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Rejected By VCs, Pebble Watch Raises $3.8M on Kickstarter (bloomberg.com)
216 points by dwynings on Apr 18, 2012 | hide | past | web | favorite | 82 comments

Good, I'm glad they were rejected - If they weren't, I wouldn't have known about them, nor would I have purchased one.

This way they get their money in the form of guaranteed, up-front orders, and I get a cool new product "before" anyone else. I feel exclusive and I'll have the hot new gadget to show off.

It's a win-win, and I hope more companies opt for this route - it is true market validation.

(On a related topic, September can't come soon enough. I want mine now)

The problem wih upfront selling is the risk to not be delivered. Some buyers are not really aware of the risk. The amount of money in play is quite low but the disapointment will be as big as the initial expectation.

If everything goes well then it's a win win, but amounts in play will start to attract crooks. It looks like too easy money. As long as kickstarter was under the radar, only well intended people where using it.

When the offered rewards are goods or services, then kickstarter is an upfront selling shop and these are high risk deals. The risk could be evaluted, but buyers have only videos and some text to evaluate it by themselves for now.

That's a good point. From my experience in dealing with marketplaces where scammers can earn 10k/scam, they're quite hard to effectively suss out beforehand and block, and they adapt. I can only imagine what the lure of a 100k or or more will draw in terms of creativity. I really hope there's some effective structural or procedural safeguards that we're not aware of, because the obscurity is gone. If they can get past that, I think Kickstarter has a very bright future.

There are a lot of Kickstarter clones (or re-spins) starting up, as it is often said, imitation is the sincerest form of flattery :)

I've come to learn that people will copy everything. I once built an iPhone app that seems to have topped out at around $500/year in income; barely enough to secure a developer for a day. Yet, I found two apps that I would consider clones of mine with many similar characteristics, not just someone trying to enter the same market.

I was quite flattered to see them, but I remain curious why they'd go after such small potatoes? It seems like copying something that has a sustainable business model would be the better choice.

If those two clones didn't exist, do you think your app would be collecting "their" revenue (i.e. $500/year * 2)? Maybe you three are splitting a small pie into smaller slices.

Probably not in any meaningful way. The clones never seemed to grab much traction in the rankings, where my app did. Though I guess I'll never know for sure. If anything, I'm losing out to the real competition that took their own approaches to solving the problem and didn't just clone what I did.

Out of curiosity, I just had a look at the ones I do consider clones, and the one that took my name and added "Pro" to the end doesn't even appear to be on sale anymore though their website is still active. I can't find the other, so it may not be either.

Could they know your income level? Also, U$ 500 buys a lot more in some other places (it's a week's salary for me for instance)

You can make some estimations by rankings, but I guess that's a fair question. Also, I spent several months on the project, so even a week of work per year isn't going to get you far.

It was a fun project, but a failed business.

> I really hope there's some effective structural or procedural safeguards that we're not aware of, because the obscurity is gone.

Not yet, their terms of service have a clause that (paraphrased) says "if you don't follow through we might pursue legal action" but nothing concrete.

They really need contractual obligations to complete the project if you get funded, otherwise where's the accountability? The ability to threaten someone with breach of contract is at least some bargaining power.

All of these multimillion dollar deals were raised by people or companies with proven track records. But with so much money in play, Kickstarter has little incentive to restrict funding limits. If Kickstarter only got paid after the funded project delivers, then Kickstarter and funders would have the same interests.

I humbly offer a contrary view.

It's the fashionable thing to joke about VC's making wrong investments, investments at bubble prices, not knowing what they are doing, etc. But let's face it, it's their job to make sound investments. Sure, they may not get it 100% right, or even 50% but their job is to continually improve this success metric.

It's great that companies like Kickstarter are giving average consumers the capability to fund these sorts of companies but let's not equate the consumers' endorsement of the startup as the potential for value or ability to succeed. VC's do their due diligence for a reason, they want to back successful companies. Average consumers funding on Kickstarter are not doing their due diligence, they're looking at the marketing pitch and handing over their hard earned dollars. I fear this is bad for both the startup ecosystem as well as for consumers.

