Ask HN: Why are there no software projects on Kickstarter?
Why are there no software projects on Kickstarter? I see hardware projects from both small teams and large companies. But I don’t see any software projects. Why is that?
Several projects related to the Django web framework were funded through Kickstarter, e.g. built-in schema migrations [1], improved support for PostgreSQL [2], and work on the Django REST framework [3].
I would say that most pure software project are not necessarily capital intensive, so if you have an idea you can just execute it, and directly start selling to customers, so it makes less sense to do a Kickstarter.
Even if you do not really intend to monetize, and you want to develop something to scratch an itch, a Github account is rather affordable.
I'd counter that money can give some runway for the project to better exist than it otherwise would be able to as a side project. If someone said, "If I can raise $20,000 on Kickstarter I'll quit my job and work on this full time, aiming to deliver in 6 months" that's a different value proposition that simply running a GitHub account and coding in spare time does not afford.
Patreon is much better fit for continual software maintenence. You get a monthly income to keep improving the software.
That said, video games aren't unheard of on Kickstarter. There's a final product to deliver to the backers so they can check the "successful Kickstarter" box and then move on to a new project.
I think part of the issue is that most software projects tend to be a service or have managed components, making it tricky to provide ownership to a finished product, which is ambiguously stated as a requirement:
> At some point, the creator should be able to say: “It’s finished. Here’s what we created. Enjoy!”
When you're making hardware, there's a logical way to structure backer rewards by offering the first units off the factory line. You can give these to your early backers (to incentivize them to sign up) or to people who back later but pay tons of money.
With software, there is no equivalent of "first unit off the factory line". You could artificially create this dynamic by releasing the software in phases to different tiers of backers, but this would probably just anger people because it's entirely artificial. There are also limitations around apps, for example Apple won't let you offer TestFlight beta testing as a reward. And of course, you can't let people buy an iOS app through Kickstarter either.
I had to think creatively about the rewards/tiers for my software kickstarter, which was successfully funded. [1] We let people who paid a little money vote on a certain set of features, and people who paid more money could both submit options and also vote. We also had branded mugs for higher-tier backers as well, which we drop-shipped via Costco (note: only offer this to US-based backers...). I think these voting/nominating tiers would work well for most software, since it's costless to let people vote, and you want to make something that your users want anyway.
Worked out great! We were fully funded, and I reached out to the community again when we launched a tool for another platform (Chrome extension). Several years later, and we still have thousands of active users.
I would love for something like "Kickstarter for software" to exist. It would help separate the "oh, that's a nice business idea, you should build it" crowd from the "I need that app now and will happily pay for an ugly but workable version of it" crowd.
There are lots of software projects on Kickstarter! I think what you're considering, though, is _consumer_ or _enterprise_ software. Which is because the incentives don't align that way. The way to capitalize those businesses isn't through Kickstarter.
Does Kickstarter allow you to raise money to build a product, where in exchange for their support, you offer to give your backers a percentage of future profits? And with an agreed upon profit sharing restriction.
Or is something like this in contradiction with SEC investing rules.
The interesting thing is if you build something that brings in $1 billion in profits, and you continue to pay that small percentage out to your initial Kickstarter supporters.
You put up a half-baked idea, and random people will throw a few hundred dollars at you to help you achieve it. And all they get is a thanks, and perhaps a mention, and possibly a tshirt.
And sometimes the person never had any intention of building the product to begin with. It was an elaborate scam.
Kickstarter knows many projects fail, which is why they want to ensure there are no guarantees or legal entanglements with the types of projects there. As a Kickstarter purchaser, you have to know what you're getting into. I actually was burned by one project (the HydraDock) but I honestly wasn't that angry; I knew the subtle difference between sponsoring a project and a pre-order.
Is there a platform that does? I've (not a developer) looked at IndieGoGo for help funding my software development since I've had trouble putting together an equity team to help get it from concept to at least prototype.
I think it relates to the most common reward type permitted for the project backers. Generally, they get the item they have backed, such as a game, a movie. This tends to favour physical goods
Software projects have a much lower barrier to entry and doesn't require upfront intensive capital. The only thing you can do with kickstarter for a software project is to get paid for your own time building the project. Most people don't want to pay for that unfortunately. Doesn't have the same appeal as a tangible physical product that you can showcase.
