What 10,000 Kickstarter projects reveal about Canada's entrepreneurs
6 years of crowdfunding data sheds light on creative trends in cities large and small
In the last six years, Canadians took nearly 10,000 shots at glory on crowdfunding site Kickstarter.
Only about a third succeeded.
But what are these projects? Which are the most successful? Are there big differences between the creative economies of every city?
Crowdfunding sites like Kickstarter, Indiegogo and FundRazr have changed how creative entrepreneurs fund their passions. No longer confined to traditional sources like banks and venture capital, anyone can get money for an idea provided they inspire enough people to cough up cash.
These sites enable people to donate money to fund a project, usually in return for a reward — for example, early access to a new product, a T-shirt or dinner with the creators. The more one gives, the juicier the reward.
The CBC looked at six years of Kickstarter projects with data provided by Web Robots and HiveWire, two firms that track crowdfunding sites. Only Kickstarter data was used, since it has the largest and most representative sample of Canadian crowdfunding projects.
Here's a breakdown of all projects for each city. You can size the bubbles by number of backers or total money raised.
More than half of all Canadian Kickstarter projects are concentrated in the three biggest cities.
It's generally known that Montreal is a hotbed of video game development, while Vancouver has a rich film scene. These are known industry facts, and the Kickstarter data confirms that bootstrapping creators in these cities also operate in these areas.
But some cities seem to flout stereotypes. Halifax, better known for its music, has more game-related projects than other categories.
Equal parts preparation and perspiration
Not all Kickstarter campaigns have the same shot at success. If you want good odds of making it, try funding a play or a comic book. These have the highest success rates: 60 per cent of these types of projects reached their funding goals.
But if you want to fund a tech idea, the cards are strongly stacked against you. Of all the Canadian tech projects on Kickstarter, only about 20 per cent got the money they asked for, making it the toughest category.
And if you don't reach your goal on Kickstarter, you don't see a cent of what users pledged.
SmartHalo, a multipurpose attachment for bikes, is an anomaly. Not only did the project reach its Kickstarter goal, it did it in 15 hours, and is one of the most successful recent projects based in Montreal.
It had a fundraising goal of $67,000. It raised nearly $540,000.
"Early adopters of technology know that's where innovation happens, on Kickstarter," said Xavier Peich, the business director of SmartHalo. "Getting something that no one else has, it's a compelling offer."
The gadget, which fits on the handlebars, offers simple turn-by-turn navigation, lights, an alarm and a fitness counter.
Despite their high failure rates, tech projects get some of the most generous individual pledges, on average $120 per backer — just under art projects, which get $126.
Overall, the average pledge in Canada is $87.
Peich credits the success of SmartHalo to being over-prepared. His team worked on a prototype for one year before promoting it on Kickstarter. Having a slick video also helped.
This feeling is echoed by other successful entrepreneurs. Montreal a capella quartet QW4RTZ spent six years building their fan base with live shows before going to Kickstarter to fund their first album.
"We already had a good exposure. It's what led us to consider crowdfunding as an option," said François Dubé, one of the group's members.
Music projects have a bigger chance of succeeding on Kickstarter, but it's still tough: 47 per cent made it.
Successful campaigns have modest goals
Just as preparation is a predictor of success, so is modesty. Kickstarter campaigns that fail tend to have much higher goals than those that succeed. QW4RTZ asked for $15,000 (and got just over $17,000). Most successful projects ask for less than $10,000.
"In Quebec's cultural sector, the probability of seeing a project like this succeed is infinitesimal," he said. "You have to go in with realistic goals."
Compulsion Games, an independent video game studio in Montreal, asked Kickstarter for $250,000 to develop a new game. It's the project with the highest goal that succeeded: it raised $335,000.
For this project, Kickstarter provided only a fraction of the money. The studio had also raised $1 million from the Canadian Media Fund. In this case, Kickstarter was a test ground to see if the game was commercially viable.
"The real secret is that a successful Kickstarter project makes it easier to get more investment," said Guillaume Provost of Compulsion Games. "You can showcase commercial success early on. It opens all kinds of doors with great partners."
It also spurred the company to expand their vision for the game and hire more staff to develop it further.
"If the Kickstarter campaign was not successful, we would have finished the project by now. We would have scaled down the game," Provost said.
How Canada compares internationally
Canada is the third-biggest country on Kickstarter in terms of number of projects. Of the 301,000 projects analyzed, fewer than 10,000 were Canadian, compared to 245,00 in the U.S. and 25,000 in Britain.
In terms of crowdfunding money raised, Canadians netted $133 million in 2015, compared with $36 billion in the U.S., according to a recent report by the National Crowdfunding Association of Canada, which tracks and promotes 100 online funding platforms in the country.
"The traditional narrative is that Canadians are more risk-averse," said Christopher Charlesworth of HiveWire, a consulting firm that helps companies develop crowdfunding campaigns.
"But because we don't have a strong domestic crowdfunding industry, we have less visibility relative to the actual activity. Canadian campaigns get lost among all campaigns."
Most of the data came from Web Robots, a Lithuanian firm that harvests and shares data from multiple web services. HiveWire provided additional data for Canadian Kickstarter projects that went further back to 2010.
The CBC compiled the data for each month, removed duplicate entries and discarded miscategorized entries (for example, projects based in Canada but having New York or Hong Kong listed as the city).
All of the data analysis was made in the Python programming language.