Roast, Grind, Brew, Kickstart

12 Pages Posted: 27 Aug 2018

See all articles by Alexander Koes

Alexander Koes

University of Virginia - Darden School of Business

Mathew Reiss

Independent

Yael Grushka-Cockayne

University of Virginia - Darden School of Business; Harvard University - Business School (HBS)

Abstract

This case describes an entrepreneur who turns to Kickstarter to help launch a product and satisfy investor requests to prove the market. The case discusses the decisions that need to be made with regards to launching a campaign, and analyzes ways to increase the likelihood that the campaign will be successful. Accompanying datasets give students access to thousands of past campaigns, which can be used to determine the factors that impact campaign outcomes. This case can be used for first-year decision analysis with only excel or second-year data science by leveraging the accompanying Python starter code. (Please contact Customer Support for the Python file.) Students should be encouraged to bring past experiences with Kickstarter and launching new products to the classroom discussion.

Excerpt

UVA-QA-0900

Aug. 6, 2018

Roast, Grind, Brew, Kickstart

Felix Artmann stared at the email in front of him. There was only one line in particular that caught his attention: “Unfortunately, until consumer interest is explicitly proven, we can't justify making any further investments in Bonaverde.” Artmann and his cofounder had been working on their innovative coffee start-up for the past two years and finally had a functioning prototype that they could take to manufacturers. Having survived bankruptcy once already, getting to this point was nothing short of a miracle. However, they still needed another $ 400,000 to cover the fixed costs of commercial manufacturing, which their investors were unwilling to provide. What the Bonaverde team needed was a platform for raising awareness of their product and gathering paid preorders, all without further investment or equity dilution. What the team needed was Kickstarter.

What is Kickstarter?

Kickstarter was an online crowdfunding platform. The term “crowdfunding” referred to the method by which projects (campaigns) could raise money. Crowdfunding worked by appealing not to a small, select group of investors, but to the “crowd” or public at large, soliciting many small donations in order to reach a goal. Although the internet enabled a number of online platforms to support crowdfunding efforts—such as Kickstarter, Indiegogo, GoFundMe, Patreon, and more—the practice predated modern technology by at least a few hundred years. A famous early example occurred in 1885, when Joseph Pulitzer used his newspaper to announce a fundraising drive to finish construction on the Statue of Liberty. In five months, Pulitzer had raised $ 102,000 (equivalent to $ 2.5 million in 2018), with over 80% of the donations coming in amounts less than $ 1 each, and construction was able to continue.

. . .

Keywords: entrepreneurship, marketing, new product launch, regression analysis, data science, Python, Excel, hypothesis testing

Suggested Citation

Koes, Alexander and Reiss, Mathew and Grushka-Cockayne, Yael, Roast, Grind, Brew, Kickstart. Darden Case No. UVA-QA-0900. Available at SSRN: https://ssrn.com/abstract=3238621

Alexander Koes

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Mathew Reiss

Independent

No Address Available

Yael Grushka-Cockayne (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

HOME PAGE: http://https://www.hbs.edu/faculty/Pages/profile.aspx?facId=263650

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