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Kickstarter UK – First half of 2013
by Thomas Bidaux on 09/03/13 07:11:00 am   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

It has been some time since I last checked on the progress of Kickstarter in the UK for the blog. With Kickstarter launching in Canada next week, it seems like an excellent time to look at the performance of the GBP projects again. I have pulled some data (from early July) and tried to get a feel for the current trend. 

I like to look at things and keep them at a comparable level – all the numbers you will see here are only for the first half of 2013. As I explained in the very first blog post on this topic, the early months were not very representative of the success of the platform in the UK, so being able to look at the 2013 data should be much more telling.

The fact we now have much more complete data, I can also look at things such as success ratio and other categories of projects. It also means it is a bit of a bigger picture. To make the whole thing easier to read, I have put the larger part of the findings in a Slideshare presentation. I recommend viewing it full screen:

 

Kickstarter – US vs UK (1st half of 2013) from ICO Partners

My concluding thoughts from looking at the current state of the two ecosystems:

- The two ecosystems are not on equal footing. The UK Kickstarter seems to suffer from being in a currency not as widely understood as USD (as this is the biggest difference from the US ecosystem) as well as from the difference of payment systems (Amazon payment in the US, Kickstarter’s own system in the UK).

- Kickstarter has grown from adding the UK ecosystem. It is quite clear as most of the successful UK projects are rather small (compared to their US counterpart), they would not have been able to go through the US ecosystem in the first place (it requires too much energy/investment for a small company), and they add up to the growth of Kickstarter overall. That growth is just significantly smaller than the one observed in the US, but it is commendable.

- It also seems that the US creators are better at understanding their capacity to raise money from the crowd and at managing their campaigns. The quite low success ratio of GBP projects compared to USD projects cannot be solely blamed on the difference between the two ecosystems. I think that, in general, GBP are overshooting for their goal – it could be that they are more honest about the amount that they need to build their project, the cost of development is more important in the UK, the Brits are not as good at getting attention to their projects, or a combination of these. I have seen many UK projects that had a fairly high goal and very few channels where to recruit backers. Now, me being based in the UK, I tend to talk to more UK creators and this could be anecdotal.

- The UK ecosystem won’t grow significantly until the option to show the pledge rewards in another currency is added or a few large projects make the leap of faith (and there is proof that both ecosystems can efficiently support large projects). Anyone looking a bit closer to the behavior of the ecosystems could conclude that any large project would be better off going on US Kickstarter. The difficulty to get into the ecosystem (set-up as US entity, set-up an Amazon account) can be overcome for the right project, with the right size, and it then become a self fulfilling prophecy: all the big projects are on the USD ecosystem, ergo, if you have a large project you should put it there. You have a few exceptions (successful Australian projects on the GBP ecosystem), but you would need more of those to counteract the current trend. Ideally, you want the project creators to go to the ecosystem that is the easiest for them and there is a noticeable gap at the moment between the two ecosystems.

The addition of Canadian projects will make the platform grow further, it will be interesting to see how projects perform there compared to the UK projects.

In the meantime, I will hopefully be able to dedicate more time to build more comprehensive graph representation of those trends.

Bonus – visualised data

Working on those stats, I also want to make another point: the scatter graph is INCREDIBLY informative and illustrates very well my main point when talking to future Kickstarter project creators, the initial goal. The graph uses a logarithmic scale, so pay close attention to the figures (open the image separately to properly read it).

scattergraph_UKnUS

 

The big headlines on very successful projects have created the impression that you can go for a large ask on Kickstarter. This is not true. First, a lot of projects fail. The concentration of dots below the success line (in grey) is very telling and visualizing it is important.

You can see the vast majority of the projects are concentrated between the $5,000 mark and the $100,000 mark (if you feel generous).

I think I will be using this graph more and more – it properly shows that, even if Kickstarter is growing and supporting more and more projects, it is really for projects in a certain range. You really need to evaluate properly the scope of your projects, and if it is too large you should either consider a different source of funding, or re-evaluate the project you want to make.

It had been a while since my last post on the topic – there is a lot more for me to share on crowd funding, I will try to post a bit more regularly on specific topics.


