exclusively driven by marketing. Ads, influencers, email lists, cross promotions, etc. Kickstarter will give an algorithmic discoverability boost to projects that are generating a lot of sales, but you pretty much have to bring your own traffic.
Kickstarter marketing agencies almost always pass on helping software projects. Disclaimer: I have a marketing agency and get a lot of inbound requests to help with software, which I turn down. Kickstarter marketing is already a niche (about 1M backers in the USA) and narrowing further down to software makes the niche too small to work on most ad platforms.
Software projects with large built-in audiences or existing customer bases have used Kickstarter to fund new milestones. See Lavabit Dark Mail Initiative [2]. But we don't see this very often since the risk to reward ratio isn't in the project's favor. It's unlikely that a software project will get a lot of organic exposure on Kickstarter. Most of the backers will be existing project users.
Due to the public nature of Kickstarter and limited campaign length of max 60 days, there's a high risk the raise will be seen as underperforming by the public or existing angel/VC investors.
Summing it up... if you want to raise money for software by pre-selling at a discount, you might as well just do it through Stripe and save yourself the 5% Kickstarter fee and hassle of doing a Kickstarter campaign.
[1] https://www.kickstarter.com/discover/advanced?category_id=51&sort=most_funded https://www.kickstarter.com/discover/advanced?category_id=51...
[2] https://www.kickstarter.com/projects/ladar/lavabits-dark-mail-initiative https://www.kickstarter.com/projects/ladar/lavabits-dark-mai...
- sroussey 7y agoThank you for such a detailed answer.
- sroussey 7y agoI am curious if KS can improve marketing spend for software project, where the success of a project is story in and of itself.
- simple10 7y agoI've wondered this as well. I think the idea of a small-team open source project funded on KS in milestones is feasible. However, the promotion would need to be handled by the community and backers vs the developer team. Otherwise the time and monetary cost of frequently running campaigns on KS would be too high of a distraction. I also think there's room in the market to create a KS alternative specifically for software that actually helps with promotion.