Bay Area start-up Lit Motors specializes in creative vehicle concepts. Their most recent project, the Kubo, takes the urban-utility concept in a direction that emphasizes low center of gravity luggage carry, ease of portage, and accommodative ergonomics.
The folks at Lit call it a “pickup truck on two wheels” and by setting the rider further back on the chassis, nearly over the rear wheel, the Kubo creates a centrally located void in the chassis that serves as the cargo holding bay.
The idea is that with additional accessories such as straps, tie-downs, netting and bungee cords, people will be able to easily and effectively transport more of their stuff around town, without upsetting the balance or rideability of the machine.
On November 21st, they launched a Kickstarter campaign for the Kubo, aimed at raising an ambitious $300,000 in just 30 days. As many of you problem know, Kickstarter is an online fundraising platform designed allow individual consumers the chance to invest money in people and ideas that they believe in. If the goal is not met, then the team behind the idea or project gets nothing.
With the Kubo, as the weeks progressed, it became clear that the campaign was not going to meet its goals. By December 21st, Lit had only managed to raise $57k with 166 backers.
The recent failure of Lit Motors to meet their Kickstarter goal, raises big questions about how effective Kickstarter can be for small businesses creating big products.
Ryan James, Chief Marketing Officer for Lit Motors, posted a very insightful and revealing analysis of the failed campaign titled, “kubo, Kickstarter, and how crowdfunding works (or doesn’t).” The full article can be found on the Lit Motors blog, but I’d like to highlight a few key points that Ryan made for the purposes of further discussion.
His primary critique is leveled at the restrictive campaign rules. By limiting the sales process to 30-days , you limit the amount of prospective backers who have done their research, felt comfortable with their final decision, and are ready to commit to a relatively expensive new purchase that may or may not make it to production.
This “limited subset” as Ryan calls it, makes the 30-day timeframe especially constricting from a marketing and outreach point-of-view.
In contrast, the Local Motors Cruiser is a successfully crowdfunded vehicle project. With 43 backers, the company was able to raise nearly $53k and sell 14 of the bikes. Compared to the Kubo, the Cruiser is relatively conservative, in design and technology, and yet, they were able to raise nearly the same amount of money as Lit Motors, with fewer backers.
Local Motors embedded their crowdfunding campaign directly into their creative design community platform. By integrating the fundraising mechanics directly into their outreach and marketing, they were able to raise money on their own terms. They provided potential backers with assurances that a campaign on Kickstarter could not provide.
For example, if the campaign were unsuccessful in raising its $50k goal, the company’s FAQ explicitly states that backers will still have the opportunity to take delivery of their vehicle, albeit at a later date than expected (or ask for a refund).
Conversely, if the campaign were to go over its goal, then the company would be able to get the bikes to market faster. Thus, prospective backers can feel excited that their money will be going towards something that they can and will eventually own.
This points to a few key opportunities: 1) that Kickstarter needs to diversify its product to accommodate campaigns for vehicles, and 2) that companies can integrate crowd fundraising mechanics directly into their existing marketing and outreach platforms, and deliver a campaign that is not subject to Kickstarter’s terms and conditions.
Here’s to hoping that both of the above happen. It is important that innovators have convenient avenues for mass outreach and fundraising, but it is just as important that they are able to reach the right people in the right time.
We will always need more means of getting around that are in-tune with our everyday needs and environmental concerns and companies like Lit Motors, Local Motors and others like them need the best tools they can get to make their wild ideas a reality.