Kickstarter’s Trajectory Doesn’t Represent Crowdfunding As A Whole

This Week on KickstarterThis week Inc ran a story on Kickstarter’s slowing growth. In it Michael Wolf of NextMarket divulges some data from NextMarket’s recent analysis of Kickstarter campaigns and activity.

From the article…

“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,” Wolf wrote.

The success of Kickstarter makes its data a barometer of the crowdfunding industry, according to Wolf. Kickstarter has launched a total of 89,817 projects to date, and the total dollars pledged to successfully funded projects amount to $435 million.

I respectfully disagree. Here’s why.

Kickstarter is on a completely different trajectory than the rest of the industry.  To say Kickstarter is the largest crowdfunding site is somewhat of an understatement. To many casual crowdfunders, Kickstarter is still the only crowdfunding site that exists.

The type of growth that Kickstarter has seen is probably unsustainable. I say probably to hedge against the slight possibility that after $500 million plus in Kickstarter contributions there are still an untold number of artsy folks that need money and multitudes more willing to give it to them, so much so that the rate of growth can sustain.

Common sense suggests that eventually Kickstarter’s meteoric rise has to level out at some point, and in a world where PR strongly drives engagement can the Kickstarter buzz get any louder? Of course, Kickstarter could find plenty more success in untapped markets, but that is a topic for another post.

To take Kickstarter’s numbers and extrapolate them as an indicator for hundreds of other crowdfunding platforms seems counterintuitive. I could see an argument that Kickstarter acts as a barometer for rewards crowdfunding, but to apply it to donations or lending or equity? That is a reach. They’re four very different animals.

As the JOBS Act approaches, I think we’re on the verge of a tectonic shift in the definition of crowdfunding. Donation and rewards crowdfunding is a cool story and offers incredible tales of engagement and success, but investment crowdfunding can change how businesses are made. One of these things is not like the other.

If Kickstarter has begun to level out, does that mean that crowdfunding is following suit? Hardly. It’s only just begun.

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