Kickstarter is for experimental and new things. Software customers are not looking for new things. They just want their problem solved and will not wait for a kickstarter project to do that unless you are building the next AI but then you have the FAANGs doing it already.
KS has long been used as a promotional vehicle for kick-starting not so much the product development, but marketing/sales of the same. Often times it looks like the developers themselves cover the final gap if the project can't achieve its set goal naturally.
This way they basically go after a permission to spam supporters with project updates, asking for retweets, mentions, etc. It helps gathering free beta testing crowd. Perhaps there are also some SEO benefits too.
So in this context OP's question is really quite valid. I'm guessing that no one has thought about using KS this way yet and it's definitely worth a try.
There are about a dozen notable software projects that raised money on Kickstarter, but it's a tiny percentage compared to the total.
Font Awesome, Light Table, LiveCode, Lavabit, Diaspora, Ghost, NoFlo Flowhub, Hypothes.is, etc. used Kickstarter to fund parts of their projects. See Kickstarter Technology > Software category [1]. There's a steep drop off from amount raised by notable projects to all other software projects.
The total amounts raised by software projects is significantly less than other categories like hardware, board games, and art. Mostly this is do to 1) how Kickstarter rewards work, 2) how Kickstarter marketing works, and 3) the psychology of backers and existing angel investors.
It's hard to come up with good rewards for software projects. Since Kickstarter does not allow equity rewards, the only option is a discount or tangential reward like a t-shirt. People are already accustomed to seeing special deals or bundles for software that's already built. Giving a 50% discount or lifetime access on Kickstarter is typically not enough for potential backers to take the risk for a project in prototype or concept stage.
Projects that raise $100k+ in any category are almost exclusively driven by marketing. Ads, influencers, email lists, cross promotions, etc. Kickstarter will give an algorithmic discoverability boost to projects that are generating a lot of sales, but you pretty much have to bring your own traffic.
Kickstarter marketing agencies almost always pass on helping software projects. Disclaimer: I have a marketing agency and get a lot of inbound requests to help with software, which I turn down. Kickstarter marketing is already a niche (about 1M backers in the USA) and narrowing further down to software makes the niche too small to work on most ad platforms.
Software projects with large built-in audiences or existing customer bases have used Kickstarter to fund new milestones. See Lavabit Dark Mail Initiative [2]. But we don't see this very often since the risk to reward ratio isn't in the project's favor. It's unlikely that a software project will get a lot of organic exposure on Kickstarter. Most of the backers will be existing project users.
Due to the public nature of Kickstarter and limited campaign length of max 60 days, there's a high risk the raise will be seen as underperforming by the public or existing angel/VC investors.
Summing it up... if you want to raise money for software by pre-selling at a discount, you might as well just do it through Stripe and save yourself the 5% Kickstarter fee and hassle of doing a Kickstarter campaign.
I've wondered this as well. I think the idea of a small-team open source project funded on KS in milestones is feasible. However, the promotion would need to be handled by the community and backers vs the developer team. Otherwise the time and monetary cost of frequently running campaigns on KS would be too high of a distraction.
I also think there's room in the market to create a KS alternative specifically for software that actually helps with promotion.
[1] https://www.kickstarter.com/projects/andrewgodwin/schema-mig...
[2] https://www.kickstarter.com/projects/mjtamlyn/improved-postg...
[3] https://www.kickstarter.com/projects/tomchristie/django-rest...
Even if you do not really intend to monetize, and you want to develop something to scratch an itch, a Github account is rather affordable.
That said, video games aren't unheard of on Kickstarter. There's a final product to deliver to the backers so they can check the "successful Kickstarter" box and then move on to a new project.
https://www.kickstarter.com/projects/232193852/font-awesome-...
I think part of the issue is that most software projects tend to be a service or have managed components, making it tricky to provide ownership to a finished product, which is ambiguously stated as a requirement:
> At some point, the creator should be able to say: “It’s finished. Here’s what we created. Enjoy!”
https://www.kickstarter.com/rules
With software, there is no equivalent of "first unit off the factory line". You could artificially create this dynamic by releasing the software in phases to different tiers of backers, but this would probably just anger people because it's entirely artificial. There are also limitations around apps, for example Apple won't let you offer TestFlight beta testing as a reward. And of course, you can't let people buy an iOS app through Kickstarter either.
