How NOT to Get Stretched by Kickstarter Stretch Goals
From the mailbag:
Hey Tyler, I just wanted to say that you’re Kickstarter articles have been an invaluable resource as I ever-so-slowly plot out my campaign. I have a question concerning stretch goals in particular and can’t seem to find anything on the issue I’m facing. I have a 3-issue mini that I’m looking to Kickstart. The cost to me as the creator is somewhere between 2.5k – 3k per, so to get all 3 issues paid for I’m basically looking at a 10k goal. My preference is to keep the goal around 3k, mostly b/c it’s my first campaign, but also to increase the chance of at least walking away with a funded first issue. So, my idea was to make issues 2 and 3 available as Stretch Goals, unlockable at 6k and 9k, respectively. My conundrum is how to best implement the 2nd/3rd issues into the reward tiers. Unless I smash my goal there’s no way I could give the issues away for free, but having backed my fair share of campaigns, I’m very turned off at the prospect of having to ask Backers to contribute additional money to receive the unlocked issues.
-Scott
Having recently wrapped up another successful Kickstarter campaign in the last few weeks (note, I said “campaign” not project…a project isn’t complete or a success until all your backers are happy), I’ve been getting a fair number of new crowdfunding related questions from people like Scott. His question above, focused specifically on stretch goals, is a good one. And though I shared some insight in my most recent Kickstarter article on the subject, I think stretch goals is a topic certainly worth a deep dive.
The two things that are most likely to completely @#$! up otherwise excellent Kickstarters are:
1. Improperly accounting for the cost of international shipping.
2. Poorly planned stretch goals.
And while ignorance of the high cost of international shipping is the mistake that is the most common and the most talked about (See: DIY Crowdfunding Fulfillment Part II – Ship Like a Boss), it’s often those run-away stretch goals that cause shipping costs to explode wildly out of control.
Stretch goals, like the Kickstarter platform itself, are a powerful tool. They helped “solve” the problem of a loss of campaign momentum once the funding milestone has been reached. But like any powerful tool, stretch goals can really hurt you if you don’t use them appropriately.
Let’s Look at Scott’s Situation…
I don’t know a lot about Scott or his creative history. I don’t know much about his project, its quality, or the marketability of his concept. I don’t know about the size of his personal or professional platform, how many Twitter followers he has, friends on Facebook, etc. In short, I really don’t know how tough a time he’s going to have to raise that $3K goal for his series.
The benefit of not knowing all that much about Scott’s situation is that it lets me look at his project very clinically. First, statistically, he’s much better off shooting for that $3K goal than going after the full $10K, as 60% of all successful comics Kickstarters are funded in the $1,000 to $9,999 range.
I do know that this is Scott’s first KS, and for that reason alone, I recommend he keeps his campaign smaller and simpler. As Wes Locher found out, funding the creation costs AND printing costs for an entire multi-issue mini-series, without a large existing fanbase, is a whole lot harder than funding the first issue.
So, the smart play for Scott is to tighten up his campaign and focus on funding only the first issue.
But what if he’s successful? What if he hits his $3K goal on Day one? If he can raise another $3K, that’ll cover issue #2. Why not make that a stretch goal?
There are a number of great reasons why adding subsequent issues as stretch goals in the scenario laid out above is an AWFUL idea. Here are some rules of thumb when thinking about stretch goals:
1) Avoid Stretch Goals That Significantly Extend Fulfillment Time
When you set up your Kickstarter project, you’ll need to put an estimated fulfillment date for when backers can expect to receive that pledge level. Right now, there are absolutely no enforcement mechanisms set up to ensure these dates are hit. Estimates suggest some 60% of successful Kickstarters are late with their fulfillment dates. If you think about it, the amount of consumer dollars being spent to receive late products on Kickstarter is staggering…and that reservoir of patience is probably not inexhaustible. Once your campaign has begun and you’ve accepted backers for pledge levels, you can’t go and change the projected fulfillment date after the fact. So, you should make sure that the stretch goals you’re offering aren’t going to significantly delay your fulfillment.
Look at Scott’s idea, to make issue #2 and #3 available for backers should he hit the $6K and $9K funding milestones. The big question here is WHEN would would those issues realistically be ready? Since Scott’s Kickstarter is trying to fund CREATION COSTS (art, color, lettering, etc.) and PRODUCTION COSTS (printing, packing, shipping, etc.) it’s conceivable that three-times as big a project would take three-times as long to deliver. And while SOME backers would surely be fine with that, it’s not what MOST backers signed on for.
