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TJ*, a robotics kit funded through Kickstarter.

Co.Design

Kickstarter Rescues Startups That VCs Won't Touch, But Here's What's Missing

Kickstarter has uncovered many untapped consumer dreams. But the model needs improvement before it ushers in a hardware renaissance, argues Frog’s Robert Fabricant.

It may seem like we have entered a golden era of product design, in which the world’s most valuable company has built its entire business on a dozen consumer products while heightening our appreciation of the subtleties of industrial design immeasurably. So why do I get a pervasive feeling of doom and gloom when I hang out with my product design pals? Maybe its because all of the action has moved to software and apps. There is a real startup frenzy out there with designers playing a meaningful role this time around. Yet it is still damn hard to get a VC to go along with any startup involving hardware unless you have already locked in distribution with Best Buy or Walmart.

When will hardware hit the masses, with MakerBots and 3-D printers on our desktops? The answer is pretty unclear. But in the meantime, you’ve got to love Kickstarter for creating a marketplace (or at least the impression of one), where the hardware plays can rise to the top. So I wanted to build on the comments I made in a recent New York Times article on the topic. I am thrilled to see a nascent hardware startup economy emerge around Kickstarter and not surprised that it is stealing headlines. So here is a broader take on the phenomenon from the point of view of someone who is immersed in the world of product design.

The Pebble, which has raised nearly $9 million.

The Good

1. Kickstarter Has Rescued Musty Categories

Product design is governed by the laws of supply and demand. There is a tremendous supply of talent, yet very few products actually make it to market. So most designers have a huge stockpile of high-fidelity concepts and beautiful renderings gathering dust. While a number of these concepts turn up on Core77 and Co.Design, they have zero paths to market. Now you can argue that we don’t need another slab phone/pad with a slightly different chamfer or bezel. But there are a whole host of neglected device categories desperate for attention, like watches, bathroom scales, and thermostats. These devices feel woefully out of sync in an iProduct world. Perhaps the biggest service that Kickstarter has done is to reinvigorate these categories to the point where bigger players might see their potential and escape from "Slab Land."

2. People Now Believe, Gee Whiz, Tech Can Be Real

Ubiquitous Apple advertising has trained consumers to believe the magic and fill in the gaps when presented with a single image of a finger touching a beautiful screen or of a person sitting lazily on a couch. Renderings that would have seemed like science fiction 10 years ago are now taken at face value, imbued with a high degree of credibility. Part of that is due to amazing strides in technology. And part of it is due to the discipline in Cupertino. Apple has never shown us concepts; only real products.

Now, consumers can look at one image of the Nest thermometer or the Fitbit and fill in all the blanks (while rushing to pre-order). Eric Migicovsky, the inventor of the Pebble Watch--the biggest sensation on Kickstarter to date--conveys this perfectly in an insightful Co.Design post: "We really wanted to emphasize the use cases," he says. "We wanted to say, 'Here’s an example of how you’re going to use this in your everyday life.'"

Kickstarter’s first runaway hit: The Tik Tok watchband for the iPod Nano.

3. Imbuing Customer Relationships With a Sense of Ownership

Consumers don’t just want to understand the story. Increasingly, they want to be part of it, which is something even Apple won’t let them do. Let’s face it: There is nothing original about your iPhone other than your lock image. Even the funky case you bought is being sported by thousands of other people. There is actually something sort of horrifying when someone plops their iPhone on the counter, and it has the same case as your own. It strips away that "think different" mantra pretty fast. While people love their Apple products, they are looking for a stronger link to the products they use. They want to get closer to the source. Kickstarter offers anyone the opportunity to be the first to discover, invest, and share a new product concept within a circle of friends, which alone is worth some money down even if the product never actually makes it to you doorstep as promised.

A Windowfarm kit funded on kickstarter.

The Bad

4. Delivering On Hollow Promises

But there are a few areas in which Kickstarter truly suffers. The path to market is very different for a book, restaurant, or gadget. It comes down to more than just the amount of money raised, as I noted in The New York Times piece. If you invest in a book, it is pretty reasonable to expect you might get a copy. But what about a smart-watch gizmo? It is much more of a gamble. With the increased complexity of software and services, the $7+ million that the Pebble Watch has raised will go very fast.

