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.
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.
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.
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.
As we unveil EE Times’ 2015 Silicon 60 list, journalist & Silicon 60 researcher Peter Clarke hosts a conversation on startups in the electronics industry. Panelists Dan Armbrust (investment firm Silicon Catalyst), Andrew Kau (venture capital firm Walden International), and Stan Boland (successful serial entrepreneur, former CEO of Neul, Icera) join in the live debate.