If Scott’s production schedule is par for the course of most indie comics, it could take him six months to a year to make each issue. That means it could be 2-3 years before he fully fulfilled his KS commitments, thanks to those stretch goals. As anyone who’s done a Kickstarter will tell you, the money simply doesn’t last that long.
2) Avoid Stretch Goals That Significantly Increase the Cost of the Project
Most Kickstarters who meet their funding goal do a great job planning their initial Kickstarter offering. They’ve read up a ton of articles (like the great ones here on ComixTribe), they’ve created their own spreadsheets, and figured out their campaign costs to the very penny. But once the pledges start coming in, ESPECIALLY if the campaign is doing better than anticipated, it’s surprisingly easy to throw the math out the window cause “you’re feelin’ rich, bitch!”
Right now, Kickstarter doesn’t provide any useful tools for accurately tracking total costs, and actual profit for live campaigns…that’s all on you. However, I’ve been working on a tool, which I used during the EPIC campaign to keep track of numbers in “real time.” It’s still in development, but I figured now’s as good a time as any to share a version:
Access Tyler’s Kickstarter Profit Calculator (Shareable) Beta
Now, the above tool is very low-tech. It’s a Google Spreadsheet that you can view, and then make a copy for your own purposes, if it looks like something you can use. But the biggest thing I want to stress is that, before you toss out stretch goals during a campaign, you should have a true estimate of how much profit (if any) current funding levels will actually leave you with.
Let’s again look at Scott’s example. He’s telling me his costs to make the project happen are $2.5-3K. Let’s say $2.5K gets him his creation costs, printing, and shipping. That would mean hitting his $3K goal would leave him with about $2,667 in funds, after Kickstarter/Amazon fees and Backer attrition (Backers whose payments don’t end up going through…it happens.) So, after all is said and done, this Kickstarter would net him $167 in profit. (Of course, that’s assuming that any other merchandise used as perks (prints, stickers, posters, buttons, etc.) were also paid for. It’s very possible that this Kickstarter would be a net loss at his goal funding level, all things considered.
The biggest problem I have with Scott’s suggestion of offering #2 & #3 as stretch goals is that there are no economies of scale at play there. If Scott’s Kickstarter raises double the amount he’s looking for, it will suddenly also become twice as expensive to fulfill. If he raises triple the amount, it becomes three times as expensive. It also makes it three times as risky that a small miscalculation, or something going wrong in fulfillment will become a major problem down the line.
3. Avoid Stretch Goals That Explode Your Shipping Costs
Shipping will be one of your biggest expenses when conducting a Kickstarter campaign. On average, nearly 25% of your project goal will go towards packaging and shipping your products, assuming you’re offering physical goods and shipping them world-wide. Because of this, you want to make sure whatever stretch goals you offer don’t blow your shipping costs out of the water.
My biggest question for Scott is how he would handle delivering those extra issue stretch goals? Really, he has two bad options:
A) He could ship three times, one for each issue. This has the benefit of allowing him to hit his original target shipping date for issue #1, and then ship #2 and #3 as they are finished. However, that’s also three times the packaging materials, three times the postage cost, three times shipping & handling processing time, three times the chance that a package gets lost and has to be replaced, three times the trips to the post office… It’s a lot of work. And if he isn’t going to charge backers for that extra time and cost, he could be in a situation where he’s spending more on shipping their items than some backer’s pledged in the first place.
B) The other option is to instead wait until all three books are complete, and ship them to backers together in one shipment. This saves on packaging costs and time, and the cost to ship three books together is significantly less than shipping three books individually. But now, instead of fulfillment being 6 months away, it might be a year or two before Backers get anything. That’s a LONG time to wait for comics.
Another thing I see is stretch goals offered that seriously bump up the cost of shipping do to their form factors. For example, giving everyone an 11 x 17 print as a stretch goal incentive can seem like a good one. After all, prints are relatively inexpensive (a buck or less) and have a high perceived consumer value ($10 or more.) But the packaging needed for an 11 x 17 print is entirely different than the ideal packaging for your floppy comic book. So, again, you have a situation where this stretch goal is going to wreck your well-planned campaign, and possible spin your shipping costs out of control.
