Kickstarter released its Q1 2014 stats on 2 April. Let’s look specifically at the backer numbers, as split into:
- first time backers, which is a backer supporting one project;
- repeat backers, which is a backer supporting two or more projects.
In Q1 2014, there were a total of 887,848 backers, of which 679,413 were new backers supporting project creators.
This means that a staggering 76% were first time backers on Kickstarter. The Q1 2014 first time backers number is also approximately 29% higher compared to Q1 2013 using the average estimated number per quarter (see below for calculations).
This clearly shows that there is a curiosity and appetite from ordinary consumers to be part of crowdfunding.
But, given that only 24% are repeat backers, it would be worthwhile to understand why there is such a low number of repeat backers, as well as how to encourage backers to repeat pledging.
Compared to the average estimated 222k repeat backers per quarter in 2013, the Q1 2014 number is 6% lower. There could be a number of considerations that contribute to low repeat pledges, such as budget, backer fatigue, and past crowdfunding experience.
I speculate that a large proportion of the repeat backers fall into the Games category.
The Games category is the highest successfully funded category and highest total dollar value category on Kickstarter (source: Kickstarter stats). It is also in gamers’ personality to be a repeat backer or even a mega-backer, namely wanting to own as many games as possible and paying premium rates for high quality games.
Five key observations
Comparing these numbers to the five-year stats (see below for calculations), there are five key observations:
1) There has been an exponential increase in the number of backers using Kickstarter over the last five years.
Additionally, the number of new backers increasing faster compared to repeat backers. Using the simple per quarter average estimate over the 5 years, the current number of new backers are 3.3x the average, and the current number of repeat backers at 2.3x the average.
2) There are more repeat backers over the last two years compared to the first two years of Kickstarter.
This indicates that there is higher acceptance of crowdfunding and that the crowdfunding process stabilised. This is implied as from the low average of repeat backers over 5 years compared to the recent high per quarter number for backers.
3) Of the total number of new backers, there is a lower conversion of first time backers to repeat backers, or in other words, a higher bounce rate of first time backers.
This bounce rate could be due to certain projects attracting one time backers only, for example the Pebble Watch. This could also be due to any experiences first timers have with the project creator, or whether they are risk averse, or even adopting wait-and-see attitude before pledging more (namely waiting for the first project creator to deliver before supporting another project).
4) Even though repeat backers are only 24% of the backers population on Kickstarter in Q1, repeat backers pledge more compared to the 76% of first time backers. Approximately 63% of pledges come from repeat backers.
But, the total higher amount pledged is not indicative of the pledge per backer. For example, repeat backers could pledge an average $5 on five projects, and a first time backer could pledge $20 on one project. The repeat backer pledged more overall, but the first time backer has a greater risk/reward profile.
As I mention above, I think repeat backers are predominately active in the Games category, and hence pledging more wouldn’t be surprising. Another insight is that maybe competitor project creators are pledging at the lowest level on multiple projects in one category. The reason for this is to keep tabs on what your competitors are doing with their projects.
5) Given how much repeat backer pledge, and with the proliferation of online platforms, it becomes more and more important to retain backers and encourage repeat pledging.
Online platforms still cater predominantly to project creators but I anticipate within the next couple of years, the online platforms will start to shift their focus from project creators to repeat backers. This doesn’t mean that project creators are secondary; on the contrary, it means that online platforms will target repeat backers more and understand their interests, and then create strategies to engage these backers more.
Noise in the data
The statistics from Kickstarter help to gain greater clarity and transparency on backers, but there is some noise in the data.
Multiple profiles for one backer
Backers may create multiple profiles on Kickstarter to get multiple copies of rewards.
This occurs due to the lack of reward levels that offer multiple copies of the product, or, as per Kickstarter policy, being limited to 10 copies of a rewards per backer. As a backer, I have also been asked by project creators to create multiple profiles on Kickstarter instead of increasing my existing pledge on a reward level to get multiple copies of the reward.
Accordingly, it may end up that one backer has two or more profiles. For one profile, the backer is classified as a repeat backer, and for another profile, the backer would be classified as a first time backer.
Understanding Kickstarter’s definitions for backers
It is not clear to me if repeat backers are backers who backed more than 1 project in the same quarter or in total since creating their profile.
How repeat backers is defined adds a subtle nuance to interpreting and understanding repeat backers’ behaviourisms. For example, I could have backed a project in Q4 2013 and then again only in Q1 2014 but someone else may have backed multiple projects in Q1 2014 only. The subtlety is the longevity of being a backer, and I think this should be included in the repeat backer stats. If I demonstrate long-term interest and commitment to crowdfunding, then my overall contribution to the crowdfunding ecosystem is deeper compared to a repeat backer who only interacts with the crowdfunding community for a short-time. An analogy from the retailers / high street is loyalty programmes, and the depth of information contained in such a programme.
It is also not clear to me where the line is drawn between first time and repeat backers. For example, I registered with Kickstarter in February 2014, and backed my first project in February. By March 2014, I backed +24 projects. Does this make me a first timer, or repeat backer in Q1 2014?
Cancelled pledges or unsuccessful campaigns
I assume that Kickstarter is counting all backer numbers regardless of whether the crowdfunding campaigns are successful or not. It would be interesting to see the break-down of backers per project status. My null hypothesis is that there would be a higher proportion of repeat backers in unsuccessful projects. I pose this hypothesis for two reasons: repeat backers would be more willing to be one of the first supporters for a project, and first timers would most likely use the actions of repeat backers as indicators when deciding whether to pledge.
Kickstarter may also be totaling the backer numbers before adjusting for any cancelled pledges. It would also be interesting to see how many first-time backers and repeat backers actually cancel their pledges, and what the cancellation reasons are.
Dormant backer profiles
Even though a first time backer is defined as supporting one project, another interpretation could be whether a user creates a new profile with Kickstarter. If the definition of first time backers includes new profile registrations, then the number of first time backers should be adjusted for dormant profiles.
A dormant profile is when a user creates a backer profile on Kickstarter but don’t pledge for any rewards offered in any project. It would be interesting to understand if there are dormant profiles and why the users don’t pledge.
Calculations and Notes
The abbreviation M is for million, so 3M is 3,000,000.
The abbreviation k is for hundred thousand, so 807k is 807,000.
The abbreviation Q is for quarter, so Q1 is the first quarter of the year, namely January, February and March. Q4 is the last quarter of the year, namely October, November and December.
The abbreviation x is times or multiple, so 3x is three times a value.
Numbers as from Kickstarter’s website.
Total 3M backers, broken down as follows:
- 807k backing more than 1 project
- 81k backing more than 10 projects
- 975 backed more than 100 projects
This calculates as 2.1M backers backing 1 project only. That is a simple per quarter average number of 527k new backers (2.1M/4).
On average, there is 222k of repeat backers per quarter ((807k+81k+975k))/4).
5 year stats
Numbers as from Kickstarter stats page.
Total number of backers over 5 years is 5,921,459.
Repeat backers over 5 years is 1,757,974. Per quarter average over the 5 years is 87,899 calculated as (1,757k/(5*4)). Repeat backers account for 30% of the total backer pool over the last five years.
Accordingly, this calculates to 4,163,485 first time backers and the per quarter average over 5 years is 208k, calculated as (4.6m/(5*4)). First time backers account for 70% of the total backer pool over the last five years.