There will be companies on Kickstarter that take money and fail. My prediction is that it will be higher than the startup space. So before we get caught up on buying exclusivity with this fundraising, let's do our due diligence.

It's not just "make sound investments," VC's need to make investments that will pay off big enough to meet their promised rate of return over the promised time horizon. (They are investing other people's money.) It's certainly possible for VC's to think that an idea has merit, but is not right for VC-type investment.

Kickstarter allows time horizons and rates of return of arbitrary size. These guys now already have everything a business needs: capital and customers. Unless they commit outright theft there is no reason they can't succeed with this project. But there is also no requirement that they keep it going after their last investor gets his or her watch. They can just do it to the size needed to hit the natural demand, and then call it quits. You can't do that with VC money.

VC's are working for their investors, and this startup is probably more apt for Kickstarter funding.

But my salient point is that average consumers cannot and usually will not do their due diligence on whether the people who are raising the money have a good chance of succeess.

I hope you're not suggesting all a business needs to be successful is capital and customers. Because that's just plain dangerous.

I disagree.

An important part of investor due diligence is to try to figure out if there's a market for a product. A sizable Kickstarter campaign proves that in a way no due diligence ever could. Kickstarter campaigns also have an "with enough eyeballs all bugs are shallow" property. So failure rates could be lower.

Even if Kickstarter failure rates are higher than VC failure rates, Kickstarter still may be a good thing. First, Kickstarter can fund projects that are too small for VCs to bother with; there's a lot of value in the long tail. Second, they can fund projects that will be "merely" a 2-3x return. Third, this is making more capital available; if Kickstarter didn't exist it's not like the money would end up at Sequoia. Fourth and most important, Kickstarter campaigns will put less capital at risk. Most VCs can't afford to invest in less than $1m lumps, but Kickstarter campaigns can be 100x smaller.

Never argued that Kickstarter is a bad thing. Like I said originally, it is a very good thing and as you stated, it is great for certain types of projects (too small for VC's, not large enough return, etc.)

VC's have to judge if there's a market and Kickstarter helps with that. But VC's also try to judge whether the founders have the ability to succeed, whether their business plan (costs vs. revenues) are sensible, etc. How does one do that through Kickstarter? I'm sure you'll agree more than 50% of the people who've funded the project on Kickstarter didn't even bother to figure out whether the startup is set up to succeed. (For additional evidence, see "Diaspora")

Btw, when you say Kickstarter campaigns can be 100x smaller, I'm assuming you meant to exclude ones raising upwards of $3.8 million right?

When I say campaigns can be smaller, I mean that most VCs can't afford to do small deals. Their partners are too expensive. 10k projects are common on Kickstarter, though.

Your 50% number seems meaningless to me. Not everybody has to do the full research. Even with VC investments not everybody does full due diligence; as long as there's a lead investor willing to do the work many are much more casual. The larger a Kickstarter grows, the more likely it is to be scrutinized, both by funders and by outside participants. In this case, there was plenty of info available to evaluate the team.

Also, pointing out one failure like Diaspora is worse than meaningless. For every Kickstarter failure you find, I'm sure we can come up with 20 VC ones. Failure isn't the problem; failure is the point. Reward requires risk. Risk means some failures. As long as they continue to be, like Diaspora, interesting failures, then we're doing fine.

Is Kickstarter a platform for funding cool projects or a store?

It should develop the "store" part. It's very frustrating to stumble upon a project that's already funded and for which you don't know where to get the product anymore. It would be a natural extension to let late comers buy products after they were launched.

Almost all the funded hardware projects end up on Shopify afterwards. Including pebble.

The "store" part is actually a tremendously complex software to do well, hardly a feature you add to an existing system.

I'm curious. Is this due to Shopify's reputation, or do you specifically seek out successful Kickstarter campaigns as potential customers?

It just happened. We started contacting them now but it was all word of mouth.

