FARMcurious fermenting jars

If you haven’t conducted your own crowd funding campaign you’ve probably donated to a friend’s. Maybe your contribution helped support an artistic venture. Maybe you helped someone do the kind of social or environmental work that isn’t rewarded by the private market. If your money got you anything in return, most likely it felt like a thank you token for your good deed.

But a new wave of crowd funding campaigns make use of these platforms, not to crowd source donations but simply to sell their product to consumers. Services like Kickstarter and Idiegogo make launching a small business much easier by minimizing risk and acting as a marketing tool and web shop all in one.

Nicole Kramer of Oakland’s FARMcurious says she can sell as many of her fermentation kits in one Kickstarter campaign as it would take her to sell in four years or more from her brick and mortar shop. FARMcurious is a company designed to instruct and inspire urban dwellers into the art of urban homesteading. Classes have been the primary focus of Kramer’s company, but she also designs fermenting, pickling and cheesemaking kits that make the alchemy of edibles a bit less daunting. With the “run-away success” of her Kickstarter sales, the kits have taken a more central role.

“One of the handicaps of small or artisanal entrepreneurship,” says Kramer, “is that you don’t have that economy of scale.” By using Kickstarter to get pre-orders, Kramer is able to buy all of her elements at much more affordable bulk prices, and then distribute. Rather than purchasing bulk elements up front, paying for storage, and potentially over- or under-buying, Kickstarter enables her to stock up without all the guesswork.

Marcus Wang, a product designer in Oakland who recently launched a campaign to sell his cocktail making tool, ReJigger, suggested similar benefits. “I would have raised the capital from friends and family,” he said, describing not only the costs of manufacturing stock and building a webshop but also paying for a distributer and marketer. “Selling on Kickstarter let me test the waters and figure out my market before spending that money.”

Testing the waters is a big part of the benefit of crowdfunding campaigns. There is a trade-off dynamic in that crowdfunding campaigns are really helpful in the early stages of prototype development—more access to customers and their feedback, more startup capital to make improvements—but, on the other hand, campaigns with polished and fully-fledged products make a lot more money than those in the early stages of development.

Entrepreneurs with bigger budgets may use crowdfunding platforms merely to collect data on their market and customer experience before reiterating. This tool has led to a renaissance in tech hardware manufacturing, an industry historically encumbered by massive development costs.

OTTO, the hackable camera with all kinds of special secret functions, and AttoDuino, “like Arduino but on steroids,” (if you have to ask what Arduino is, this product is not for you) are two examples of tech products based in Oakland that were huge successes on Kickstarter.

Jonathan Driscoll and Aaron Hammack, developers of AttoDuino, say the trick is to set your campaign goal high enough to break even after taxes and service fees, but not much higher– remember if you don’t clear your Kickstarter goal you make nothing.

Consumer products lend themselves well to this use of crowdfunding because it purifies the relationship between the consumer the products that succeed.