The downside of Apple-style marketing is that we have very high expectations for the seamless integration of software, services, and support in the finished product. Even Jawbone, which has raised more than $260 million in investment, had to do a complete recall of the Up health care monitor wristband due to the complexities of launching this kind of product. Plus, consumers as investors might reasonably expect the folks at Pebble Technology to provide a projection of how the millions they have raised might actually be spent. The percent amounts going toward offshore manufacturing, low-wage factory workers, and fuel costs for transport would make for a very different story on Kickstarter.

5. A Sacrifice of Craft

Last year, I visited Shanghai with Max Burton, one of Frog’s pre-eminent product design gurus who led the Nike watch team for many years pioneering some of the same unibody production techniques later adopted by Apple. Max and I are both watch geeks. He was planning to take some personal time to visit one of the factories he used to work with to look at the small-scale production of one of his own designs. This is about as close to the story as it gets, so I was happy to commit $500 to be one of the first in line for Max’s creation. Unfortunately, he came back empty-handed. Not only were the tooling costs out of reach. But it would have been impossible to reproduce the level of engagement that he was accustomed to from his Nike days. A significant part of the craft is in the manufacturing process, working back and forth, through numerous prototypes, to get to a satisfying design. That process is largely out of reach for a hardware startup.

The 999 bottle visualizes your eco-impact.

How Kickstarter Should Evolve

So how do we build on the enthusiasm within the product design world and create a more sustainable market for hardware startups? Here are a couple of closing thoughts:

1. Kickstarter should not be a shopping site

Product designers are blurring the line between investing and pre-ordering at their own risk. The biggest return on an investment in the Pebble Watch may not be getting the watch in the mail. It is in generating interest among bigger electronics companies to reconsider categories that they previously dismissed (like watches). You are voting with your dollars for the products you want to see in the world, regardless of whether they end up being made by startups or the big guys. It would be great if Kickstarter could create competitions around some of the more mundane gadgets in our lives--like thermostats or hotplates--to see what the design community can come up with.

2. Different Forms of Sponsorship

For that reason, it would be interesting if product designers could figure out a different way to personalize the investment, short of promising a product in the mail at some point. My guess is that a lot folks would be very happy with a signed form model from a standard 3-D printer. In fact, this might end up being more valuable and memorable than a watch gizmo that you will wear for a couple of years and then dump in a drawer. In recent years early Apple models and signed memorabilia have received high prices at auction. Designers could send out models in a variety of different form factors to gather feedback and support their user research. What about a limited edition of signed sketches? It is easy to see how you could offer different artifacts at different investment levels, all of which would help educate the public about the craft of creating a great product. I would love to see more creativity in this area.

3. Teaming With Industry, to Revive Unused Tech

At Frog, we work with so many clients that have valuable technologies sitting on the shelf. They don’t have the endless time, or creative resources to envision how these inventions could fit into people’s lives as meaningful products. And they have no cost-effective way to gauge consumer demand or interest for new product categories. I would love to see a few organizations, whether corporations or universities, open their kimonos and release some unused technical capabilities to this community, providing a marketplace for designers to explore applications in health, energy, or other markets--particularly ones with the potential for major social impact. They could work with Kickstarter to create sponsored competitions in which the designer and the technology organization share the IP that is created around the design, with the public voting along the way for their favorites. This could be a great way for companies to build a meaningful design community just like the developer communities they are constantly courting. The IP issues would be challenging to navigate, but Kickstarter could have the platform--and financial platform--to make this happen.

The Biggest Lesson From Kickstarter

At the end of the day, we all want a more meaningful connection and a more substantive say in the physical products we interact with. This is particularly true of the connected gadgets that are leaching into every facet of our daily experience. As Frog’s executive creative director of global insights, Jan Chipchase, is fond of saying: Opting out of these technologies is no longer an option in many societies. As we adapt more and more to the capabilities of so-called smart devices, we are looking for more meaningful ways to make them adapt to us as well. If we can’t do that with our smartphones, thanks to Apple’s closed ecosystem, at least we have a shot with smaller categories like watches that are equally personal. That is the true lesson of Kickstarter and the emerging hardware startup economy.

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15 Comments

  • storehelp

    I think we have become so enamored by high tech that we seem to think it is the only thing worth developing.  In reality Kickstarter created a fantastic opportunity to develop, test and fund physical goods, whether they be high tech or not.  While Kickstarter is no where near perfect and will need to evolve, the fact that it allows aspiring entrepreneurs to develop, test and fund a product can mean many new small businesses.  For every programmer or engineer there are 20 non tech people with dreams of creating something and this gives them a venue to do it.

