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Comment by skuhn | Hacker News Reader

That they kept going back on Kickstarter remains a mystery to me. Once you have to an extent established a brand and customer base, do you sufficiently benefit from Kickstarter to justify the 10% haircut on what you earn? Plus the overhead of dealing with the campaign and backers.

Their second campaign ($20 mil) happened RIGHT before the Apple Watch launched, and they promised full refunds up until the product shipped. I wonder how many people took them up on that once they saw what Apple was up to.

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I bet that "10% haircut" is _way_ better a deal than if they tried to sell them through traditional bricks-n-mortar watch stores... I'd be quite surprised if there's not a standard 100% retail markup for watches in this category.

I'm guessing Pebble chose to use Kickstarter as a distribution channel - much like Apples AppStore - which was a way easier and cheaper way for them to retail their product that cutting global retail distribution deals. The "get your hands on the money before you ship the product" would have just been icing on the cake (at least after their first unexpected Kickstarter success...)

I'm sure you're right. Retail stores, and specialty watch shops in particular, will want more than 10%. Although I don't know if Pebble ever sold outside of places like Best Buy.

I was thinking more of using their own sales channel. They have sold through their own website since their first batch of products started shipping. They would still need to get the word out and everything, but there are lots of ways to do that via PR.

Kickstarter campaigns typically sell the product for less than retail. In the case of Pebble's second campaign they went for a 5-15% discount over retail. They had clearly already completed almost all of the design and manufacturing work by the time they launched the campaign, so that makes it more mysterious to me.

Discounting a product before launch is something you do when you have to -- your product is unproven, you really need the money, or you need to build a community day 1 -- it isn't something you want to do regularly throughout the life of the company.

The 10% overhead is largely advertising and a way to get preorders (after you are established)

But, while software (gaming), take a look at some interviews with Larian and Obsidian/inExile (I forget which one of those... probably both). They keep returning to the KS for fundraising and a large part of it is that even a successful campaign and perfect release doesn't necessarily give them the capital to start the next project without investors.

Personally: I backed the first pebble KS and got an okay product (looked like crap and not a lot of utility, but what it did, it did well). But I definitely got turned off by the multiple campaign thing (and the frequency of them) as it suggested a lack of long term support for the product.

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