I’ve been following the TikTok saga on Kickstarter, which finally came to a close today. They raised a crowdsourced total of $941,558 (their goal was a paltry $15,000), which is frankly astounding. It is pretty clear that for a certain kind of product, this model has the potential to completely upend how things get made. Or perhaps I should say, has just upended how things get made.
How to raise a million bucks in 2010:
I’ve made a few products over the years, and it used to be that building a product like this required several hundred thousand dollars of at-risk investment: machine tools, production run commitments, CAD software and big CAD hardware, costly prototypes, and on and on. Not a big deal for an established company in a known market, but for individual entrepreneurs that investment was really hard to find. Imagine trying to pitch TikTok to investors absent Kickstarter: “I want to make a watch for the nano, just like Steve Jobs suggested to *everyone*, and I have no distribution but trust me it’s going to be really awesome.”
Right.
Now, the total investment required is much less – on the order of tens of thousands as TikTok’s goal suggests – and you can take it right to the customer. Kind of sad to think of all the great ideas lost prior to this.
Notwithstanding the obvious concern that the SEC will have something to say about it eventually, you also have to wonder if the same model would be able to materially fund companies. Especially given that Diaspora was funded on Kickstarter, and held the fundraising record until TikTok came along.
A million bucks is a ton of money in lean startup land; at that price, you can build a lot more than a watch.