Why can't it be both? It acts a bridge between an unmet demand and an unmet supply: there are consumers thinking, "I wonder if X has been invented? I would pay money for that." And there are designers thinking, "I wonder if anyone would buy X if I made it?"

It's conceptually a great match. The hard part was making it credible enough to gain trust. That's Kickstarter's biggest strength.

I think it can be and sort of is both right now, yeah. And I'm loving it, but it also makes sense for people to have different expectations from a store than from a project they are backing.

When I give a store money, they owe me a product. When I back a project, they owe me their effort.

So it's a bit weird to me when the language being used is mostly store language rather than funding language. I don't think anybody has purchased a Pebble yet.

I love that their brand's credibility enables projects to launch that wouldn't have been able to otherwise. But, once a project far exceeds its launch goal Kickstarter becomes a store that charges 5%.

Is there a difference in this case? I doubt they could have afforded to produce 4 million dollars worth of the watches without a good, semi-guaranteed estimation of consumer interest.

You know when you see something, and everyone who touches it makes a mountain of money, and everytime it happens, the $ values just go upwards, and it seems too good to be true?

It is.

That's called a bubble.

...and it'll burst as soon as there's a high profile kick starter ($million+) that fails and delivers nothing to the people who think they've pre-ordered something.

I like kick starter, and I appreciate what they're doing, but this isn't going to end well.

It's all very well to let people to setup their funding projects go, yeah, I can ship as many t-shirts as people signup for $20! Easy! ...but the reality is, shipping 50k t-shirts for $20 each isn't as easy as people expect.

This is really the problem: People are notoriously bad at making estimates for cost, time, size of projects.

Good luck to Pebble I say, I hope this works out for them. I hope we see this stuff all settle down and turn into a new awesome funding model and not into scammer hell~

>This is really the problem: People are notoriously bad at making estimates for cost, time, size of projects.



(Also, I like your example of the 50K 20$ T-shirts. Demonstrates the problem perfectly if you just think about it for a second.)

4000 dollars in attorneys and CPAs? Ouch. The U.S. sure is expensive that way. It's nice of them to breakdown the costs.

The poster also looks really nice, but I didn't know such art would cost U$ 2.000 (I know some talented guys here in Uruguay that don't make as much in a month. They should try competing for those commisions).

PD: the game looks really awesome :) I didn't know about it, but now I'm looking forward to it.

PD2: That much money would hire me for a year, but I wouldn't be able to make Star Command on my own in a year obviously.

PD3: I'm looking forward to an X-Com remake someday...

I wouldn't call this a bubble. Rather, Kickstarter is exploiting the law of averages. Take a couple of passages from the story as evidence:

> Few investors were interested in betting on a hardware startup, or dealing with the headaches that often come with manufacturing goods.

Let's assume "investors" are people with some knowledge of funding hardware based products. This group of individuals is going to look at the product (the upsides) as well as the challenges (the risks). A project might have tremendous upside on the product side, but an experienced hardware investor is able to identify the risks. I'm not a hardware investor, but anything involving wireless (even Bluetooth) automatically sets off warning buzzers in my head. I'm sure hardware-oriented VCs looked at this product and saw their own set of "uh oh" problems, thus they decided not to fund it.

> Migicovsky said he’s more adept at pitching to consumers than to venture capitalists.

I'm not sure Migicovsky is entirely aware of what he's saying here. This could be restated as "I'm more adept at pitching to laymen than people who are familiar with the challenges." That's scary.

At first glance, this appears to support your hypothesis: that one day, this whole thing is going to come crashing down. However, I believe you underestimate the pool of fools ready to part with their money. I don't really mean that funders of this project are fools, just that by some people's perception, they're fools for taking the risk.

Stated more succinctly, I believe that on the broad scale, there are a sufficient number of non-risk-averse individuals to sustain Kickstarter for quite some time. I believe this will remain true, even after some catastrophic funding failure.

I agree with all of this, but also want to note that as a backer, your risk is significantly smaller than that of a VC.

