How to Start a Crowdfunding Website Like Kickstarter

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Back in 2012, when Perry Chen - the co-founder of Kickstarter was thinking up ways to bring his idea to life, he thought that only an outstanding platform that is simple and easy enough for people to use will give kickstart a chance. With less than $10,000 at hand, Perry went on about his endeavour to create a masterpiece inside of this limited budget. What came out of all this was a crowdfunding site called "Kickstarter" which has so far had over ‎$5 Billion pledged dollars by more than 11 million people across the world! So what you can expect today is not just an article... but nothing short of a piece of art! Sit back and be prepared for quite the ride!

What’s Kickstarter?

A new system being introduced by Kickstarter has made it possible for creators to run a more successful crowdfunding campaign. They implemented a new rule that gives their users the ability to pre-sell items before they're even made! This is especially beneficial to crowdfunding campaigns, as it allows the creator of the project an opportunity to gauge interest so that they can have enough money to fund their project or run a better campaign.

The idea for Kickstarter was first conceived as far back as 2007 when Perry Chen met Charles Adler, an accomplished designer who offered to create a website. It wasn't until 2009 that this vision became a reality and the Kickstarter website was launched.

Since its inception, 18 million people have backed projects and 18,000 of those projects have been successfully funded. Such numbers are truly incredible and we're going to take a look at how they achieved such great success by exploring some key aspects of their business model.

What makes Kickstarter special?

Kickstarter isn’t the first crowdfunding website, but it has some valuable features that no other website can boast! Campaign creators can further communicate their ideas and backers alike with the following advantages of the platform:

All-or-nothing principle

Crowdfunding websites usually work such that when a creator set up a Kickstarter and doesn’t achieve their goal, no matter what, they still grab the funds that were already raised. This means that donors may invest in projects where there’s a marginal likelihood for success to happen.

To make sure creators get more chances to succeed, Kickstarter redefined the funding approach and offered a more reliable model. On Kickstarter, backers pledge a certain amount of money, but campaign creators can get it only if the total amount pledged reaches or exceeds the funding goal. Backers aren't charged anything until a campaign is fully funded. This principle is called all-or-nothing. The campaign creator either receives the full amount to develop their idea further or leaves with nothing.

Kickstarter believes in creativity

Ever take a look at the first page of projects on the Kickstarter home page and notice that a lot of them seem to be related to art? It's no coincidence! Kickstarter doesn't allow charity campaigns, political campaigns, agricultural products, medical technology projects or non-inventive personal projects.

Ownership remains with the creator

Backers invest in projects for many reasons, including to support a friend or simply like an idea and believe in it. Although backers invest in the product itself, the ownership of that idea always belongs to the creator. In exchange for supporting a project when it is still only an idea, backers receive rewards; these are typically limited editions of products or copies of creative works when they become available.

Kickstarter business model

If a project is successful as far as reaching its goal, Kickstarter takes five per cent of the total raised. Kickstarter also charges a fee of three to five per cent (depending on the amount pledged) for each time you receive money from backers.

Straightforward workflow

Kickstarter creates a unique, direct connection between projects and people who are interested in them. It offers a straightforward system that allows anyone to see how money is being distributed whenever funding is successful. Here's how it works for creators:

  • #1. Register an account at Kickstarter.
  • #2. Make your profile available to be seen by others on the platform.
  • #3. Set a goal amount you want to raise and a timeframe to accomplish it.
  • #4. Explain to potential backers what you will use the funds for if your goal is met, as well as the expectations of those who contribute to your project.
  • #5. If the funding goal isn’t achieved, backers aren’t charged and all tiers of rewards are stripped.

Kickstarter business model canvas

To validate your business idea, you can use a business model canvas. Typically, a business model canvas is a one-page template where you indicate key aspects of your organization. This tool helps you focus on your target audience, the value your product can bring to users, and how your company will make money. A business model canvas is useful when it comes time to validate whether or not an entrepreneurial opportunity has potential since it's fairly quick and easy to create and allows for changes when they're needed.

To help you create a business model canvas for your website, we share the following example of a business model canvas for Kickstarter.

The feature set for a crowdfunding MVP like Kickstarter

Creating a website to better work all aspects of the crowdfunding process takes planning and development. Clearly defining your users, categorizing them into specific types, then outlining a profile for each user type, will help define a thorough plan for functionality while keeping in mind each actionable step the crowdfunding website should take. Below we outline example profiles for administrators, backers, and creators on an online crowdfunding website similar to Kickstarter.

