Prefundia: a Kickstarter for Kickstarter
If you have to know one thing before starting a Kickstarter project, it’s that not every project is a party like “Potato Salad” by Zach Danger Brown. In a way, Kickstarter — a platform that helps raise funds for potential projects — has become a way for entrepreneurs and the like to gauge potential success of their product after they’ve launched. If someone is going to pay for a product that you haven’t even finished building (I’m looking at you, myIDkey), these suckers are surely going to pay for it when it actually exists!
To combat the perils of Kickstarter failure and the depression that comes afterwards, Prefundia has built a platform that will improve Kickstarter success. They can do this by looking at the initial interest in a potential project before it goes live on Kickstarter. It’s kind of like a Kickstarter for Kickstarter. Prefundia is a legitimate business because it uses the principle of information cascades to raise awareness for a project.
According to statistics released by Kickstarter, only 43% of projects meet their goals. Explicit reasons for failure were not described, but we can hypothesize why using the principle of information cascades. Since the funding amount is publicly viewable to anyone on the website, a potential donor is influenced by how many other people have donated. Regardless of whether or not he personally believes in the project, if a project has almost no donors, he might be inclined to believe that people who chose not to donate might have had private information that he may not have. As a result, he will be inclined to ignore his own signal and follow the wisdom of the crowd. Conversely, if he sees that a project has received huge publicity and raised way above its goal, he will be inclined to believe that there is something spectacular about the project, even if he himself does not see it right away (Potato Salad). This pattern of donating will cascade into a “boom-or-bust” type of projects in which a project gets either massive funding or very little funding at all.
The way Prefundia works is actually pretty cool. It lets people submit a description of their project and a button to subscribe to email notifications BEFORE it goes live on Kickstarter. The belief is that if there is a community that surrounds the project , the initial interest when it launches on Kickstarter will be higher than average. The project will then be able to use that momentum and gain more supporters throughout its campaign cycle. Information cascade tells us that a success of a project can be predicted by looking at early interest since this small group of supporters will snowball into a very large group of supporters. So the next time you want to start a Kickstarter for your self-published book of poetry, make sure you go through Prefundia.
But the real question remains: when will they make a Prefundia for Prefundia?
Sources:
https://www.kickstarter.com/help/stats
http://mashable.com/2014/04/16/prefundia-kickstarter-crowdsourcing/
https://brooklinjb.wordpress.com/2013/09/29/what-is-prefundia/