Crowdfunding Tool: Kickstarter Calculator
When I have a great idea, I love to just dive right in and make it happen. None of these planning shenanigans. I’m a big fan of the try, observe, learn, rinse and repeat method.
I’ve also learned that when you have tools to make the trying easier, you should use them! Especially when those tools have been created and proven to work by other people that have already tried.
After funding dozens campaigns on multiple networks (mostly Kickstarter), as well as talking with successful and “not yet successful” campaign creators, people at Kickstarter, and soon to be successful campaign creators, I’ve built a simple calculator to help plan out the financial aspect of your campaign.
Crowdfunding campaigns are started for one reason: To make your idea happen!!!
For this to happen, you need these two things to work:
- Validation that your product is worth something and will make money with little to no risk.
- Share your amazing idea, project, or inspiration with a massive (and loving) community, aka “marketing.”
Successful campaigns often leave the creator with empty pockets, or even in debt. This comes from the passion of creating an awesome project – often with little experience in planning – mixed with problems estimating realistically and a dash of dreaming.
My calculator helps with all of this!
The Kickstarter Calculator helps you plan out the most important part of your campaign: Whether the amount of money you are asking for will truly make it possible for your project to happen and cover the costs of incentives or rewards. And secondly, it will help you understand the true number of backers you’ll need to make your project become a reality.
The number you want at the end of your calculations is the amount you should ask for (Total Raise Prediction). This “golden number” is almost always quite far off from the amount your project actually costs to make happen. This lets you truly understand your project and discover how to make your network and Kickstarter (or crowdfunding platform of choice) work for you!
Did you know 78% of successful Kickstarter projects raised less than $10,000? kck.st/NdtCRf
— Kickstarter (@kickstarter) January 22, 2013
For these small amounts raised, the other costs (incentives, shipping, etc) take a huge portion of the total amount raised. These sizes of projects are usually created by new creators, most of which fall into the non-business type. They just really want to see their project happen! This tool is perfect for all sizes of projects, and especially these smaller ones, where every dollar counts.
You can find the calculator here: http://reubenpressman.com/kickstarter
It updates live as you enter each number so you are always able to see how each change affects the entire campaign. This gives you the ability to play with numbers to predict things such as amount of backers needed for each incentive.
How it works
The most important number is your project cost. This is how much it takes to actually make your project happen. It’s the minimum you need with the minimum amount of backers to create the thing you want to create. This can be adjusted if you increase your estimate of backers, and I would suggest you do so.
The rest of the numbers in the top section are all calculated automatically, and are affected by your project cost mixed with the cost of incentives.
You can add as many of these as you would like, though I wouldn’t suggest having more than 7 or 8 different incentives. (This is more of a general crowdfunding guideline in my opinion, as you don’t want to overload potential funders with too many options or choices).
For each incentive, there are 3 parts: the cost of the incentive to you, the price you want to ask for the incentive, and the amount of people you predict will go for that incentive. These elements, mixed with your estimated project cost, will do all kinds of magical calculations to leave you with that golden “raise prediction.”
This is where the live update comes in handy. You can see how changing any one of these 3 elements affect your entire project outcome. You can test all kinds of possibilities of price points, new incentives, and amount of people you truly think you can or need to reach to see if your amazing ideas will work the way you hope.
My suggestion is to stay as realistic here as possible and use this as a goal-setting guideline to make sure your project will actually be successful.
The Golden Number
After you’ve got some incentives lined up, costs, and predicted your backer outcome, we can go back to the top section to see the other fields under the main project cost.
The first thing under the project cost is the total incentive cost, these together create the hard costs to not only make your project happen, but also make your campaign happen. We take the total of these and add the maximum (good for planning) that Kickstarter and Amazon take (up to 10%). This leaves you with the total amount you need to ask for (golden number), the amount of money, based on your predictions, that you are either under or over to make your project happen (the difference), and the total backers you currently predict to back each incentive level (backer prediction total).
If you’re difference is positive, you’re set and ready to move forward. If it’s negative, you might want to rethink a few things. A few suggestions of elements to think about below:
- Do your incentives cost you too much? Make sure the cost/benefit of each of your incentives is worth having as an incentive at all.
- Do you have enough backers? Try adding more backers to your incentives to see how many you really need to bring your project into the black. If it’s not too many, figure out how you could reach new markets, branch out of your current circle of friends and networks and find those extra backers.
- Do you really need that much money to make your project happen? Go back to your original project costs and figure out if you really need to raise the full amount, or if you could cut some costs out to bring your original ask down, and hope to add them back with stretch goals and an overly successful project. Maybe you can get some parts funded another way.
If you can get your project to have a positive difference, everything up and over zero is extra money that you can do any of these following things with:
- Lower the costs of your incentives for your backers. This will in turn make it an easier choice for your backers to back, and possibly bump up to the next incentive, giving you the potential for more money and more backers in the long run.
- Make your project better. Add to the sophistication and possibility of your project by throwing some extra money at the most important part of your campaign, the reason you’re doing it in the first place, the project!
- Keep the money! A lot of project creators underestimate the total costs of their project anyway. It’s always good to have a little extra laying around to cover anything that might go wrong during your project and could make you unexpectedly dip into your own pockets.
Once you’ve had fun playing around, have predicted all you can predict, have got yourself in a excellent position, and understand what needs to be executed, I’ve given you the option to print from the top right actions menu. You can save the PDF to your desktop or just print it on that old style paper stuff. I would suggest keeping that with you during your project to see how your campaign efforts are lining up against your goals.
You’ll notice in the actions menu, you can also download all the code in a neat little package to help make it better! I’ve got the open source license up there. This was a fun project I put together to not only help the crowdfunding community, but also to learn some new code, and play around with Twitter’s Bootstrap development framework. I’m a front end guy, so letting people save their progress for later, pulling from Kickstarter’s data on project averages, incentive costs, backer numbers, letting people see other’s calculations, and any other ideas you can make happen would be awesome! Hit me up if you’d like to help build those functions into the tool.
Just like you want others to share your project, it would be awesome if you could share this and let everyone know about this awesome ready-to-go tool for them to check in with before launching their Kickstarter or crowdfunding campaign of choice. It would be awesome for the entire community to have more successful projects with better planning. This tool can help make that happen!
When preparing a Kickstarter campaign, there are quite a few variables to account for. When doing the initial estimates we used an awesome Kickstarter calculator which made it really easy to see how different pricing schemes would effect the bottom line. If you are considering running a Kickstarter campaign you should definitely give it a go!
Jonathan Lansey, Loud Bycicle
Good luck with your project, and let us know what you think in the comments below.