4. Avoid Stretch Goals That Hurt Future Sales Prospects
I get it. Doing one Kickstarter campaign and funding the whole shebang is far more appealing than having to do a number of Kickstarters to fund a mini-series. But the risks of doing a BIG Kickstarter, might outweigh the rewards.
Statistics are a great thing. Remember, YOU probably aren’t an outlier. You’re probably not going to raise more than $10K on your Kickstarter, and the higher that initial goal, the more likely you’ll find yourself lumped in with the 51% of comic book Kickstarter projects that fail.
Far better to set an attainable first issue goal, then deliver a great product to backers in a timely fashion, than to set an audacious goal, signing yourself up for the stress of fulfillment stretched over multiple years.
Making more assumptions about Scott’s comic, if he’s like most indie creators, he doesn’t have distribution deals set up for his book. Kickstarter will likely be his main distribution channel for selling his comic, followed by conventions sales and maybe some additional sales through his website after the fact. But the bulk of his sales are going to come through the Kickstarter campaign.
Let’s say he achieved his super stretch goal…he raises $9K in 30 days to produce all three issues. How many backers is that going to take? Considering the average pledge on Kickstarter is around $30, you could estimate Scott’s campaign will reach 300 backers. Not bad…but really not all that many people in the long run.
By rolling all three issues into one campaign, Scott’s probably leaving money and backers on the table. If instead, he focused on a campaign for just #1, and did a great job fulfilling it, he’ll then be in great shape to Kickstart issue #2. That second issue campaign will actually be primed to do even better than the first, because he’ll start with a base of happy issue #1 backers, and he’s also have issue #1 to sell to along with #2 to all the people who who missed the first Kickstarter. Joe Martino‘s Mighty Titan series has shown that crowdfunding a serial comic is possible. And while every backer might not come back for each issue, by running a series of campaigns for his books, he’s bringing new backers to the series with each campaign, and keeping the buzz of his series going over multiple months.
Kickstarter is his main distribution platform. Will it be yours, too? If so, a series of smaller Kickstarters is probably better than one big one.
So, What Are Good Stretch Goals?
It’s a lot easier to poke holes in poor stretch goals than it is to point out good ones, I suppose. If you’re stretch goal meets the above four point criteria of 1.) Not significantly extending fulfillment, 2.) Not significantly increasing the cost, 3.) Not exploding shipping, and 4.) Not hurting future sales prospects, it’s probably a good one. Here are some examples:
1. Digital, Digital, Digital – The marginal cost of adding a digital reward as a stretch goal is zero. Often the only cost at all is the time to pull this reward together. While the perceived value on digital rewards is lower than that of physical rewards, they make great bonuses. For example, in the EPIC campaign, upon hitting 200 Backers, I shared a digital download with 100+ pages of ComixTribe content with all backers. That’s more unexpected bonus comics for backers, without pulling funds from campaign to deliver them.
2. Product Enhancements – One of the most attractive options for stretch goals for both the creator and backers is to make the core product itself better upon hitting funding milestones. When you’re doing an off-set print run of a floppy comic, you’re basically dropping $1,000 upfront for press set up and run-time. But enhancements you make to your book, on a per unit basement, are relatively inexpensive compared to that initial $1K hit.
Five Ways to Enhance Your Floppy as Stretch Goals
I. Improve the paper stock – Only adds a few cents per book, but increase its quality and presentation.
II. Improve the cover stock – Only adds a few cents per book, but increases durability, quality, and presentation.
III. Add pages – (Note: The cost increase of an off-set book is quite negligible between 24-32 interior pages. There’s a big jump from 32 to 36 pages, but then a smaller incremental jump between page counts from 36 to 64 pages. Use that knowledge to your advantage.)
IV. Offer a variant cover – Most companies charge a fee for variants covers, but when spread over total printing cost, variants only add a dime or so per book printing.
V. Foil-embossing/ Foil Stamping / UV Coating – An off-set printer will have a wealth of special printing extra’s they can do that are relatively inexpensive on a per unit basis. Comic readers from the 90s like me have a love hate relationship with these “enhanced covers.” We love them because they’re shiny and cool and unique…we hate them because publishers traditionally jacked the cover price up on them. But if you can offer these upgrades at no extra cost to backers, they make a great stretch goal incentive.
