#airbrite

We looked at 121 video game projects that met their goals to raise $100,000 or more. We broke pledge levels into ranges, since pricing across projects varied a great deal.

Those ranges were:

$0-$10

$11-$50

$51-$100

$101-$500

$501-$1000

$1001-$5000

$5000+

The most successful pledge level ranges were $11-$50 and $51-$100, in that order. The first raised about $46,000 per pledge level in the range, and the second raised only slightly less at nearly $43,000. Below $11, the amount raised was trivial. We’ll let the numbers speak for themselves.

Pledge levels between $11 and $500 accounted for 87 percent of all the money raised by Kickstarter video game projects. Those are the backers you want to think about the most, understand the best, and incentivize most effectively. Slightly below $100 is usually the minimum pledge required to get whatever the project is producing.

Notice how pledge levels between $1001 and $5000 are relatively ineffective. Yes, they helped the $100K club raise $2.7 million altogether, but considered singly, they only drew about $9,132 each time they were used. On the other hand, the $5000+ pledges do almost as well as pledges between $501 and $1000. What does that mean exactly? There’s a niche group of backers willing to spend A LOT of money for recognition and access to the creators. It's called conspicuous consumption -- you can read about it here. Like a mirror of America itself, the middle has hollowed out, and only the mass and luxury markets remain.

In the case of Ouya, last year’s largest video game-ish project, these trends were scewed up one pledge level. Ouya got 63,000 backers to pledge a total of $8.5 million last year. Let’s look at the pledges they made. Their most popular level was $99 for a basic Ouya: it attracted 46,125 backers and raised $4.6 million dollars, more than half their total. They also sold a limited edition in the last week of the campaign for $140. It was essentially the same, drew 7,750 backers and landed Ouya a further $1.1 million. Those two pledge levels accounted for two-thirds of Ouya’s funds. There’s something to be said for timing, and scarcity.

In the graph below, the columns are pledge levels starting from $1; the rows are Kickstarter categories; and the cells are the number of projects in each category that used a particular pledge level. Video game projects, like most others, tend to price in $5 increments, with $1 being the obvious exception:

We think that's a mistake, and we'll tell you why next time.

CAVEAT: This should go without saying, but... There are other factors that make Kickstarter projects succeed — pricing is not the only one by any means. Obviously the quality of the promotional material, the experience of the project leaders and the nature of the game itself all contribute a lot, and are probably more important than pledge levels. Other authorities will have more insight on those issues. But we have data. And because pricing is easily quantifiable, you can see trends and make comparisons more easily, which is what we’re trying to do here.

We launched our new e-commerce API today and need your feedback! 

So let's talk scarcity. For the skilled labor force of Silicon Valley, it's a seller's market. The money gushing into tech means demand for developers is outstripping supply. Really good ones were rare to begin with, and now they are like elephants on the Serengeti. Only the big guns take them home.

The best can quit their jobs today and find new ones next week, or tomorrow. When those developers can make or break your startup, you try to give them what they want. 

What they want, generally, are better tools. They want less agony. Less buggy, crappy, legacy code; less half-baked vaporware. They don't want tools limping along under technical debt that make them want to shoot themselves on a daily basis.

So third-party software with a lower agony rating — or god forbid, the capacity to delight — has an easier time finding a market, because that market, suddenly, has a voice.

It used to be you could throw together a minimum viable product, test on a few users, hire a huge marketing team, and pray for recurring sales. The marketing guys would badger and hound CIOs with glossy brochures and endless powerpoints and booze until they sold something that was probably suboptimal, and the CIOs would buy it because they heard it worked. They didn’t understand the pain or didn’t care. 

But with the ongoing shift in power towards engineers, certain B2B businesses have to communicate and market their products in a different way -- or die.

Those companies used to win new customers buy writing puff-piece marketing copy, with the API documentation as an afterthought. Now the APIs convert customers, and the glossy marketing stuff is just there so the CIO can save face as he signs the check.

A new marketing model has developed. It’s not B2B or B2C — it’s B2D.

D stands for different. Developers are more critical than most end users. They don’t pay attention to promises and pathos. Go ahead and try that, and you'll see.

That's different from non-developers. Non-developers respond to ads that entertain, inspire and probably feature celebrities they aspire to be. You’re selling dreams and feelings.

They don’t really pay attention to specs and features. Sure, you can sell them on speed and volume. But it’s a mistake to talk to them about how you’re five times faster than the competition. All companies say that, and no one believes them, and most consumers don’t care anyway.