The feature set for administrators

Administrators require special tools that allow them to perform tasks related to moderating the website, managing creators, investors, and projects. Here’s what administrators will need most:

  • Account management — Administrators can filter and sort lists of creatives and backers, so they can easily see the most updated information. If users violate platform rules, administrators can deactivate or ban their accounts.
  • Site users — Each user should be able to log in with their account because an account is used to track the changes made by the individual. This helps improve transparency so that changes in the site history may be reverted and in case a change was an error made in haste by a person, responsibility for it can be attributed accordingly.
  • Project and category management — The platform should allow users to see which items ("projects" or "categories") exist on the website and how many of them there are (there should be counters visible next to each such item). Additionally, the system should permit users to add new projects and categories (remove existing ones) when required.
  • Investment and Transaction Management - Administrators should be able to sort and export transactions, view payment data related to each transaction, including backer contact information, and also report errors to users.

The feature set for backers

When visiting crowdfunding websites, backers want to find and support innovative ideas. Below are the main features that will make it convenient for backers to invest in ideas they like:

  • Registration — To make registration painless, allow backers to sign up not only with the help of email but also with Facebook, Google, Apple, or Twitter accounts.
  • Authorization and access — Allow backers to log in to their accounts with an email and password, update their phone numbers, change passwords, and delete their accounts.
  • Profile — Backers can upload an avatar of their choice. Also, provide brief information about themselves.
  • Project Exploration — Supporters can view a list of categories and projects within these categories. They can also study profiles of projects they like which should contain detailed descriptions, videos, photos, and overviews of project risks and opportunities.
  • Payments and Investment Settings — Backers can choose their preferred methods of payment along with settings for transactions that will happen on the platform. They also have the option to select investments on projects through this interface.

The feature set for creators

Help creators get funding for their ideas. These are the features that creators will need to present and manage campaigns:

  • Registration — Creators should be able to register using an email address and a password or using existing accounts in other systems, like Google, Facebook, and Twitter.
  • Authorization and passwords — Creators should be able to log in with a registered e-mail or phone number and should be able to reset a forgotten password.
  • Kickstarter profile editor — Creators should have the ability to add information about themselves and their team as well as add an avatar image.
  • Project management - Users should be able to create projects via Chakra. When doing so, they should be able to add a project description, videos, photos, and business plans. With their Plans & Goals section, creators can give backers key information on how they will use any funding received for this project.
  • Manage investments - Campaign creators should be able to view the details of pledges, see how much they’ve raised, and see if they’ve reached their goals.

How to build a crowdfunding website like Kickstarter

When you’re thinking of developing a website like Kickstarter, there are three ways to go about it: using a content management system, purchasing a white label solution, or developing your website from scratch. We explain the pros and cons of each approach below.

Open source content management system

A content management system (CMS) is software that allows you to build your product.

There are many free and paid content management systems. But, not all of them are appropriate for building a crowdfunding website. WordPress is a great example of a CMS that can be used to create a crowdfunding website. To make your website work, though, you will need to add some additional features like a theme which could be IgnitionDeck or FundingPress. In addition, some plugins might also need to be downloaded to expand the functionality of your website further yet.

Advantages of choosing a CMS approach

  • Attractive price. Bakers who want a basic pastry recipe book will be able to obtain one for a significantly reduced cost, as opposed to ordering customized ones or making them from scratch themselves.
  • Frequent updates. Creators of paid themes and plugins are interested in attracting new users to their products. Since the competition between developers is high, creators improve their themes and plugins as often as possible.
  • The upside is that updates are provided for you, so you don’t have to make changes yourself, nor does it require in-depth knowledge of coding (if you opt for some type of development plugin like Displate). A crowdfunding website doesn't require in-depth knowledge of coding; by using some type of development plugin like Displate, you can easily put together a crowdfunding website.

Disadvantages of choosing a CMS approach

  • Template solution. Note that with all its advantages, a CMS can’t be used to build out something unique. You need to use the same solutions as other similar sites if you want your website to stand out because it won’t retain users otherwise since they will see something familiar - hence why you need to offer them something new that they haven’t seen before or experienced before.
  • Precarious security. WordPress has exceptional security but there are plugins and themes people often use on their websites that can affect this security which makes the site susceptible to hacks. A Vulnerability Scanner like WPScan reveals 86% of site hacks are carried out because of these weaknesses in these third-party plugins and themes.
  • Hidden expenses. WordPress comes with a free package of themes and plugins, which at first glance looks fantastic! You can have a fully functional website for your crowdfunding project up and running in no time. The only problem is that the free packages don’t always come with the functionality you need to get your site off the ground. If you want any features that aren’t included, there might be hidden costs coming from somewhere else that you didn't initially consider, or if not hidden costs then maybe features that take more work on your part to accomplish.
  • You can’t own or customize it. WordPress is open-source, which means that everything you do on your site, good or bad, is viewable by anyone. This could be an issue if you don’t want information about your company floating around on the web for all to see. It also means that no matter how much you customize WordPress, you are never truly in control of your website because others have access to its files.