Great point. In addition to exploiting the law of averages, Kickstarter diffuses risk. It's easy to see that 100,000 people risking $20 (a $2M round!) is a lot easier pill to swallow, and thus easier to forget, on an individual basis. Contrast this with a small group of VCs risking $250k - $500k each.

It may have an interesting side-effect though. The salient hypothesis would be that the level of scrutiny applied to a $20-$30 risk is far lower than what would be applied when investing hundreds of thousands of dollars. By consequence, I would expect that Kickstarter would naturally fund more flops than a traditional VC model.

But each person loses maybe $20 (a few other donate more, but the average I see on Kickstarter is $25). If a scammer takes off with your $25, you are sad but not burned badly.

You probably will review the next 'investment' better, make sure they have a track record. The result is, only folks with some kind of reputation will find support at Kickstarter.

That's not exactly a bubble bursting. More like a market narrowing?

The last line in that article is a killer

In his pitch to potential new hires, he tells them to check Pebble’s Kickstarter page at the beginning of the phone interview to see a live tally of investments.

“After we stopped talking,” he said, “I told them to refresh.”

When I viewed kickstarter page it went from 28,369 to 28,493 backers in less than 30 minutes with atleast $20K added in those 30 minutes. This is incredible.

edit: I think it was probably more money - $50K in 30 min. Did not note the old $ number - just an estimate

Kickstarter strikes me as Etsy (for unbuilt products) crossed with all those "5K Run/Walk For XYZ" fundraising sites.

I'm skeptical it in a way that I can't put my finger on, still Kickstarter has a secret sauce that makes the people they need to host deals on it actually want to host deals on it (was eBay the same way, I can't remember). Did they ever think four years ago that they'd be running deals of this size?

edit: apparently amazon doesn't hold any of the cash, i stand corrected. and yes of course 100MM is not much compared to the probably 10B in cash equivalents AMZN has ..

People need to stop thinking that (m)any companies do anything for float reasons.

First, as the other replier states, in the Kickstarter case, Amazon is not holding the funds so there is no float.

But let's pretend they do charge your card. And let's further pretend that they hold your funds for 365 days (in actuality they hold it for a few weeks or months). And let's further pretend that they get 1% on that money (money market rates are closer to 0.5%). That would be a rounding error of $1 million.

Etsy specifically prohibits mass production. They make it next to impossible to ever make Kickstarter type money on their website. I suppose that it helps maintain a certain culture overall, but it really sours me on the site as a whole that it pushes away anyone who has any dream of finding real financial success in that world.

I don't think etsy is there for that, there are lots of people making random tatt by hand and trying to sell it, not because they can't mass manufacture, but because they like making stuff by hand. Is essentially 21st century folk art and craft, much of it is rubbish, but never mind, 90% of everything is rubbish ;)

> It's awful nice of Amazon Payments to hold onto all that cash as well...$100MM collected in 2011.

Not sure if this is what you're saying, but Az doesn't actually hold any money for Kickstarter-- they hold credit card pre-approvals, which probably costs them some nominal amount.

> Few investors were interested in betting on a hardware startup, or dealing with the headaches that often come with manufacturing goods.

The statement above doesn't capture how much of a (relatively) recent development it is that hardware is not considered worthy of funding.

For perspective: 12 years ago A rounds were running $15-20M for hardware startups. B's were $30-40M.

I don't really get Kickstarter. Backers essentially are paying the startup company for a product (or early prototype). Sure the company gets some money upfront, but they eventually have to deliver on the product? And what else does the backer get, apart from the product? Equity? No. How much money will Pebble be left with after this process?

What's not to get? There doesn't have to be anything more complex at play beyond a simple profit margin.

Backers trade money for something they want that they can't create themselves or get anywhere else, which means they are justified in paying a premium. Project owners get to realize their vision, bootstrap a production process, and potentially hold onto profit if they so desire.