With developers, you do talk about product features. And you do more than talk about them. You make statements developers can test and prove to their satisfaction. They are deeply, deeply skeptical. When you show them something, their first thought is it doesn't work, and their second is they could have done it better.

So how do you deliver a gee-whiz moment with your product? You show developers what they can make with it.

The cynic might call these developer stunts. Build another Twitter in two screencasts to put yourself on the map. It's just a disguised form of advertising. Fine. No one promised you your product would sell just because it's good. You have to go out and sell it. Advertising is just a way of making sure people know about that good thing you just made. The only difference is that “buy me” gets translated as “look what you can build.”

Click here to learn about Airbrite, a YC 12 company offering an order-processing API for developers. We also make Celery, an easy way for startups to take pre-orders.

There’s life after Kickstarter, and that life takes planning if you want it to go well. Not planning for the campaign to end is like not planning for a baby because the pregnancy is stressful.

But that baby, your business, will need things from day one. One thing it needs is a way to process orders. Orders are how people tell you what they want (your products), and where to send it (their shipping address). If you just finished a Kickstarter campaign and haven’t made anything yet, those orders will be pre-orders.

Every day you don’t take orders is a day you don’t capture demand. The pre-orders are like food for your baby. If you can’t take orders, you’re in trouble. People are e-mailing you asking how they can buy your cool new thing. And you’re e-mailing them back saying thanks it’s not ready yet, dumping their e-mail address in a Google Doc and hoping you keep everything straight.

There are better ways.

Airbrite works with a lot of crowd-funded Kickstarter and Indiegogo graduates. This year, we made Celery, which is an easy way for startups to take pre-orders. We were the first company to help them make the leap from crowd-funding to full-fledged business. Now, companies like Pebble, August Smart Locks and 3Doodler use our business management system, which automates orders and other workflows.

In 90 seconds, you can set up Celery, and you’ll never miss another order. We’ll be there to help you keep track of who asked for what.

The moment to start planning for orders is near the end of your Kickstarter campaign. Yes, life is crazy, but you need to prepare for demand to pour in as soon as you meet your funding targets.

This post is the first of a series, based on our experience with thousands of successful businesses, that will show a few things you can do to get luck on your side. Plan for success.

Click here to learn about Airbrite, an order-processing API for developers. We also make Celery, an easy way for startups to take pre-orders.

It's $100,000.

That's the line most successful businesses cross in their fund-raising. It's just rule of thumb, of course. There are notable exceptions. We work with some of them. But as a rule, when you're seeking market validation, $100,000 says you got it.

We work with and analyze thousands of crowd-funding graduates of Kickstarter and Indiegogo. We see what sells and what doesn't. Raising funds in the ballpark of $100,000 or more is the chief metric we use to calculate a project's likely success.

If you raise that much or more and don't screw up, chances are you'll make a go of it. If you're very far south of 100K, you need to rethink your fundraising tactics or your product or both.

OK, data time: Of the 50,881 successfully funded projects on Kickstarter, 917 have raised $100,000 or more. That's about 2 percent with business-grade demand. The Kickstarter categories with the most 100K+ projects were games, technology and design, with film and video a distant fourth.

An Airbrite analysis of more than 550 of the most successful Kickstarter projects over the last two years shows that, on average, those projects have about 5,900 backers, while projects that fall short of the threshhold have on average about 2,900, or less than half. Backers in the 100K+ category tend to spend about $86 apiece. That’s right. More than 100K in baby steps. But notice that, if you can convince 5,900 people to commit $86 apiece, you just raised yourself more than $500,000. It's harder if you're charging $8.

Sure, not everybody wants to turn their Kickstarter project into a business. Maybe you're making a movie, or just building a cool gadget for yourself and a few backers. That's great. We still like you. But this post was not written with you in mind.

Instead, it's for makers and nascent businesspeople who regard Kickstarter as their pre-seed round.

So what are you supposed to conclude? Most people raise money for what they need. If they want to make X number of widgets, they raise Y amount of money. Sometimes that's $100,000, sometimes it's less.

We're saying if you want market validation, then at a minimum you should raise money for $100,000 worth of widgets. If you set your sights lower than that, you can't be sure you have a market, even if your campaign is successful. Don't sell yourself short.

Click here to learn about Airbrite, an order-processing API for developers. We also make Celery, an easy way for startups to take pre-orders.