Presale Resistance Syndrome (PRS)

I’ve written previously about presales (e.g. Kickstarter or Indigogo) as a tool for hardware startups.  The model enables risky & crazy ideas that would normally never see the light of day. Most will fail, but some will get through and be hugely disruptive. For example, Pebble’s record setting Kickstarter campaign accelerated their business and more fundamentally, defined the entire smart watch category.

In spite of this, I still meet entrepreneurs that resist the idea. Objections vary, but include:

  • Our target demographic does not line up with Kickstarter’s.
  • OUYA had a very successful campaign, but still failed. We don’t want to be associated with that.
  • It’s a lot of marketing work and distraction.
  • We’d rather just raise equity financing [and not have to ship all those orders].
  • We’ve launched products before; we know how to do this.

A presale is the marketing analogy to software testing: it tests product-market fit & demand before risking production investment. Of course, it’s not perfect: just like a “passed” test case is no guarantee a system works, a successful presale does not guarantee market success.  But a failure is extremely telling, and a presale (like software testing) can be a powerful tool to de-risk the journey.

  • Steven Kane

    100% agree. And I think you left out #1 best reason – fundraising with zero equity cost!