Venture Deli

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Accidental Innovations

Kickstarter is one of my favourite companies to watch for two reasons. First, the things people make are awesome (I’m still waiting on my Remees (http://www NULL.kickstarter NULL.com/projects/bitbangerlabs/remee-the-rem-enhancing-lucid-dreaming-mask)), and second, because I think they’re going to have a drastic impact on society – but not in their intended way.

Lesson #1: Process as technology

A year ago, we worked with a start-up company to help bring a much needed hygiene product to market. We learned that production is a painful process. First came a prototype, at around $8000. Then came a low-volume mould to mass produce up to what I roughly remember as 30,000 units or thereabout, for roughly the same number of dollars. That didn’t include packaging, marketing. At the end of the day the entrepreneurs had to secure nearly $50,000 just to have a decent go at generating sales, and we still weren’t certain that the product would sell.

This process is what many entrepreneurs with commodity products go through. Entrepreneurs adopt the burden of financing the manufacturing, often by assuming personal debt, and then hope to heaven people want to buy their gizmo. It’s a process that is seriously tilted in favour of people who can take on that financial risk.

With Kickstarter, that whole process has been turned on its head. The financiers are the first customers. Entrepreneurs finance their dreams by directly channelling demand. They answer the two largest questions (“how will I pay for this?”, and, “will anyone ever buy it?”) in one shot. This way, one wouldn’t have to shell out a year’s salary (or two) to see if anyone wants a giant mechanical spider to ride (http://www NULL.kickstarter NULL.com/projects/projecthexapod/stompy-the-giant-rideable-walking-robot-0?ref=category).

Kickstarter is largely considered a ‘tech’ company, but its IT infrastructure isn’t the revolutionary part. Though we’ve forgotten, process is a subsection (http://en NULL.wikipedia NULL.org/wiki/Technology#Definition_and_usage) of technology, and Kickstarter’s brilliance is innovating on the process of production by finding a shortcut through it. That innovation holds tremendous promise, not just for hackers and makers in the West, but multitudes of artisans and creators around the world for whom bringing products to global markets has remained all but a dream till now.

Lesson #2: Unintended Innovation

Funny thing is, I don’t think the Kickstarter team anticipated or aimed for this. And it remains to be seen if they even want to embrace it.

Their initial goal, interpreted from public statements, was to create a platform for patronage to thrive in the 21st century. They sought for a new renaissance of the system that sustained the creative lives of our most iconic composers, artists and thinkers. What they seem to have gotten instead is a fantastic new channel for market feedback and mitigating risk. In fairness, they may yet deliver on their initial vision, too.

As a colleague put it, Kickstarter seems to have been less steered towards its current incarnation than hacked by its users. Either way, they find themselves at a critical juncture, at which they decide to either embrace or discard the innovation.

Whatever they do, my hope is that they have permanently torn open a new option for people to bring creations to consumers cheaply and directly. Scouting the bubbling landscape of niche copycats, I sense that is just the case.

And while unintended, I think it’s a great thing for people all over the world.

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