The fact that 55% of all Kickstarter campaigns in the hardware category since Kickstarter's inception in 2009 were launched in the past 12 months alone strongly suggests that many engineers are turning to crowdfunding as a way to fund and promote their hardware projects. As much as we love Kickstarter and the fantastic products it has brought us, we wanted to address some concerns specific to hardware campaigns.

Kickstarter campaign managers need to already have a large amount money and interest in their product before the campaign begins to create the inertia needed to make it successful. In fact, many companies with previous funding and attention are turning to Kickstarter as a sort of Series A, using it as a platform to prove market validation.  As a result, campaigns either overwhelmingly succeed or fail; there is no middle ground. For the hardware campaigns that succeed, projects on average are 602% funded and have an average of 754 backers. On the opposite end of the spectrum, campaigns that fail are on average only 18% funded and have an average of only 69 backers.

This creates two problems. First underfunded projects, many of which may be well designed and useful projects, aren't able to come to life (which was Kickstarter's original mission) due to Kickstarter's all or nothing policy. Of the total number of hardware Kickstarter projects there was a 42% failure rate (an additional 9% were either canceled or suspended).

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Secondly, it creates many overfunded projects that need to scale to high volume quickly but  whose companies do not have a comprehensive understanding of the manufacturing process. Designing and marketing your product may be relatively easy, but quickly scaling and getting your product to market is hard. We know this and it's the exact reason that we started CircuitHub.

Overfunding of campaigns eliminates the learning curve companies would normally experience as they produce ever larger lot sizes. Skipping directly to mass production requires relationships with manufacturing partners and logistics expertise. Vetting factories and acquiring expertise is expensive, time consuming, and distracting. As a result, the more funded a campaign is, the less likely it is to deliver on time. By helping companies quickly scale and managing all of the factory logistics, CircuitHub can help startups deliver their products to their backers on time.

But what if your Kickstarter project did not succeed? CircuitHub is also an alternative for companies or individuals whose campaigns were unsuccessful or for those choose not to go the crowdfunding route. For those people, CircuitHub can operate on a pre-sales model.

Unlike crowdfunding, where the price per unit is fixed based on the price you start with when you begin the crowdfunding campaign, in the pre-sale model every added user decreases the price. CircuitHub can automatically batch orders on a rolling basis and enter production when requested. The campaign is guaranteed to succeed, the only variable being the final unit cost of the device.

The stats behind Kickstarter hardware campaigns:

*data taken from Kickspy on 5/16/14