Ryan Grepper launched a Kickstarter campaign for a new kind of cooler. How was he to know he’d raise too much money?
Author Cristina Rouvalis Illustration Josh Cochran
Ever since he hit pay dirt with his Kickstarter campaign last year, Ryan Grepper has spent most of his waking hours figuring out how he’s going to produce enough next-level beverage coolers to fill an aircraft hangar.
Grepper, a 39-year-old Portland, Oregon–based inventor, launched his crowdfunding bid in mid-2014, having hit on an idea for what he calls the Coolest Cooler, which comes with a built-in blender, waterproof Bluetooth speaker, USB charger and a predicted price tag of $399. He figured he would raise maybe $50,000, enough to make 500 of the items. Instead, his campaign received the biggest payout in Kickstarter history, with 62,642 backers raising a whopping $13.28 million.
In the nearly six years since it was founded, Kickstarter has helped raise north of $1 billion for more than 75,000 projects. Though it’s sometimes characterized as an investment vehicle, Kickstarter is really a form of mass patronage, in which ordinary people donate cash in exchange for little more than the satisfaction of helping a good idea come to fruition (and possibly a thank-you gift). But what happens when a project raises too much money?
Grepper, for instance, promised donors who pledged $200 or more a free Coolest Cooler, which wound up being 61,120 people, with some pledging enough to get more than one. This number is going to pose a challenge, given that, almost 10 weeks after his project was funded, he was still awaiting delivery of his first 100 coolers from a factory in China. “The manufacturing process,” he says, “takes a lot longer than the average layperson expects.”
In the world of crowdfunding, Grepper’s cause for concern is less a legal issue—though Kickstarter does require creators to follow through on their promises—than it is one of reputation. If he is seen as betraying the trust of his investors, he will be scorned on Kickstarter’s comment thread and possibly lose his crowdfunding privileges for future endeavors.
“Anyone who launches crowdfunding and doesn’t deliver will make everything else they try to do more difficult,” Grepper says.
That said, the idea of crowdfunding is to move away from the risk-averse, nitpicky approach of traditional investment. There is a freewheeling attitude among these nontraditional investors that has led them to stump up large sums of money for questionable projects, such as Zombie-Based Learning, a middle school geography curriculum “taught through the scenario of a Zombie Apocalypse.” Christian Catalini, a professor of entrepreneurship at MIT, points out that people can get carried away by the enthusiasm of crowdfunding. “You may,” he says, “end up funding things you wouldn’t want to fund.”
But that, too, is kind of the point. Kickstarter spokesman Justin Kazmark insists that the site is primarily geared toward supporting ideas that appeal to people’s quirky sensibilities.
“Certainly there will be projects that make money,” he says, “but it’s not about profit.” For example, a guy who had the idea that he wanted to make a batch of potato salad (goal: $10) ended up raising $55,492. But CatZapper, a browser extension that removes cute-kitty material from a user’s social networking pages, did not meet its funding goal. Even in this gung-ho environment, about 60 percent of campaigns fail to meet their goals and receive funding.
As for how Grepper’s going to meet the challenges associated with manufacturing 65,000 high-tech coolers from scratch—well, that’s his problem. Kickstarter, having taken its 5 percent cut of the funding, does not get involved with the messy business of bringing an idea to fruition.
Kazmark does, at least, have a few words of warning for those awaiting their Coolest Coolers. “Kickstarter is not a store. It is not like going to Amazon Prime and knowing it
will be on your doorstep the next day,” he says. “Sometimes there are twists and turns. There is a risk in creating something new.”
Pittsburgh-based writer Cristina Rouvalis is still trying to figure out what a $55,000 batch of potato salad would look like.