Sixense's new wireless controller houses the oblong Sixense Tracking Embedded Module (STEM, left), which OEMs can embed in their own specialized controllers, such as a head-mounted display, golf club, or tennis racket.
Sixense is using Kickstarter in hopes of attracting more OEM clients. Instead of just consumers, they hope that developers who want to take their module and put it into their own controllers--say a head-mounted display, or a golf club, or tennis racket, or whatever--will contribute enough to their Kickstarter project to get the system development kit that includes the STEM base station. The base station recharges two of their own controllers, but also up to three power packs for OEMS using Sixense's module in thier own controller.
It almost makes more sense to me for somewhat established companies to use Kickstarter than it does for not established.Kickstarter opens a lot of opportunities, but it doesn't solve most of the problems of starting a business. It's still not easy to get past the initial project to the point of being a viable company.
You still have all of the same costs. They've just been moved in time. If you don't price it right, either you won't quite have enough money to create the infrastructure that goes along with building a company or you'll have spend everything and not have any left over for manufacturing the next batch.
With an established company, that infrastructure is already in place. There's (hopefully) a revenue stream already in place to smooth out the bumps and to sustain the product after launch.
Sixense said they are not giving up on traditional funding sources, but want to use Kickstarter to popularize their solution to the developer community. Their system developers kit, which includes the base state pictured, is their first product under their own brand, but they claim they don't want to go into competition with their OEMs, but in fact want to attract more with this Kickstarter project.
Kickstarter could simply be used as a marketing channel to launch new products. Not only does it enable companies to gauge interest in new products, it drive pre-launch orders, creates an advertising channel to a community of innovative users, and generates creates community "buzz". This method is probably a lot cheaper (even with the commission to Amazon) than a conventional launch with paid advertising.
Sometimes not making your goal can be more valuable than making it. You get all the buzz without any of the obligation. Consider Ubunto Edge over on Indiegogo. They got $12.8 million in pledges from 27.6k backers. Great support! But their goal was $30 million. So no obligation, but an instant community of support.
And to carry your (@marknowotarski) point one step further - if a product is destined to be a complete market failure, a miserable showing on Kickstarter only bruises your ego. There are not millions of dollars of unsold inventory rusting in the warehouse or being discounted for pennies on the dollar. I wonder whether the questions posed by prospective buyers also help point the company in the direction of what people DO want.
More than a bruised ego, failure on Kickstarter (or Indiegogo or Rockethub etc.) can lead to enormous learning and inspiration for future success. Consider our mutual friend Doug Lyon, chair of the Computer Science Department at Fairfield U. Doug wanted to figure out how Kickstarter worked so he could teach his engineering students. His first run, "Automatic Robot Camera", failed spectacularly ($238 raised for $10,000 goal). Embracing the learning experience, his second run, "Arduino Digital Signal Processor", did much better ($7,859 raised for $2,000 goal). Now he's having a great time building and delivering the product including learning all about the joys contract assemblers, order fullfillment, regulatory requirements, customer demands etc.
In Doug's view, our modern economy demands that engineering students learn to be employers as well as employees. Crowdfunding is a great way to get started.