I had to think creatively about the rewards/tiers for my software kickstarter, which was successfully funded. [1] We let people who paid a little money vote on a certain set of features, and people who paid more money could both submit options and also vote. We also had branded mugs for higher-tier backers as well, which we drop-shipped via Costco (note: only offer this to US-based backers...). I think these voting/nominating tiers would work well for most software, since it's costless to let people vote, and you want to make something that your users want anyway.
1: https://www.kickstarter.com/projects/72264020/read-across-th...
Such as a free pro account for life or 50% off platform fees
I like your idea too. Id expect that it would create a trusted beta group that has more buy in... How did it work out?
What about early access?
This was a pretty successful product for 2d animation:
https://www.kickstarter.com/projects/esotericsoftware/spine
Or is something like this in contradiction with SEC investing rules.
The interesting thing is if you build something that brings in $1 billion in profits, and you continue to pay that small percentage out to your initial Kickstarter supporters.
> Projects can't offer equity.
> Investment is not permitted on Kickstarter. Projects can't offer incentives like equity, revenue sharing, or investment opportunities.
https://www.kickstarter.com/rules
You put up a half-baked idea, and random people will throw a few hundred dollars at you to help you achieve it. And all they get is a thanks, and perhaps a mention, and possibly a tshirt.
And sometimes the person never had any intention of building the product to begin with. It was an elaborate scam.
Kickstarter is for experimental and new things. Software customers are not looking for new things. They just want their problem solved and will not wait for a kickstarter project to do that unless you are building the next AI but then you have the FAANGs doing it already.
This way they basically go after a permission to spam supporters with project updates, asking for retweets, mentions, etc. It helps gathering free beta testing crowd. Perhaps there are also some SEO benefits too.
So in this context OP's question is really quite valid. I'm guessing that no one has thought about using KS this way yet and it's definitely worth a try.
Font Awesome, Light Table, LiveCode, Lavabit, Diaspora, Ghost, NoFlo Flowhub, Hypothes.is, etc. used Kickstarter to fund parts of their projects. See Kickstarter Technology > Software category [1]. There's a steep drop off from amount raised by notable projects to all other software projects.
The total amounts raised by software projects is significantly less than other categories like hardware, board games, and art. Mostly this is do to 1) how Kickstarter rewards work, 2) how Kickstarter marketing works, and 3) the psychology of backers and existing angel investors.
It's hard to come up with good rewards for software projects. Since Kickstarter does not allow equity rewards, the only option is a discount or tangential reward like a t-shirt. People are already accustomed to seeing special deals or bundles for software that's already built. Giving a 50% discount or lifetime access on Kickstarter is typically not enough for potential backers to take the risk for a project in prototype or concept stage.
Projects that raise $100k+ in any category are almost exclusively driven by marketing. Ads, influencers, email lists, cross promotions, etc. Kickstarter will give an algorithmic discoverability boost to projects that are generating a lot of sales, but you pretty much have to bring your own traffic.
Kickstarter marketing agencies almost always pass on helping software projects. Disclaimer: I have a marketing agency and get a lot of inbound requests to help with software, which I turn down. Kickstarter marketing is already a niche (about 1M backers in the USA) and narrowing further down to software makes the niche too small to work on most ad platforms.
Software projects with large built-in audiences or existing customer bases have used Kickstarter to fund new milestones. See Lavabit Dark Mail Initiative [2]. But we don't see this very often since the risk to reward ratio isn't in the project's favor. It's unlikely that a software project will get a lot of organic exposure on Kickstarter. Most of the backers will be existing project users.
Due to the public nature of Kickstarter and limited campaign length of max 60 days, there's a high risk the raise will be seen as underperforming by the public or existing angel/VC investors.
Summing it up... if you want to raise money for software by pre-selling at a discount, you might as well just do it through Stripe and save yourself the 5% Kickstarter fee and hassle of doing a Kickstarter campaign.
[1] https://www.kickstarter.com/discover/advanced?category_id=51... [2] https://www.kickstarter.com/projects/ladar/lavabits-dark-mai...
I also think there's room in the market to create a KS alternative specifically for software that actually helps with promotion.