Kickstarter

Definition

Kickstarter is a crowdfunding platform that helps creators raise funds for their projects by connecting them with potential backers who are willing to support their ideas in exchange for rewards. This platform embodies the principles of open innovation and crowdsourcing, enabling individuals or groups to gather financial resources and creative input from a diverse audience, fostering a collaborative environment for bringing new ideas to life.

5 Must Know Facts For Your Next Test

1. Kickstarter was founded in 2009 and has since helped launch over 500,000 projects, ranging from art and technology to food and fashion.
2. The platform operates on an all-or-nothing funding model, meaning that projects only receive funds if they meet their fundraising goal within a set time frame.
3. Creators often offer various reward tiers for backers, which can include anything from digital downloads to exclusive merchandise or experiences related to the project.
4. Kickstarter has played a significant role in democratizing access to capital, allowing independent creators and entrepreneurs to bypass traditional funding sources like banks and venture capital.
5. The platform not only helps in raising funds but also serves as a marketing tool, providing creators with feedback and validating their ideas through community engagement before launching their products.

Review Questions

• How does Kickstarter exemplify the principles of open innovation and crowdsourcing?
  • Kickstarter exemplifies open innovation by allowing creators to leverage external resources and insights from potential backers while developing their projects. This platform encourages collaboration among a diverse group of individuals who provide financial support as well as feedback on project ideas. By tapping into the collective creativity and preferences of the crowd, creators can refine their offerings and enhance the chances of success in the market.
• Discuss the impact of Kickstarter on traditional funding models for entrepreneurs and creators.
  • Kickstarter has significantly impacted traditional funding models by providing an alternative way for entrepreneurs and creators to secure capital without relying solely on banks or venture capitalists. The platform allows individuals with innovative ideas to reach out directly to potential supporters, democratizing access to funding. This shift encourages more people to pursue creative ventures, leading to a surge in grassroots innovation and empowering diverse voices in various industries.
• Evaluate the long-term implications of using Kickstarter for product development and market validation.
  • Using Kickstarter for product development can have profound long-term implications for creators. It not only helps them secure initial funding but also serves as a valuable tool for market validation. By gauging interest through backer support, creators can refine their products based on direct consumer feedback before full-scale production. This approach reduces the risk of failure in the market and fosters a stronger connection between creators and their audience, potentially leading to sustainable success beyond the initial campaign.

Related terms

Crowdfunding: A method of raising capital through the collective efforts of a large number of individuals, typically via the internet, to fund a new venture or project.

Backer: An individual or organization that supports a project on crowdfunding platforms, often in exchange for rewards or early access to products.

Open Innovation:

A concept that encourages organizations to use external ideas, knowledge, and technologies in conjunction with their internal resources to drive innovation and improve product development.