The other great thing about these product enhancements is that they make any over print of the product you might do all that more attractive, and easier to sell after the fact. Win for backers, and a win for you!
3. Add-Ons That Fit With Your Current Shipping Configuration – Throwing extras in with your book that A) fit in your current packaging, B) Don’t add a ton of weight to the package, and C) Are marginally inexpensive, make for great stretch goals. The one word of caution is if your were planning on using Media Mail USPS shipping rates, technically, these add-ons violate the terms of that service, which is for books only.
Five Great Add-Ons That Make Great Stretch Goals
I. Signed Postcards – (I love the work the crew at GotPrint.com does.)
II. Mini-Prints – Remember, I hate the 11×17 prints as a stretch goal because they require changing up your packaging. But smaller mini-prints in the 8.5×11 range will fit in the same packaging as your floppy, and are relatively inexpensive, are great.
III. Bookmarks – I love GotPrint.com‘s double-sided full-color bookmarks. They’re inexpensive, yet professional looking, and light weight.
IV. Stickers – I recommend the fine folks at Sticker Mule to print premium, easy to peel off stickers. (BTW, if you’re planning a Kickstarter, check them out. Follow the link here, and you’ll get a $10 credit to Sticker Mule and so will I! Win-Win! Just follow this link and snag that $10 spot!)
V. Buttons – I recommend Purebuttons.com, but there are plenty of good button vendors out there, and I know some creators who have invested in their own button making kits to make them at home.
4. Super Creative Things Only YOU Could Think Of – I think it’s also important to point out that some of the power of Kickstarter is in using the platform to express your own individuality. Yes, there are plenty of things you can copy from successful campaigns, but the great Kickstarter campaigns take on a life of their own and the identity of their creators. So, stretch goals don’t always have to be things…but they should be fun, and they should be representative of you. Maybe at $5K you’ll grow a mustache or at $10K shave your head. Maybe at 300 backers you’ll video tape yourself doing your best Rocky Balboa celebratory stair climb. Sing a song. Do a dance. Have fun. These sort of goals will probably be more memorable than an extra postcard…and memorable is a good thing.
But Please…Don’t Put the Cart Before the Horse!
My biggest Kickstarter pet peeve is going to a project page on Day One, with 1% funding and thousands of dollars to go to hit their initial goal, and seeing a dozen stretch goals for wild sums of money. Sorry, you’re doing it wrong.
Remember, you can edit your project page all throughout the campaign…and you SHOULD. Good Kickstarter campaigners do not set their campaign page on Day 1 and forget it…they treat it as an evolving message delivery system.
At the start of your campaign, rather than focusing on stretch goals, instead focus on milestone rewards…what totally awesome, unexpected thing are you going to do for backers when you hit 20% funding? 50%? 75%? 90%?
Don’t even mention stretch goals until you hit your funding…and take nothing for granted. Until you actually hit that goal (remember 51% of all comics Kickstarters NEVER do)…don’t focus on stretch goals. Instead, focus on delighting the backers who have already climbed on board your campaign.
So, that would be my advice to Scott, and to all of you considering a Kickstarter campaign.
Sharing the Knowledge
I really appreciate the kind words about these Kickstarter articles and am happy that they’ve helped many of you when planning your campaigns. My wife teases me sometimes that I “shouldn’t be giving away all my secrets.”
But the truth is, as someone who recognizes the game changing nature and true asset of the Kickstarter platform, it’s 100% in my benefit to share this knowledge and insight with as many creators as possible. I want YOU all to succeed…and not just because I’m a nice guy.
The more excellently run, incredibly well-executed Kickstarters there are, the stronger the platform becomes for everyone. Conversely, poorly run Kickstarters hurt the platform for everyone.
I’d love for Kickstarter to be a robust tool available to creators for many years to come. You and I have a duty to take good care of that platform. And to the extent that you think this article will help steer creators in the right direction with their campaigns, I encourage you to share it.
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Keep Reading!
If you found this article useful, you may want to read one of these three articles next:
The Kickstarter Laboratory: 7 Experiments in Crowdfunding a Floppy
DIY Crowdfunding Fulfillment Part I – What To Do BEFORE You Launch?
DIY Crowdfunding Fulfillment Part II – Ship Like a Boss
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