  • Casandrita

    I agree whole-heartedly on all points raised by Robert. 

    I am aware of so many older-generation 'rocket scientests' so concerned about IP that they are willing, while not realising the implications there of, to literally take their ideas to the grave. 

    Personally, as a bit of a penniless philanthropist, I am more concerned about getting my ideas out there - seeing them come to life -  than I am about IP and $'s.

    I would also like to see the Kickstarter community evolve to tackling real projects of greater significance than watches and other gadgets.  Nothing wrong with gadgets, but there are greater things that this community could assist in bringing to life :)

    There is a huge funding gap when it comes to post-concept ideas lacking developed prototypes.  It is in this area that funding is really needed.  While SDTC claims to be addressing the funding gap, they are really more interested in funding a proven concept through to commercialisation ... as is every other funding mechanism.  As an innovative society, we really need funding to support cool concepts including prototype demonstration through to commercialisation.

  • Mark Nowotarski

    These are excellent points.  What we need is some sort of online community of Kickstarter project alumni to share the trials and tribulations of actually delivering the product after the fund raise.   I've backed a number of projects and several of my patent clients have run successful campaigns.  Working with your backers after the campaign to get feedback and support may be the most critical aspect of ultimate success.

  • matthewfabb

    "
    My guess is that a lot folks would be very happy with a signed form model from a standard 3-D printer. In fact, this might end up being more valuable and memorable than a watch gizmo that you will wear for a couple of years and then dump in a drawer. "

    You should poke around Kickstarter some more and see that one of the top funded projects in the Art category is exactly this. The project is "Crania Anatomica Filigre" and provided people with these strange but cool looking 3D skulls.

    Kickstarter is a lot more than gadgets, books and restaurants.

  • NigelNewton

    Hi Robert - What did Kickstarter say when you asked them to respond to your suggestions on how they might improve in the future?

  • Srinagesh Eranki

    As identified, the magic of Kickstarter is 

    1) The material benefit (e.g. receiving the watch). 

    2) Being part of a new movement/trend. 

    We don't want another of those ideas voting sites.

    Could people contribute more that money (e.g. sweat equity)? Say, someone bids for the right to manufacture a pilot batch. That, together with staggering (i.e. in phases) contributions would de-risk the ability/inclination of the idea-contributor to come good on their promise.

  • Snark

    All of the given advice is based on abstract, unproven ideas. When people like this give you advice, do not listen to them.

  • Justin de Freitas

    "The downside of Apple-style marketing is that we have very high expectations for the seamless integration of software, services, and support in the finished product." 
    I disagree this is a downside. Consumers are finally holding designers accountable for the entire experience of using products. Higher expectations around the entire lifecycle of a product, and the joy of its use hopefully means that we'll see more thoughtful, well designed products. Thanks! This was a very interesting read!  

  • Pam

    So funny... Kickstarter is a huge success and here comes along some clown on how they should fix it? Yeah dude, you've really got things figured out, go away now. 

  • Justin

    I feel your enthusiasm towards Kickstarter and I too have the addiction.  I think that as it grows and gains more attention that we will start to see more and more scams taking advantage of this optimism people have.  It is just natural that as Kickstarter grows it to will have to adapt.  Once a person gets burned which will begin to happen, he is going to be very reluctant to put faith in another project.

  • David Galindo

    Pam, I tend to agree with Ayn and Ian. This article in no way appears to be positioning the opinion that Kickstarter is broken and needs to be fixed. It is balanced with both praise as well as how Kickstarter can improve it's model. I would be interested on why you hold the perspective you appear to have in your comment and why you chose to resort to name calling (i.e. clown) instead of providing countering arguments that actually have substance. If you did that, then we might actually be able to have a good discussion here.

  • Ayn Roberts

     Did you even read the article, in particular the first half where he praises Kickstarter for its ability to revive many small product design markets? I think the concept of "critical analysis" has been lost on you.

  • Ian Main

    Obviously Kickstarter and its participants successfully fund projects all the time, but that's not the point of the article. He does acknowledge the pros and cons, he doesn't simply criticize. His points are valid - more and more designers are turning to Kickstarter for crowdsourced funding and they need to remember that raising money and promising the finished product in return shouldn't be their only goal. He advocates for Kickstarter to become a better marketplace because it's nowhere near perfect. 

  • Ian

    I think if you actually read the article, you'll find he isn't talking about how to "fix" Kickstarter, but rather how to improve it.