Five Keys to Finding Success on Kickstarter for Sustainable Food Entrepreneurs
September 17, 2012 | Nicola Kerslake
Over its three year life span, Kickstarter, a crowdfunded donation site, has become quite the boon for sustainable agriculture entrepreneurs, raising $9.1 million in funding for 846 food projects. Indeed, many of the startups profiled here at Seedstock, such as Freight Farms, Cloud 9 Rooftop Farm, and Bitponics are Kickstarter graduates.
Until recently, there wasn’t a great deal of data to tell us what works when putting together a Kickstarter campaign. The company has been criticized for not publishing the success rates of projects, and a number of blogs made valiant efforts to calculate these in the absence of official numbers. In June, Kickstarter began tracking statistics, and this, along with the increasing maturity of the site, has led to a plethora of advice to would-be fundraisers. The gist of most of it is that you should keep your target raise fairly small, bolster your social network before you launch your campaign, and try to get your project featured on the site’s home page for the maximum chances of success.
Sustainable agriculture projects generally fall into Kickstarter’s food category, which is one of the smaller ones, making up only 3% of all projects, the behemoths being film and video, games and music, as befits Kickstarter’s focus on creative projects. As it’s so small, there’s been little in the way of analysis specifically on the food category, but we found three sources of data to work with; Kickstarter’s own statistics, an awesome April 2011 GitHub study, and an analysis that we put together ourselves based on data from the Kickback Machine website. The latter tracks historic Kickstarter projects, both successful and failed, so we were able to cull 256 food projects from the past three months.
After crunching through these figures, we identified five characteristics of successful food projects:
- Even foodies need Facebook friends. Marketing guru Seth Rodin argues that Kickstarter is a good way of organizing your tribe of followers, not a way of building yourself a following. A decent set of Facebook friends is a prerequisite to a successful campaign. This holds for food projects too, with failed campaigns having an average of 385 Facebook friends, compared to 427 for successful ones.
- You can ask for more than a movie guy. The general rule of thumb is that smaller projects are more successful than larger ones, but – in the food category – you can get away with larger projects than are fruitful in other categories. There were fewer food projects raising under $5,000 than for all categories, and more raising in the food category “sweet spot” of around $5,000 to $15,000. That said, successful food projects had fundraising targets ($12,767) that were more than $1,500 below those that failed (target of $14,345).
- You’re not the next Pebble Watch. In early May, Pebble Technology raised $7.8 million in three weeks for its Android-compatible Pebble Watch, above its $100,000 target. In the process, it became the first Kickstarter campaign to capture widespread public attention and has led to unrealistic expectations of Kickstarter’s fundraising potential in some quarters. Food projects don’t tend to generate such largesse; we found that successful projects were on average 18% oversubscribed, and that they were more likely to be just a little (up to 5%) oversubscribed than successful projects in other categories.
- Location, location, location. One Kickstarter-wide study noted that successful projects were clustered around traditional creative hubs, such as New York and Los Angeles; “the higher the proportion of creative individuals in a founder’s city, the higher the chance of success for that founder”2. Though there’s not yet enough data to be statistically significant, it looks like food projects will follow the same pattern, with the top 5 cities – New York, Los Angeles, San Francisco, Portland, Detroit – corresponding with sustainable agriculture hubs around the country.
- Value added is king! When we categorized food projects, we found that value added products were the largest category, making up a third of successful projects. Subjects that sprang up more often than seemed logical were cupcakes, ice-cream, and bee keeping.
When an earlier generation of websites, such as Amazon and EBay, were finding their footing, we saw gradual changes in the ways that consumers behaved in their interactions with them. To date, it looks like Kickstarter is following exactly the same path as sustainable agriculture entrepreneurs find ever better ways to galvanize support for their projects.
Nicola Kerslake is a real assets investor, entrepreneur & advocate and maintains the blog, Real Assets Junkie.
 Kickstarter statistics
 Based on data gathered from Kickbackmachine for June to August 2012
 Mollick, Ethan R., The Dynamics of Crowdfunding: Determinants of Success and Failure (July 25, 2012). Available at SSRN: http://ssrn.com/abstract=2088298
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