Welcome to Before You Launch That Kickstarter! This week I’m writing about risks and rewards. I’ll share my real-time KS experience while touching on purchase decisions, demand planning and the importance of having a backup plan. Here we go!

A Smart Buy?

In my last entry, I mentioned the toilet paper tussle. My girlfriend prefers buying in bulk  to save money while I’m content with purchasing as needed. So who’s right and how does this relate to any Kickstarter project?

From a purchase decision standpoint, I’ll have to concede that my girl is right. We have extra space at home (no storage cost), the product will be used (certain demand) and we’ll save dinero in the long run. Still, the best reason to buy big (think of your Kickstarter here) is because there’s little financial risk involved; parting with a Jackson won’t bust us nor prevent us from purchasing other products.

Takeaway: While the analogy is crappy, flush risks not resources. Buy big when forecasted demand is strong but leave room in the cart for other items.

Plan B (As in Backup)

For our project, Mission to Print, we decided to diversify the breadth of our rewards with vinyl records. In doing so, we assumed considerable risks. That’s because records are expensive to press (cost of goods sold), order fulfillment takes time (committed capital) and record players aren’t exactly as popular as iPods (uncertain demand). Although our project still has 25 days to go, demand is weak and the records are moving about as fast as cold molasses. So was this a poor purchase decision? Should we have used those funds to offer something else? The short answers are (1) I don’t know, (2) it depends and (3) time will tell.

Fortunately, we considered this scenario in advance and developed backup plans. Right now, we’re moving to give away portions of inventory to musicians who contributed to the record. Doing so will enable the artists to generate new revenues (on tour and through their websites) and expose us to new markets and potential customers. Records will have stickers referencing Mission to Print and our digital publishing company, Epilogue (cross promotion), and include free digital downloads redeemable exclusively through Epilogue’s website (drive traffic). Finally, we’re planning a social media push to slash the record price for those who share or retweet Mission to Print on Facebook and Twitter. 

Takeaway: Whatever you set out to engineer, plan to leverage leftovers creatively. Generate ideas and build value into other projects. 

Next Week: What to do when the clock is ticking and you’re halfway there: promotions, networking and modeling success. 

Before You Launch That Kickstarter! is an ongoing series about the Kickstarter experience, written by Marc-Alain Reviere. Please visit this blog weekly for tips, lessons and amusing anecdotes.