Monday, September 30, 2013

Should I Use Kickstarter for My Invention?

Dear Rich: My co-inventor and I need money to finish prototyping our invention. Is there any drawback to using to finance the invention's development? Kickstarter has some impressive stats and many inventors have used Kickstarter to launch their inventions. Thomas Smafield of Chicago raised $16,000 to manufacture his circular bike tool invention (named Repair Rebel); inventors of the CloudFTP device (that lets you wirelessly share any USB storage with iPad and iPhone) raised over $260,000; and the people who created the Ouya game console raised $8.5 million from 63,416 backers.
Drawbacks. But along with success stories, there are drawbacks, the most notable of which are that 56% of projects don't fund (Kickstarter is an all-or-nothing enterprise and if you don't achieve your goal, you don't get any money) and 75% of Kickstarter projects don't deliver on time (making for many unhappy patrons). In addition, a successful Kickstarter project does not mean you have created a commercial product. Kickstarter's co-founder Yancey Strickler told Reuters, “Of all the products launched on Kickstarter, very, very few would be a good investment. ... However, if the bar is lower—to simply, do I want this to exist?—suddenly over half the things have a life.”
Disclosure. Another concern is disclosure. If you have a potentially patentable invention and disclose the patentable features before you file, you may find it impossible to obtain a patent. With a rare exception, public disclosure prior to filing under the new patent law, will kill patent chances. Even if you are not patenting your innovation, you are making it publicly known which may encourage imitators ... something you may not be ready for just yet.
Manufacturing v. Licensing. Finally, inventors usually must decide whether they will manufacture the invention themselves (a risky and expensive route made slightly less risky by Kickstarter), or seek a license from a manufacturer (less revenue but also much less hassle). Kickstarter, with its crowdsourcing funding, makes that decision for you and converts you into a manufacturer.

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