Wouldn’t it be wonderful to design products by actively involving the consumers and get them to suggest the features and designs? This is essentially a type of co-creation – by getting the end users to be fellow designers and collaborators. Now, if there are products that are actually co-created, surely they are more successful than their competitors, right? After all, they were designed with the users.
Well, not really – the reality is not as rosy.
Thanks to crowdfunding platforms like Kickstarter and Indiegogo, we have live petri dish to observe. For those unaware, crowdfunding platforms allow inventors and innovators to present a product prototype, so end users can contribute money to the project. As a reward, contributors will get the end product before it is made available to the general public. Project creators can pitch anything from music recording, product design, books, comics, games, and any innovations that they can think of. In many cases, when the money is sufficiently raised for the project to go off the ground, the creator can then ask for input from the supporters on additional features or wishlist. This can be new colour options, feature upgrades, or additional things to throw in on top of the product.
Sounds perfect, right?
As alluded in my post before, I have dabbled in Kickstarter for years. The first project that I backed was the Pebble watch in 2012 – a smart watch that would work with both iOS and Android phones, years before the Apple Watch was introduced to the public in 2015. There were projects that came to no fruition, so I had to write-off the money I contributed, but by and large, I received what I was promised for. The 2010’s were the heyday of my Kickstarter activities (before the platform is flooded by dodgy projects and unscrupulous creators) – so in October 2013, I got curious: How many of Kickstarter products actually survive the test of time?
So, I randomly selected 200 successfully-funded projects in October – November 2013 that also delivered the products to the contributors (or the “backers”). Crowdfunding projects typically take months to deliver the promised products. So, roughly at five-year mark post project fulfillment, I checked whether anybody could still purchase or consume the products. I repeated the process earlier this year, at roughly the ten-year mark post project fulfillment. If I could still find the product on the Internet (through sites such as Amazon, YouTube, Bandcamp, and so forth), then I would classify the product to have survived. However, I could not find any evidence of its existence beyond the original Kickstarter project, I would consider the product to have died.
So, how do crowdfunded products fare?
On average, less than half (46%) of the products still existed ten years after launch. I also took a poetic licence to consider any updates or upgrades to the original product as a sign of survival – if they were still owned by the original project creator. Music has the best 10-year survival rate (84%) due to the crowdfunded album or recording being consumable through sites such as YouTube, Bandcamp, or Apple Music. Only 35% of Design and Technology products survived after 10 years. As a comparison, the failure rate across various industries as cited by Castellion and Markham (2013) is 40% on average – which is comparable to the survival rate at five years for this category. These include innovative products with feedback from the project backers, e.g., minimalist wallets, travel bags with features missing from mainstream offerings, and home brew kit machines. To be fair, some projects are meant to be one-off, e.g., concerts or commissioned arts – so some products are not meant to ‘survive’.
So what are the lessons …
- Active consumer involvement is not the tonic for product success or long term survival. Crowdfunded and co-created products do not have better survival rate than those produced through the normal R&D route. Consumer input for product development does matter, however including consumers in active R&D process could take away precious effort from other important activities. Consumers often don’t know what they truly want or need.
- Innovation is exciting, but it is just a small part of business growth and survival. Exciting and innovative products such as Pebble smart watch, Nura earphones, Nebia shower head, PicoBrew home brew kit are all innovative but none survived. As an attempt to grow their business, project creators churned out follow-up crowdfunded projects to release more models. Their main target? Original project backers and other other Kickstarter enthusiasts. By 2024, they were mostly gobbled by big companies such as Garmin (Pebble), Denon (Nura), Brondell (Nebia) and in the case of PicoBrew and many other great (and not-so great) innovative products, they are dead. Addiction towards innovations and churning out new products does not translate to business success.
- It’s still the same framework for growth: Physical Availability and Mental Availability. The Laws of Growth as introduced by the Ehrenberg-Bass Institute can be used to guide us here. Precious capital is often spent on producing more models to appease crowdfunding enthusiasts, when it should’ve been spent to advertise across the millions of potential buyers and enable buyers to purchase easily. Product or brand superiority matters little if nobody knows about you and nobody can get hold of you.
Businesses operating in innovative products should not try to emulate Apple, Samsung, or Dyson for their practice to introduce new releases every year. What they should follow is what Apple did in 2002. iPod’s success is not solely due to its design or innovation, but it’s due to Steve Job’s brilliance in ensuring that the iPods were sold in Bestbuy and Target, and not just in specialised gadget or computer stores. Companies like Apple or Samsung can churn out new products because they have the necessary infrastructure ready and in place.
Launching is the easy and exciting part – but at the end of the day, mundane activities like continuous advertising and securing distribution is what keeps the product alive.