There's a reason that this: http://26.media.tumblr.com/tumblr_m1wvyad1np1rrallbo2_500.jp... is a meme, and kickstarter is precisely the sort of platform designed to translate those "shut up and take my money" dollars into profit on the one hand and realized products on the other.

? The backers get the product or prototype. The company gets some money. KickStarter gets paid a commission.

So this its not an equity swap, it is a shop front. The benefit for startups is up front cash and a pool of early adopters?

What alternatives are available?

It's neither. Not every investment has to be in exchange for equity.

Here, check this out: http://www.kickstarter.com/projects/1804944614/the-sutro-mis...

Look at the number of backers at the $6 reward level, at that level all you get is a postcard, the equivalent of a pat on the back or a firm handshake. Yet 29 people pledged that amount or chose that reward level. Also, look at the total backers vs. the sum of all the backers at each reward level, you get a difference of 30 people (170 vs. 140). 30 people who either kicked in a mere dollar or two or who chose not to receive a reward. That's at least $200 in funding with almost no return to the backers, a full 2% of the overall funding goal. And the 2 higher levels of rewards are similar, a $20 poster, a $30 t-shirt. There's another thousand dollars, 10% of their goal level, just with that.


The answer is that economics turns out to be a lot more complex than we've been led to believe. The ideal of the efficient and ruthless economic model human being, Utilitus Maximus, is a myth. Economics meshes with culture and society and they play off of and interact with each other. Here we have about a hundred folks who are willing to collectively chip in $1200 for a project that they believe in. Is this charity? Not in any conventional sense, there are no sick or hungry children here, just bicycles. But people are willing to support projects which bring about slight changes to the world, even if it's just introducing a new product, which advance their ideals or enthusiasms. And that's a very substantial indirect benefit even if there is no direct benefit. Ultimately transforming the world around you into the world you want to live in can be the best and most effective use of your money.

More than anything I think that's the flame which fuels the growing popularity of kickstarter.

The benefit for project owners, who are not always startups, is validation of the marketability of their concept, a pool of early adopters, up front cash of course, but also a more intimate connection between makers and enthusiasts. A while ago the singer Jonathan Coulton did an experiment where he forced himself to come up with a new song every week, which he debuted on his blog. Afterward he collected the best songs together and released an album. Similarly, a few years ago Markus Persson, aka "Notch", created an early prototype of an innovative PC game and he decided to put it out there into the hands of folks all over the internet and charge a relatively small fee for preorders of the full game when it would become available. As he iteratively developed the game, Minecraft, in full public view eventually it hit a point of critical mass and gained a huge amount of interest, and with it a large volume of pre-orders. He made so much revenue via pre-orders that he was able to found a game studio, hire several other developers, and even begin development of other games, before Minecraft even officially launched. To me that sort of heavily customer focused bootstrapping process seems very much of a kind with kickstarter. It's very much an extension of the new modes of business that are possible today due to the internet, due to social media, due to the ease of doing business without any middlemen other than the bank and UPS.

Granted, even on a simplistic level kickstarter still makes economic sense (makers take a profit, backers receive products of significant utility), but the higher order effects are interesting too.

There are alternatives out there, most of them are fairly similar. Soon there will be alternatives that support equity based investments. To my mind the biggest alternative is just to do it yourself. For some projects it doesn't make sense, but for a lot of projects it can be easy to incrementally bootstrap your way up the revenue/product development chain.

I love this post of yours.

90% of the Kickstarter projects I back because I like increasing the amount of awesome in the universe (which also explains my involvement with the Awesome Foundation - awesomefoundation.org). Only 10% of them are because I want to "buy" the product. I generally expect that I'll actually get nothing when I contribute to a Kickstarter.

I simply want to reward others for having initiative, drive and interesting ideas and abilities.

>The ideal of the efficient and ruthless economic model human being, Utilitus Maximus

We all know what you mean, but the conventional phrase is "Homo economicus".

One thing with kickstart projects, and other social funding sources like it, is that sometimes people are essentially donating to something that they think should exist but that they personally don't need or want. They are just trying to help increase the overall "cool"ness of the world by helping a neat idea get off the drawing board.

