Crowdfunding website Kickstarter is available to entrepreneurs living in New Zealand for the first time today, but its launch could destroy a local kiwi business.
The wildly popular website is famous for helping creatives fund their projects and has drawn some big names over the years.
It works a bit like traditional fundraising, but with a few tweaks here and there: hopefuls outline their project on the website, sharing their dream and setting the amount of money they need to make it happen.
Donors can then pledge funds to support the project, often in exchange for a reward, but developers are held to a deadline – most projects have around a month to pull in the funds they set.
If they can't reach their goal in time, the deal is off and pledges are returned.
The concept has exploded across the world and Kickstarter is at the forefront, funding some record-breaking projects – almost $6 million for a film, $8 million for a new gaming console and even $1.5 million for a photo-friendly space telescope.
But, until today, Kiwis could only launch products if they lived in the United States.
Nelson entrepreneur Galen King is one of the first Kiwis to sign up, and in a project launched this morning, is looking for $3600 to fund a new line of creative notebooks called 'Workbooks'.
"It's fair to say that I'm a pretty big fan of Kickstarter, I think it's an exciting platform for anyone developing an indie project," he says.
"I'm hoping it will give me a worldwide audience for this little project we've been working on."
Mr King says the major advantage of Kickstarter, as opposed to local crowdfunding companies, is the enormous international audience.
"This is one of the global platforms that is really exciting to see coming to New Zealand, because it has such a wide reach and exposure," he says. "It will give people launching projects the worldwide exposure you just can't get with the local ones."
Kickstarter's launch could spell serious trouble for local crowdfunding company PledgeMe.
The fledging startup, which now has eight part-time staff, has been doing the groundwork in New Zealand for years and has seen some success with community projects – the largest bringing in $206,000.
CEO Anna Guenther says she's excited about the launch of Kickstarter, but admits she's apprehensive about the introduction of such a high-profile competitor.
"It's definitely the most serious competition we've had so far," she says. "But I think, in a way, it's good for us as well because it's pushing us harder to do different things.
"I'm just a little concerned that people don't realise they have to bring their crowd with them - it's not just putting your project out there into the ether - there's a lot of work brining in people."
Mr King, a serial entrepreneur, isn't optimistic about the company's chances against such a strong brand.
"Maybe it won't see a drop but I think it will certainly stifle their growth," he says. "I hope it doesn't, I hope there's room in New Zealand for some more.
"I wish it was not my gut feeling. I really want to see these businesses succeed, but I think this is one case where Kickstarter has such a global movement and people generally love it."
Ms Guenther is encouraging Kiwis to stay local, fund local projects and support PledgeMe.
"I think they're never going to have the focus that we do on New Zealand, it's always going to be diluted to a point," she says.
"I think it's a very different offering. New Zealand isn't really a focus for them, they're not going to have anyone based here and they're not going to do any special marketing or promotions here.
"They said they're not going to get into the community space, they still want to focus on creative projects."
However the CEO admits some projects – large creative and entrepreneurial ventures – could be best suited to a global audience.
"There are some projects were it would be useful to go on an international site, if you think you will be able to access their community for product space and you know people on there will really like it," she says.
"[But] really, if it's a local thing it makes sense to potentially look a local site that builds community offline as well as online, where you can go to workshops, where's there's education."
source: newshub archive