Kickstarter: a study in how to make people part with their money


Who Deserves the Money: Smart Business or Feel-Good Ideas?

I’ve been thinking obsessively about the psychology behind Kickstarter ever since I read this heated commentary exchange on a project

(For context, the project is started by Hapa Ramen in SF, which is in transition from a successful pop-up noodle business to a brick-and-mortar restaurant.  They’re asking for funds to help them equip their new kitchen with brand new equipment.)

Dinah brings up some good points. Where is the logic in giving pretty-much free money to a for-profit business, whose concept has already been proven and is growing successfully?  

Not a Good Return on Investment

The “rewards” for giving here (as in many Kickstarter projects I’ve seen) don’t add up from a rational perspective. $50 for a bowl of ramen?  $5,000 for a year of free ramen (that’s $13.70 every day, more than what a bowl of ramen goes for, no matter how fancy-schmancy!).

A Better Return

Dinah’s suggestion of an offer to pre-purchase product makes more business sense.  It gives the business the cash infusion they need, and a fair return to the funder for their investment.  And it’s not just cold-hearted capitalism—the funder/customer is taking a risk to support the business as their money’s gone if the business doesn’t make it.

Investing in Community?

Aimee’s point about investing in community makes sense when I think of non-profit arts and community-enhancement projects.  And her point of supporting new businesses makes sense for an innovator or entrepreneur trying to prove their concept.  

But her points don’t really apply here—this is for a business that’s been proven, and that is looking for cash to buy equipment.

Emotion Trumps Reason

But all that debate is moot.  Not only did Hapa Ramen get its $55,000 Kickstarter project funded—it exceeded its goal by $6,848.

What did they prove?  Both Dinah and Aimee got it wrong.  Hapa Ramen didn’t get their money because they offered a fair business exchange or any “do-good” social entrepreneurship…

Why Do We Give?  We Give for Love

Hapa Ramen got their funding because they’ve gone all out to woo and wow their fan base, to nurture the myth of Hapa Ramen, to sell a dream, to instill loyalty and passion, to make customers feel loved, like they’re a part of something magical and wonderful.  There is no logic or reason involved—just pure love and infatuation, just beautiful romance and seduction, just first-class salesmanship.

Don’t get me wrong—Hapa Ramen makes some darn good ramen.  But so do Saiwaii Ramen out in the Richmond, Hon’s Wonton House in Chinatown, and Suzu in Japan Town.  But these less savvy folks had to put in sweat equity to buy their equipment.  Hapa Ramen is getting theirs for (almost) free because they sold love along with their noodles.

Using Social Media Like the Pros

Twitter, Instagram, Tumblr, Vimeo, Facebook—the folks at Hapa Ramen are savvy marketers who have leveraged social media to nurture and spread the myth of Hapa Ramen.  Pretty much the way mainstream media icons like the Kardashians use TV and gossip magazines to build their celebrity.

Bosses Richie and Susanna are minor celebrities of their own in the local food scene.

Their Instagram is constantly updated with pretty pics of their creations for the day and intimate details from their personal life (catch a glimpse of Richie’s unborn baby!), tweeted seamlessly on Twitter, archived gorgeously on Tumblr, and passed along with love by fans on Facebook.

Their Kickstarter page is headlined by an artfully filmed and edited video, and chock-ful of fan videos from the likes of the Executive Chef of Fifth Floor and the founder of Instagram.  

Hapa Ramen is a great study in the use of social media to create a passionate customer fan base, and how to get funded when you’re appealing to the masses instead of seasoned venture capitalists and bankers.