One of the first decisions you'll ever have to make when setting up your first (and later) Kickstarter campaigns, is to decide how much money you're actually going to ask for.
It can be a scary thought. With Kickstarter you either make your goal, or you get nothing at all, so setting it too high is dangerous. Many projects see funding slow down significantly as soon as they hit their funding goal, so you also don't want to set it too low. So how do you find the magic number that makes sure you get the funding you really need?
There are a bunch of ways to go about this, many of which you'll see us go into more detail in the Kickstarter Success System. The main principal though is to consider your potential pricepoints against each of the basic criteria, and see which one, overall, fits all of them best. What are these criteria? Let's go over them:
All the Way, or Piece by Piece?
Think you'll need more time to build up enough of a following to fund your full project? Consider doing a Kickstarter campaign for just one step in your overall plan.
For example, if you have no history and you need a million dollars to make the film you've been dreaming of, consider aiming to fund getting your script finished first. After that, you can come back for another round of Kickstarter, showing that you can successfully get a Kickstarter campaign funded, and that you delivered (or hopefully overdelivered) to funders last time around.
This is a powerful incentive for people to back you, and second time around you also have the support of your last backers spreading the word, building a snowball effect.
What Will Your Costs Be...Really?
First, the obvious. Figure out what it's going to cost to produce the goal of your project and it's rewards. Yes, actually call / email around and get quotes and prices.
Err on the high side, because no matter how hard you try you're going to forget a bunch of seemingly “minor” things, which will all add up. Make sure you leave extra padding for those unexpected costs like needing to use a more expensive provider if needed.
The Silent Killers of Underfunded Projects
Ah yes. The T word. Taxes. Remember, one way or another you're going to have to account (literally) for the money your campaign brings in.
If you need $10,000 to build your product, don't ask for $10,000.
If you do, you'll find yourself considerably short by the time Kickstarters fees (5%), Amazon payment's fees (3-5%), taxes and the production of physical rewards and shipping are done (although you can ask for people to donate extra for shipping).
Look at the Stats
Certain price points are sweet spots, and Kickstarter fairly regularly puts out statistics on what makes projects tick. Their last word on this topic, was that between $5,000 and $10,000 is the most commonly funded bracket, overall. This seems to be rising, over time, however.
Obviously this doesn't mean that everyone should ask in this range. It gives you an idea though, that the average kind of goal you see on Kickstarter gets about this. There are plenty getting more and less. This is just the average.
It is worth noting though, that generally speaking, the higher the goal you ask for, the more you're going to have to show people to convince them you can do it.
Compare to Other Kickstarter Projects
Take a look at other projects that are in similar areas to where your project will be launching. What kind of prices are they asking for?
Now, the point here is not to say that you should ask the same. If you look at the other projects and hardly any of them are getting funded, especially if their marketing overall looks good, then you may need to consider asking for less.
If people are launching extremely poor looking projects and getting funded 90% of the time, then it's time to think about asking for more.
Either way, list out everything they're offering, and everything they did to promote their project, look at whether you are realistically going to be delivering more or less, and adjust accordingly. Look at how far above / below 50% of those projects are getting funded and adjust for that again.
Avoid the temptation to ask for less than you need, because it makes you look like you don't know what you're doing, and nothing destroys a campaign and goodwill more than not being able to deliver on your promises.
By the way, if you want to see some really interesting stats on projects, and can resist the temptation to waste most of your time looking at them, you might want to check out Kicktraq.com, which collects and publishes data on various projects whenever you visit their project page.
Compare to the Rest of the Marketplace
Also remember that your competition, is not just other projects on Kickstarter. Just because there's no other fart or flashlight app on Kickstarter, doesn't mean yours would be destined for greatness at any price. The market's flooded elsewhere already.
In the days of social sharing and price comparison search engines, what people expect to pay is based on what can be found online by the average person looking and what they expect it would cost to create.
If you haven't actually gone through these steps yet (including if you've read, but not done them) this could feel a bit overwhelming. What you'll find though is that actually doing each one, will immerse you in what the actual numbers and trends are today. When you have a feel for that, picking your actual price is fairly simple. If in doubt though, go for the upper end. You can always come back and run another Kickstarter campaign if you need to. Living down not being able to deliver on a funded goal, is much harder.
So this is a good place to start, when deciding your Kickstarter funding goal. Got another great tip for how you set your funding goal? We'd love to hear it in the comments below.