Startups

How a Kickstarter campaign showed a company it didn’t need Kickstarter

In ten days, after raising nearly a quarter of its $100,000 goal, Connectify shut the Kickstarter down. The decision wasn't driven by a lack of faith in the campaign, said CEO Alex Gizis. Connectify shut the campaign down because in those ten days, the Kickstarter acted as a low-cost way to test the market and made the company realize it didn't need to crowdfund Switchboard.

Connectify had successfully crowdfunded before. In one month, it raised more than double its goal of $50,000 for Dispatch, its software that lets you combine multiple internet connections for faster browsing.

So when it came to launching Switchboard, a similar product that speeds up video streams, uploads and downloads, the 12-person Center City company again turned to Kickstarter in order to build a community of passionate users for the software, said Connectify president Bhana Grover.

But in ten days, after raising nearly a quarter of its $100,000 goal, Connectify shut the Kickstarter down. The decision wasn’t driven by a lack of faith in the campaign, said CEO Alex Gizis. Connectify shut the campaign down because in those ten days, the Kickstarter acted as a low-cost way to test the market and made the company realize it didn’t need to crowdfund Switchboard.

Once Connectify started marketing the Kickstarter, it heard from many people and organizations that were interested but wanted their own Switchboard, rather than connecting to Switchboard in the cloud, which is what the company had originally planned. Connectify realized they could sell a beta version of Switchboard directly to consumers, with the added bonus of getting feedback from its early adopters.

Buy Switchboard for personal or enterprise use here (price range from $90 – $500).

The other reason that Connectify shut down its Kickstarter was that the crowdfunding site isn’t set up to work with businesses, Gizis said. Companies that contacted Connectify were interested in backing Switchboard but couldn’t contribute to the campaign for two reasons, he said:

  • Kickstarter doesn’t allow for volume orders. No backer can get multiple rewards for supporting a campaign, and rewards can only contain one to three items. So there’s no way to provide bulk orders of a product through Kickstarter.
  • Most companies don’t have a policy on expensing crowdfunding campaigns. “Buying something is one thing, but can they back a crowdfunding campaign?” Gizis wrote in an email. “Most probably work at companies without a policy on that.”

It’s an interesting use of a crowdfunding platform: test the market without actually taking in any funds. That’s a use that Kickstarter, which gets its revenue from a percentage of accrued transactions, might not encourage.

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Companies: Connectify
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