White label solutions 

A white label solution is a way to start a website where you are given access to an almost complete crowdfunding website. When selecting this option, you will be provided with the source code for your site. The only thing that needs to be done before releasing your site to the public is to add features and brand it.

Advantages of choosing a white label approach

  • Quick market launch. A white label solution is well suited for those who want to quickly get their crowdfunding site to the market if they are in a time crunch. Unlike developing a completely custom crowdfunding site from the ground up, business owners can purchase an almost pre-developed white label solution and launch within 3-5 months! When you purchase a white label solution, you get a website with the most common and necessary set of features for a crowdfunding website. You can customize the site, add or remove any of these features and hit the market confidently and quickly!
  • Full ownership. When buying a product reseller license, we’ll give you access to use and customize the source code on your website as you see fit and as it matters most to your company and customers.

Disadvantages of choosing a white label solution

The application’s technology stack can be a challenge when opting for white label software. The default framework that the product comes built-in is not something you can change because it’s already chosen and built-in. But if you need to adjust this aspect to fit your needs, then it may be best to develop your e-commerce website from scratch or find a provider which offers an open architecture and high flexibility so as for you to stay in control of the tech stack.

Development from scratch

Creating a website from the ground up means you need to build a team that will help you create your website from scratch. In doing so, you might consider these strategies, which offer proven groundwork when it comes to developing your crowdfunding site: 1) Determine your goals and objectives 2) Focus on your target markets 3) Emphasize ease of use 4) Keep branding in mind 5) Brand your user interface

Advantages of choosing development from scratch

  • One-of-a-kind platform. Development from scratch enables us to create a unique, user-friendly crowdfunding platform designed to meet your needs and your brand’s requirements. This can be a winning strategy for your business as it will allow you to stand out from the competition.
  • Perfect feature set. The platforms being offered by most conventional website builders are typically not well suited to serve the particular needs of your venture. When you have people develop custom solutions for you, you choose the specific features that best suit your market and that best appeal to your target audience.
  • Custom technology stack. There can never be too many principles that guide innovation and it's vital to be able to pick and choose the most efficient and modern for your business. This approach also allows you to think about what might happen if certain aspects of your website don’t play out as expected, so in case of errors or code updates, developers will understand exactly what needs to be done.
  • Step-by-step development. Creating a viable minimum feasible product (MVP) before launching your new website helps you avoid the common pitfall that most businesses face – creating something that looks great on paper but is ultimate of little interest to anyone and won’t sell. MVPs, which target niche markets and provide users with a subset of the functionality you eventually intend to release on your main site, can be created in as little as six months.

Disadvantages of choosing development from scratch

While the most difficult of the options, developing from scratch also gives you ultimate control. It also includes more flexibility and enhancements since everything goes through a single point of control before reaching the end-user. In addition, this is a great choice for costly risks or incompatible products that may arise from working with alternatives.

The verdict 

A white label solution or an open-source CMS will help you save money and time. However, in opting for one of these approaches, you risk getting a buggy template with little chance to stand out from the competition. Despite the higher cost and longer development time, building a crowdfunding site from scratch allows you to create a perfect match for your end-users and business requirements.

How much does it cost to build a crowdfunding website like Kickstarter?

Here we break down how much it will cost to create a Kickstarter-like platform - written out in an easy-to-understand form. We're even going to give you some examples, just because we think doing so makes it easier to conceptualize and comprehend the information!

Administrator features

Backer features

Creators features

In total, it would cost a little more than $173,000 to develop a mobile app that runs on iOS and Android devices.

To calculate the cost of development you’ll need to know the cost of your team. Developers might charge different rates depending on regional location and their expertise.

According to Clutch, the hourly rate in India varies between $15 and $25. If you hire a team in the United States, be ready to pay between $150 and $199 an hour. The hourly rates in Australia are slightly lower, ranging from $100 to $150. Eastern European developers charge between $25 to $50 an hour.

Based on the average cost and time required to create a website for your business, we’ve calculated how much it will likely cost for various sizes of websites.

Don’t choose a development team based on price alone. Take quality, the maturity of their workflows, and experience into account when looking for a development team to approach your project. Examine previous work by the provider in question, look at their social media activity, and read reviews from satisfied customers before making a final decision. The more you know about the development company you are interested in contacting about your project, the better results you can expect when all is said and done.

Team composition and schedule

Taking the original estimate as the baseline, a team for developing a crowdfunding software to help you raise funds online could look like the following:

You should be able to finalize this project within six to seven months with such a team.

Wrapping up

It’s hard to decide on which development company is the best fit for your new website! You need a high-quality team that can supply, develop and design new features for your website. When choosing the right development agency, you should always make sure to check they have good experience in developing online products related to what you’re planning to launch.

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