Kickstarter is an organization that helps fledgling companies gain the capital they need to succeed through crowdfunding. When people sign on to fund projects, Kickstarter guarantees that in return for their financial backing they receive the new company's product. For example, if a new phone company created a Kickstarter profile, it might give out phones in exchange for funding. Unfortunately, once a project is funded on Kickstarter, the innovative products that had once won so much attention are often unable to reach new markets.
Amazon
Amazon management recognizes the benefit that Launchpad adds to the market. Jim Adkins, a Vice President at Amazon said, "We know from talking to startups that bringing a new product to market successfully can be just as challenging as building it." He also spoke about the value that Launchpad gives to Amazon shoppers: "Amazon Launchpad gives customers access to a dedicated storefront featuring a variety of innovative new products from emerging brands."
Kickstarter's addition to Launchpad is not alone in Amazon's efforts to cater to startups. It had already formed a bond with startups by providing much needed server tools with AWS. It has also been constantly adding new product inflow lines besides Kickstarter to Launchpad. It recently added a portal for Product Hunt, a company the features items from startups. In the past, it added a portal for products from Indiegogo, an organization that is similar to Kickstarter.
With Amazon's growing interest in startups, it may need to reevaluate its approach to sales.
Amazon.com has gained a significant number of its sales by "product-discovery", or showing users new products which they might be interested in. Traditionally, Amazon did this by including recommendations and ads throughout its site.The recommendation algorithm is based on factors like what you have purchased and viewed in the past. Amazon's earnings increased by more than 20% in 2012, mostly because of its fully integrated the recommendation system. Launchpad represents a different kind of product discovery. Although Amazon customers still will receive recommendations on Launchpad, they are usually there without a specific product in mind. Amazon advertises Launchpad as a way to "Discover unique and unexpected products from today's brightest startups".
Perhaps that's what makes modern startups interesting--that they can capture your attention merely by being innovative. Launchpad presents an opportunity for customers to browse through products from refined wine corks to self-operating drones. Amazon's endgame may be a world in which people look through Amazon products as if they were aimlessly flipping through television channels.
Works Cited
CNN Contributors. "Amazon Now Selling Crowdfunded Gadgets with Launchpad." CNNMoney. Cable News Network.
Mangalindan, JP. "Amazon's Recommendation Secret." Fortune.
Ranj, Brandt. "Amazon Has a New Section for Kickstarter Products, and These Are the 5 worth Buying." Business Insider.
Lunden, Ingrid. "Amazon Takes On Product Hunt, Shopify With Launchpad, An All-In-One Marketing And Sales Portal." TechCrunch.
