Crowdfunding 101

Kickstarter.com has been generating buzz as a non-traditional source of funding. So far, producers haven't jumped on-board en masse, but they might look at taking a page from the playbook of an upstart crop of kids content creators who are making the site work for them.
October 1, 2012

Tinkatolli is a virtual world combining online and offline play that Copenhagen-based web and game developer Kevin McLean knew would resonate with kids and their parents. Children create Tinka avatars—tiny, colorful creatures that make useful objects out of trash from the human world—and build their own virtual homes. To “level up,” players must actually leave their computers and perform a real-world activity like swimming or make something using household garbage like paper towel rolls. Uploading pictures of their accomplishments into their online scrapbook earns kids points they can use to acquire more assets on Tinkatolli.

In 2009, McLean and a small team of collaborators went to work designing and creating a prototype for the game, which included an online avatar generator promoted through Facebook. In less than two years, the site generated more than 23,000 kid-created Tinkas across 100 countries. McLean knew he was onto something, but needed capital to produce and launch the full site.

So he turned to Kickstarter, a three-year-old crowdfunding engine that was gaining notoriety as a place where people were supporting cool, creative projects. “We thought it would be a good fit in a community of like-minded people,” says McLean. Tinkatolli is just one in a growing number of independent kids content concepts that has skirted traditional means of financing via Kickstarter. Kidscreen caught up with McLean and a few other Kickstarters to get the lowdown on the ins and outs of navigating the crowd-funding universe.

Spelling it out for kids
Kickstarter works by allowing a project creator to post a campaign page that states a minimum monetary goal and a deadline. Creators upload a video and a written explanation to pitch their projects, and if the monetary goal isn’t met by the deadline, no funds are collected from donors. Kickstarter takes 5% of the money raised off the top. As of August 22, there were 68,224 projects on the site, with a success rate of about 44% that has raised US$275 million in total.

During its 30-day campaign from June to July 2011, Tinkatolli successfully raised slightly more than its US$30,000 goal from 308 backers. The process, however, proved to be a learning curve for McLean and his team—they pitched Tinkatolli directly to its fan base that consists primarily of children.

“The campaign was an area where we made some mistakes,” admits McLean. He explains his Kickstarter video was inspired by other successful campaign pitches. It did a good job of showcasing all that Tinkatolli had to offer, but it spoke primarily to people already familiar with how Kickstarter works. Kids wanted to play and help the Tinkatolli cause, but they just didn’t understand what it meant to pledge money to a startup. “These kids had communicated to their parents, asking if they could donate to Tinkatolli,’” says McLean. The problem was the request didn’t register with most parents because the adults simply weren’t interested in “donating” to a company. In hindsight, McLean says he would have first explained how Kickstarter works, giving kids the tools to communicate to their parents and direct them to the Tinkatolli page.

McLean also learned that to a kid, “US$30,000 might as well be US$30 million.” Children got anxious and stressed out during lulls in the campaign when pledges hit a plateau. “Our fans were saying [online] that Tinkatolli was not going to get the money and it would shut down and disappear,” says McLean. Such chatter put him in the impossible position of simultaneously assuring kids not to worry, but needing to continue asking for the money he desperately needed for Tinkatolli to survive.

Missteps aside, McLean also discovered that once someone becomes a supporter, they really want their project to succeed and tend to check in regularly on its progress and offer to help where they can. So nearing the end of the 30 days, McLean sent out a plea to his Kickstarter backers who were parents, asking them to reach out to their own networks and tell people about Tinkatolli to generate more pledges. The personal appeal worked. Within a week, BoingBoing, a US parenting blog with more than 140,000 Twitter followers, had picked up his story. “That’s when we broke beyond the smaller network that we were in and got big support,” says McLean.

