Over the past few years, the excitement about crowdfunding has been palpable. Every day, more artists, entrepreneurs and innovators embrace the crowdfunding model, seeing it as a way to get their vision to market while avoiding the traditional funding routes such debt or venture capital.
Of all the estimated 500 or so crowdfunding platforms today, the biggest is Kickstarter. Kickstarter is a rewards based platform, unlike equity crowdfunding sites in Europe (or those expecting to launch in the US once the SEC figures out the rules for equity crowdsourcing). And while I expect equity crowdfunding to be a potentially big market in the future, today’s crowdfunding market, at least in the US, is dominated by rewards-based crowdfunding platforms like Kickstarter, Indiegogo, Rockethub and others.
Today I’ll be looking at Kickstarter’s data, in part because the company made its data public midway through last year, but also because the platform is the big Kahuna in today’s crowdfunding market and, in my opinion, the company’s data is a legitimate barometer for the overall crowdfunding market.
I’ve been collecting the data since June of last year and, like most things data, it’s the movement over time that is most interesting.
So what does that movement tell us?
Trending Over Time
Let’s look at total launched projects over time. Below is a chart showing total projects at month’s end from June to February.
Overall, a nice increase over the eight month span, as total projects went from just under 62 thousand launched projects to just a hair over 88 thousand, an increase of 43%.
Total Kickstarter Projects Launched, Month End, June ‘12 to Feb ‘13
Kickstarter launched as a company in April 2009, nearly four years ago, and in just the last 8 months saw their total projects increase by 43%.
Not bad, right? Well, let’s look at month over month increases to see.
Total Kickstarter Projects, Monthly Increases, July ‘12 to Feb ‘13
The above chart shows the month over month increases in Kickstarter project launches. The monthly totals were calculated by taking the total Kickstarter projects launched on the last day of each month and calculating the delta from the previous month.
So what does the chart tell us? At first glance, it looks like new project launches are actually slowing. In fact, of the eight months shown above, July, the first month included, was the highest. All the subsequent months had lower total new projects launched.
Further, the overall trend for the rest of 2012 is on a slight downward trajectory, with December coming in at a pretty abysmal 2,366 new projects, compared with 3,267 the previous month.
But then 2013 arrived, and it appears that December’s low totals were possibly attributable to holiday cyclicality since the first two months of 2013 appear to be showing a nice a rebound.
But by how much?
Percentage Increase Month to Month in Projects Launched, July to February
While the second chart showed month to month project launches in 2013 getting closer to mid 2012 levels in absolute terms, from a percentage increase standpoint new projects are still significantly lower than that of July and August 2012.
What Does It All Mean?
So what does this mean? It may be too soon to tell. After all, I believe that interest in Kickstarter and crowdfunding has never been higher, and just looking at all the excitement at SXSW this week and at CES in January, one sees many entrepreneurs still embracing Kickstarter and crowdfunding over more traditional financing routes.
However, I would suggest that because Kickstarter and crowdfunding experienced a huge rush of new projects in 2012, there may have been a slight dissipation in the total number of new potential new projects as 2012 wore on.
Some entrepreneurs and creatives may also have felt that the early arriver advantage in crowdfunding has started to ebb, which may be keeping some on the sidelines. As with any new market, those who first embrace the change are most likely to see early success, but as the market matures the likelihood for success may go down.
Some entrepreneurs, like Chris Taylor of Gas Powered Games, have recently suggested as much, indicating that crowdfunding is getting harder to do as the newness wears off and the market gets more crowded.
I think he’s right, in large part because the data validates his point. In my next post, I’ll look at some differences in success rates over time for Kickstarter overall, and for specific verticals.