Call me old fashioned but I was dumbfounded and, quite frankly, disgusted at a recent Kickstarter campaign. A man started a campaign to make a bowl of potato salad. His goal was $10 and his pitch was, “Basically I’m just making potato salad. I haven’t decided what kind yet.” Not particularly inspiring or noteworthy. But, the results have been impressive.
To date he has raised more than $61,000. That has forced him to think about how he will spend the money including a $300 call to a chef to get a better potato salad recipe and $1000 to do a live video stream so people can watch him make the salad. Perhaps I have lost my sense of humor but I think it is sad that this effort has received so much attention. In fact, I almost did not want to mention it but it brings to light a serious issue.
Kickstarter campaigns have become more and more popular because many small businesses have a great deal of trouble getting access to capital. If you want to know more about that just check some of the surveys on access to capital and the mid-year economic report from the National Small Business Association www.nsba.biz
Getting the money you need to launch and the credit to keep a small business running has never been easy although the Small Business Administration is working to streamline the loan process and reduce paperwork. The SBA also has a new credit scoring model for loans up to $350,000. The problem is that many small business owners choose not to go this route because they need smaller loans and they can’t justify the amount of work it takes to get a small loan.
In my book Small Business of Big Thinkers, I explored this topic with a number of experts and discussed traditional banking relationships and alternative lending- which is where sites like Bolstr and Kickstarter come into play. Many entrepreneurs start by funding their business with their life savings or credit cards. Then they turn to family and friends for support. Kickstarter extends that “family circle” to lots of others who might have an interest in a product or service. That’s a good thing. In fact, over the past couple of years I have contributed to a few Kickstarter campaigns. The ones I have supported were, from my point of view, legitimate business or charitable efforts. I felt good about helping these organizations reach a goal.
We all make choices about the things we want to support. Almost 6300 people decided to spend their hard earned money on potato salad. It is of course their choice and it was interesting to see why they chose to invest. In the comments section some backers said that the project inspired them. Others railed at the stupidity and still others thought it was fun and forked over some cash. Here’s what I think. There are so many great small business ideas that are worthy of attention and investment. These are ideas and businesses that can help improve the economy, employ people and make a difference. Those are the ones that I would like to see get some attention and funding.