Largest-ever Kickstarter study finds one in 10 projects fail

While it’s easy for a consumer to forget that it’s not an e-commerce site, Kickstarter isn’t posing as one, and when backers never get their gizmos the problem probably isn’t fraud but business problems.

Campaigns that were pledged between $10,000 and $15,000 were the most likely to produce the product they originally set out to, seeing the lowest delivery failure rate – approximately seven per cent.

Ethan Mollick, a scholar from the Wharton School of the University of Pennsylvania helped to co-published an independent report, surveying 500,00 backers.

Project backers should expect a failure rate of around 1-in-10 projects, and to receive a refund 13% of the time…

“Is a 9% failure rate reasonable for a community of people trying to bring creative projects to life?” But even if a Kickstarter project meets its funding goal, there’s still a chance it won’t work out. The study classifies failure if the backers didn’t get the things they were promised, for instance you backed a Power Bank project and were promised a power bank once it hits production, but due to some issues you didn’t get the product. “We think so, but we also understand that the risk of failure may deter some people from participating”, Kickstarter said.

In his study, Mollick surveyed 47,188 backers of Kickstarter projects and attempted to find any unifying features of campaigns that were unable to deliver their rewards.

Failing to deliver backer rewards can result in more than a few hundred (or thousand) angry donors. The new report we are talking about has some interesting tidbits which sheds light on the status of the projects and the money pledged across different categories.

Mollick urged creators to plan for ways in which to work with backers should a project ultimately fail. “It may be that film or technology products are aiming for more breakthrough products or are offering more complicated rewards (a completed movie or gadget, rather than a band t-shirt), and are thus at a higher risk of failure”, says Mollick. The number of campaigns studied came to more than 30,000.

There are countless campaigns that launch on the crowdfunding site Kickstarter every day.