There are many things I see, either real things that already exist or design ideas, and think "that's great" or "that really should exist" but which I myself might not need/want to own or use. Some of the funding going into kickstarter projects, especially at the higher funding levels, comes from that sort of thinking.

I think your answer is what crowdfunding is all about. Thank you.

I might print out your post and frame it. That's really well put.

It is important to remember that Kickstarter primarily for creative (read artistic) projects. Think of it as a modern and distributed system of art patronage (http://en.wikipedia.org/wiki/Patronage). In return for your patronage, the artists promise something (like a copy of the finished project). It is not unreasonable to liken it to a pre-order, but I would maintain that there is a subtle difference.

Edit: The point is that you are funding a project for its own sake, because you want to see it brought to fruition, not necessarily because you stand to gain anything by it.

That's what they want it to be.

The market seems to think otherwise :) and there's clearly a place for a market for up-front selling of (perceived) cool new products :) . I hope it's them.

I love the Kickstarter idea. It's the ultimate customer validation, too :) . I only hope they take extra care not to get burned by the inevitable first high-profile failure.

>And what else does the backer get, apart from the product?

The whole point is to see the product come to market. A good project is expected to try and sweeten the deal somehow for backers who pledge more money. (Signed pieces, interviews with founder, etc etc.)

You get the thing you want, which you wouldn't get otherwise. It's also a way for people to put their money where their mouths are: instead of bullshitting and saying, "Yeah, I'd love X, I'd pay for X" on some forum, if you want X and someone has it on kickstarter, you can prove that you want it.

Plus, sometimes Kickstarted projects end up in all kinds of places; for example, I got a CustomSLR strap: http://www.customslr.com , which is exactly as good as I'd hoped, and the product / company was originally funded through Kickstarter.

Cash-wise, they get the profit margin off each sale (of course we don't know what that number is, but on pure volume alone based on this launch, it might be fairly substantial). But they also gain reputation, brand recognition, and may attract other VCs now that they are famous, and they also have the upper hand because they have a better bargaining position.

For a hardware product like this, They also get a tested production system which has gone through all the initial snagging and is capable of churning out 100k products in x days, which is invaluable for a hardware startup and very hard to get in place without serious funding. Best of all, they didn't have to give away part of their company to do it by going straight to the customer.

It would be fascinating to see a breakdown from pebble afterwards though to see what they felt the advantages and disadvantages are, and what they would have done differently.

Typically more traditional, capital intensive companies use customer financing for a portion of their startup capital.

For instance, suppose I invent a new type of transformer with some benefit or the other. I approach the power companies with my prototype and explain that I need capital to produce it, so if they pre-order, I'll offer them discounts and other benefits.

This helps me approaching the banks and investors too, if I can get firm orders out of the power companies, because it demonstrates a market interest in my product.

What kickstarter has done is made it possible for this sort of arrangement to work with the public, pre-buying new consumer goods.

But to answer your question, what the customer gets is 1) a product that they want, which otherwise wouldn't be available, 2) in exchange for their risk that the product won't be delivered, they get various incentives, typically discounts.

You're really over-complicating and over-thinking this.

Somebody has a cool idea, others are interested, others pitch in to help get the product made.

And no, the backer doesn't necessarily get the product, that depends on the "backing level" rewards. Generally, yes the backer gets the product at a reduced price (compared to retail estimations) and a bit more chance that the product will actually see the light of day. For "non-physical" stuff (e.g. video games), there also tends to be swag or other artifacts at higher backing levels, for physicals there can be exclusive series or customizations.

> How much money will Pebble be left with after this process?

Who cares? They can be left with essentially 0, they'll have a product ready to sell and a fab chain, they can go to more traditional retail.

So, their pre-orders are the size of a modest A-round, and they have 30 days to go... impressive!

And they didn't give up any equity in the process. Oh, and they validated their idea and their product. With this they can now raise an A-round at a very healthy valuation, but, why would they?