Building a network
Getting a mention in Wired magazine’s parenting blog Geek Dad (which has a page on Kickstarter that recommends projects) was also key in getting the promotional heft children’s author Nick Dazé needed to reach his campaign target of US$30,000. His children’s book Roger Nix, President at Six is written as an entrée into the vocabulary of politics and elections, told through a story in which an ordinary kindergarten student runs for president against a villainous opponent who wants to shut down schools and make kids work.

Dazé explains the usual demo hanging out on Kickstarter is comprised, for the most part, of young, urban, tech-savvy professionals—the type that  helped raise more than US$10 million for this year’s mega-successful Pebble watch campaign. Smaller kids projects like Roger Nix aren’t likely to get featured on the site’s main page, so pitching his book to parent bloggers, who would in turn link back to the campaign page, was the crux of his strategy.

“People who think it’s a great story and really want it to succeed are willing to put in a small amount of money,” says Dazé. “I now have 400 to 500 people who are constantly emailing me, Tweeting me, liking things on Facebook, and are so supportive and enthusiastic about every single step in the process.”

Dazé says the funds raised will largely go to his professional illustrator and producing the initial print run (between 2,000 and 3,000 copies). Of that, he will ship about 700 first-edition copies to his 400-odd backers. Then he’ll start trying to sell it through online channels like Amazon and independent booksellers. Down the road, Dazé also aims to create a digital version for tablets.

Budgeting the campaign
Choosing the right amount of cash to chase in a Kickstarter campaign and planning pledge-driving giveaways was an important part of McLean’s successful strategy with Tinkatolli. He says his research advised him to pitch a modest amount that would allow him  to reach his target and even encourage people to pledge over and above. “If we could do it again, I think we’d pick a lower number because there was a lot of stress, and I think we would have reached $30,000 in the end anyway,” says Mclean. He adds that  he’s skeptical about whether a recently posted kid-targeted project asking for US$200,000 will hit its mark.

For Tinkatolli, a US$1 pledge gave a backer instant access to the private beta site, US$5 entitled a user to a one-month membership, and US$50 earned a year membership plus a postcard. McLean also built posters, t-shirts, virtual game assets and physical objects like dinosaurs and robots from bits of trash, sending  those to backers via snail mail. “We found that sending a poster to Denmark was a lot more expensive than we had anticipated,” admits McLean. He recommends that 10% of Kickstarter earnings should be factored into giveaways.

Social media matters
Ed Skudder and Zack Keller spent a good six weeks setting up a tiered goal system and producing a pitch video when building their Kickstarter campaign for funds to produce a movie based on their teen-targeted web series Dick Figures, produced at L.A. studio Six Point Harness. US$250,000 in pledges would produce a 30-minute film, US$500,000 would make an hour-long flick, and for US$700,000, the duo would commit to producing a full-length animated film.

The web series, consisting of approximately 40 three- to five-minute episodes, had garnered more than 125 million views since launching in 2010 on YouTube animation channel Mondo Media. It was popular, yes, but it was rendered in an irreverent animation style that Skudder and Keller admit would never get backed by a large production studio.

The pair had an edge, though—a huge following and awareness of the IP on Mondo Media. But they admit that they’d never been very involved in social media sites before, and campaigning for cash was more stressful than they had anticipated. “It was an exhausting 30 days,” says Skudder. “We had never really looked at our Facebook messages before and we had never spoken with our fans one-on-one.”

As part of their campaign, giveaways included a download of the movie, access to the making-of blog, storyboards, posters, t-shirts and an art book. Ultimately, the campaign succeeded. Skudder and Keller raised US$313,412 from 5,616 backers, making it the most successful animation project on Kickstarter to date. “Kickstarter hit a direct line to specific fans who want to put money into things they’re interested in,” says Skudder.

Pledges ranged from US$15 (from more than 2,000 people) to a couple of anonymous US$10,000 donations from  backers who Skudder and Keller say they are looking forward to meeting. The pair is currently planning a behind-the-scenes tour of its production facility, another top-end giveaway.

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