There’s a plethora of watch brands launching every year on Kickstarter, all hoping to raise enough funding to not only get started but to grow as a brand.
Research out today from The Mercury Project explains how when it comes to the overall money raised on Kickstarter, 2020 now holds the record, with an amazing CHF 642 million raised.
This was an 18% increase vs. 2019.
Unfortunately, watch projects on the crowdfunding platform leader did not participate in this growth and continued to decline.
For the full year of 2020, their funding was down 31% vs. 2019, following -10% in 2019 and -41% in 2018.
This trend has continued into the first quarter of 2021 with funding also down 31% year-on-year.
Today, a watch project launched on Kickstarter generates on average CHF 52’000 for its creator, from which 10% fees need to be deducted, not to mention social media communication spending and other productions costs.
This leaves little for the creator, questioning the underlying profitability of the project. Kickstarter is now far from being the Eldorado it used to be for new watch projects.
In February 2021, the Code 41 NB24 project raised CHF 5.3 million through a well-managed in-house crowdfunding campaign, raising on its own half of all the money raised in 2020 by 178 watch projects on Kickstarter.
In contrast, Xeric, another veteran of the crowdfunding campaigns, specifically on Kickstarter with 13 projects, raised just CHF 174’000, 30 times less than the Code 41 project.
The Mercury Project went on to explain how succeeding on Kickstarter is increasingly costly, complex and challenging, often encompassing a combination of storytelling, product photography, video production, page design, pre-launch e-mail lead-generation, social-media community-building, social-media advertisements, cross-promotions, affiliate marketing, public relations, crowdfunding e-newsletters, social-media posts and so on.
Today’s biggest successes are highly supported by professional crowdfunding agencies.
Their fee structure (a minimum of 15% including flat fees), in addition to production costs and Kickstarter fees end up significantly reducing the success rate of smaller players.
During the first quarter of 2021, 71% of successful watch projects on Kickstarter raised no more than CHF 50’000, thus showing we are clearly very far from the level of enthusiasm and success we saw before 2018.
This article originally appeared on https://www.watchpro.com/is-kickstarter-the-way-to-go-for-fresh-watch-projects/