Well, to be honest, they already had a product ready to send into production. This is probably why the product has been so successful.

This is where kickstarter is most useful in my opinion: where you have a production-ready product, and you're not sure whether you should start at your local machine shop, or get in touch with a factory in China to produce the product.

I'm aware of someone working on prototyping a somewhat niche piece of consumer electronics (a shot timer for competitive shooting). The products on the market now are expensive and kind of suck.

He seems to have the development chops to come up with something viable, and adding things like real data logging and bluetooth connectivity would actually make it better than anything on the market right now.

He's mentioned that he's doing it essentially as a hobbyist project, and that things like regulatory compliance testing and funding an initial production run would be something out of reach normally.

Kickstarter seems great for this kind of project. It lets you target an interested audience to get the initial capital funding to produce a product that you might not ever get off the ground beyond the personal prototype stage.

Down the road, I wonder what is the upper boundary of hardware complexity and scale that we'll see on Kickstarter. Exciting times ahead indeed.

I'm really interested in how they find the manufacturers to make such aesthetically pleasing products.

I've got a product I'd love to kickstart but finding companies capable is tough!

Maybe what this emerging ecosystem needs is a means by which design-prototype-manufacture-marketing teams can coalesce?

I've been dreaming about such a system for a few years now, perhaps the iron is finally reaching striking temperature...

Even just the first two combined would be amazing. I think what a lot of people are looking for is a start-up style company that offers a simple way of refining a design with industry experts and taking it to some kind of prototype stage within a reasonable cost.

Throwing in manufacturing and marketing expertise also would see an explosion of prospective products looking for a piece of the crowdfunding pie.

Potential strategy:

1. Acquire VC/other funds

2. Put product on kickstarter

3. Use initial funds to hype up and create explosive kickstarter trends

4. Let the hype do the rest.

It's like the Palin PAC strategy.

This wasn’t just a one-day, one-hit thing; we’ve been working on it for about four years now. Sam Altman, who is one of the partners at Y Combinator, has a great bit of advice: Don’t die; don’t let your company die. That’s the key. http://www.communitech.ca/vcs-took-a-pass-on-crowdfunded-peb...

Does software project got funded by Kickstarter? It seems most projects are hardware related (physical).

yes. I think the fastest to a million was this video game


Yes, eg. games. But Kickstarter isn't doing the funding, in case that wasn't clear.

Definitely. Rails.app (http://www.kickstarter.com/projects/1397300529/railsapp) was a hot topic here in the past weeks.

already outdated... they are already north of $4M. :-)

Question regarding Kickstarter: Can it really be used for commercial projects (or is Pebble not a commercial project?)? Because here http://www.kickstarter.com/help/guidelines it says it is only for "creative projects". I guess it is ok since the term "creative project" is not defined other than that page saying "like making an album, a book, or a work of art." Although later it says "Starting a business, for example, does not qualify as a project." Just trying to understand what can be used on the platform and what can't. Can anyone clarify?

AFAIK you can't sell stocks or shares. So you can't use Kickstarter to raise investment money (in the traditional sense)

Well, hardware is really headache for VCs, so Kickstarter now seems the best way to raise money AND promote your idea.

I really want to pre-order one. Reading the comments it seems like a gamble. It is possible, I really hope not, they won't end up making the watch. Any guesses how much it will cost 'retail'? In essence, I want the discount rate I'm getting for taking a gamble on them.

> Few investors were interested in betting on a hardware startup, or dealing with the headaches that often come with manufacturing goods.

I wonder how many potential smartphone/tablet companies are not being launched due to the timidity of the VC community.

I really really really hope this means they're are going to be hiring and need another RF/wireless comms guy that can do software on the side. I so want to build those!

Thanks for posting this. I wondered why a YC company would go the Kickstarter route instead of raising money. Now I know.

If VCs aren't worried, they aren't paying attention.

The more I think of pebble and all the interest, the more feel that one of the bigger companies making smartphones might acquire them :)

Does Kickstarter get a cut?

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