Around the time that Kickstarter was cluing users into its priorities with a blog post entitled "Kickstarter Is Not a Store," Lou Doctor, who runs both an e-commerce business and a venture capital firm, had a potentially profitable thought: "We are a store."
By marrying crowdfunding with e-commerce in a new site called Crowd Supply, he hopes to build a new path for product development. The Kickstarter-like site, which launches Wednesday, is aimed at taking products through their first year of development and sales.
"On Kickstarter you have a bunch of pages that say, this project was funded on April 14th," Doctor says, "and if you happen to arrive at the page in May, there’s nothing for you to do." After a project on Crowd Supply meets its goal, the site will open preorders on the same page. Then, once the product has been manufactured, preorders will turn to orders.
Crowd Supply will cater exclusively to gadget projects. While many of Kickstarter’s best-funded projects have been gadgets—of 17 projects to pass $1 million last year, six of them involved hardware—the platform's founders have been reluctant to champion them, preferring instead to build its community around music, games, film, and other art. "We didn’t want the company to be involved in a hype cycle," Kickstarter co-founder Yancey Strickler told Fast Company in an interview earlier this year. "People were connecting Kickstarter with how startups get made or comparing us to venture capital. But those are not our communities."
But that is very much how Crowd Supply, with its venture capital roots, wants to operate. And it's created its processes with the hope of avoiding common pitfalls of gadget Kickstarter projects. On Kickstarter, for instance, project creators set an estimated delivery date for rewards when they post a project. But manufacturing process timelines vary greatly depending on the number of orders placed—something project creators can’t know when they first post their campaigns.
Crowd Supply deals with this by allowing for an adjustable estimated delivery date. If a project becomes more successful than anticipated, creators can set a new delivery goal for late backers. It also departs from Kickstarter in taking responsibility for determining reasonable funding thresholds (well, some responsibility—if a creator doesn’t fulfill a reward, you’re still not getting a refund). Additional vetting avoids the awkward situation of setting a goal too low to fulfill promised rewards. Doctor says he’ll keep the vetting process in place as Crowd Supply grows, but he'll rely on a review system of all team players in order to scale it. "We can look at who is doing the industrial design, who they’re using for software and firmware, who they’re using for manufacturing," Doctor says. "And if that partner has delivered on time, that gets them gold stars."
Crowdfunding, in Crowd Supply's environment, is designed to be the perfect product demand test. "In the past," Doctor says, "it was field of dreams: If they build it, they will come. But crowdfunding makes it, if they come, we’ll build it."
Gadgets is one category Crowd Supply will target because it fits in awkwardly on other crowdfunding sites. But an even bigger group of new product creators that haven't made their way onto Kickstarter or Indiegogo are established brands. And the startup plans on extending its vision for the perfect product demand test to them.
"What they don’t want to do is break the mold that is successful on Kickstarter, which is the mold that appears to exist between creators and backers," Doctor says. "They have to personalize that project and make it the passion of a small group." But, he suggests, a company's R&D lab could easily crowdfund a new product in order to impress the mothership. "I think we’re at the beginning of the crowdfunding revolution," he says, "not in the middle of a bubble."
Related story: True To Its Roots: Why Kickstarter Won't Sell
[Image: Flickr user Raoul Pop]