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Comments


Ian Fisch
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I skimmed the article and looked at the graph. I'm sorry, but I don't understand how I'm supposed to read it. You have dollar amounts on both the x and y axis.

Seriously, what is going on with that graph?

Merc Hoffner
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I believe it's amount asked on the x axis, vs amount pledged on the y axis. Therefore everything above the line met or exceeded their goal and "succeeded" (as in, recieved the pledges and got to go to work), while everything below the line failed to go ahead.

Interestingly both US and UK datasets are presented in dollars (of course they'd have to be converted on some basis to make any sort of comparison). My question is how are the exchange rates calculated? Adjusted continuously for the end of each project's pledge drive? How will the addition of extra currencies complicate this? Territories too? If the exchange rates fluctuate can a project be "artificially" driven back below their goal? Can a near failed project retroactively succeed? Can duplicitous operators use this as a new money laundering mechanism? Or currency exchange scheme?

Thomas Bidaux
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The exchange rate used is described in the Slideshare: fixed rate of £1 = $1.6.

That's for the purpose of the analysis. For Kickstarter, the end date of the project is when all payments are made and the date that should be used. Until I have a more sophisticated system in place, I will stick to a fix rate - I am looking into using rate of the date in the long term.

For Kickstarter, the currency rate fluctuation don't happen. Each project has pledges in its currency.

Thomas Bidaux
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Scatter graphs need their axis titles - my bad.

Vertical is money pledged for the project, Horizontal is the goal for the project.

Jakub Majewski
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Hey, that's a pretty neat graph. Amongst other things, it illustrates very well the "let's rally, we're so close" effect which results in projects close to meeting their target almost always somehow edging over the line. If you look at the graph, you will see there is an empty space under the success/fail line, with just a few projects existing in this space.

You can also see that once projects go past the $1,000,000 goal, their success rate increases strongly as well. Presumably, this is because such projects are inevitably much higher-profile, and employ a far stronger marketing effort.

Another interesting thing worth noting is that the fail rate for projects just under $1,000,000 seems extraordinarily high - there is a space there, I'm guessing around the $800-900,000 mark, where there are quite a few failed projects, and virtually no successful ones. I wonder what's going on there.

By the way, Thomas, maybe you could do a bit of data-crunching with the numbers you have collected, and present the average fail/success rate in broad financial categories? (e.g., under $10,000, $10,000-50,000, etc.) Or is that already available somewhere?

Thomas Bidaux
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Hi Jakub,

I did this kind of analysis in the past (check ICO Partners on Slideshare) - I will likely do this for the next blog post.
The good thing is the scatter graph helps a lot determine the range to that are relevant.

Nathan Middleton
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For me the biggest stumbling block for the UK kickstarter has been that it only accepts payment by directly adding your card details to the site (which I'm always wary of).
Its a big barrier to entry when compared to the 3 click(ish) process of using Amazon.
I've personally refrained from backing projects because of this, it hinders the impulse buy.

Leszek Szczepanski
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But you still have to add you credit card data to Amazon.
Is that so much different?

Curtiss Murphy
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People already trust Amazon. That matters.

Nathan Middleton
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The only difference is that I already have an Amazon account(as do a lot of people).
What i was getting at is that having to add those details is an inconvenience that hinders what would be a swift impulse buy in the US kickstarter (provided you already have an amazon account of course).

There is also the trust issue, but the inconvenience was more of an issue for me, especially the disconnect from how quick and easy it normally is with the US KS.

Nathan Middleton
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just a small addition:

I would happily add my card details for a project I was really interested in, same as I would likely pledge a larger amount of money; but for those quick £5-10 "why not's" its too much effort.

Thomas Bidaux
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It plays a role , certainly.

If the Canadian launch is a success, it will help the UK ecosystem on that side of things (Canada uses the same payment system and not Amazon).

James Yee
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Lots of good info in here, how much of an increase in Kickstarter market do you think the Canadian and Australian launches will add based on what the UK addition brought?

Thomas Bidaux
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First few days seem to show a similar number of projects coming from Canada when comparing to the UK launch. So seems it is expanding KS reach positively.


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