Elijs D. from Sundsvall, Sweden asks:
Hey aBtW, Over the last half-year/year I've noticed a very prominent increase in the number of micro-brands, both in terms of coverage, sheer numbers, and number of crowdfunding campaigns they often (though not always) use.
Why are they appearing in such droves nowadays? And are we looking at a market evolution, or at a bubble ready to burst?
That is a good question, and I am not sure there is one satisfying answer. You are for sure correct that over the last few years there has been a marked increase in the amount of projects on crowd-funding websites like Kickstarter and Indiegogo that have been about wrist watches. To be honest, I think that what you are seeing is part of a larger trend, but since because you might be paying more attention to watches rather than other products, it might appear as though this phenomenon is limited to just timepieces.
In fact, lots of enterprising people are going to crowd-funding sites to fund all types of products in droves now, because they appear to be extremely low risk ways of getting products funded. The dream is to get pre-orders for a watch so that you know there is a market for it. The logic goes that if the first batch is funded by interested people who've never seen the product, then you can produce more that additional people will want to buy after you sell your first run.
A lot of people who love timepieces harbor a dream of having their own brand. That fact has been a reality for a while with suppliers in Asia who will do pretty much everything you need, assuming you have a design to give them and a marketing plan. Crowd-funding just helps people who want to produce their own products with a low-risk way of getting them funded. The companies in Asia (or Switzerland, for that matter) that will produce watches for you often require minimum investments to produce at least a few hundred watches at a time. Because most people don't want to pay out of pocket for a risky and untested product, crowd-funding appears to be a good solution.
Here at aBlogtoWatch, we hear from at least 1-2 crowd-funded wrist watch project owners per week and sometimes more. Most are very simple timepieces that we would not consider for editorial coverage, but once in a while, there is something cool. We know the types of suppliers they use and the limits on the quality they can achieve through working in this manner. Personally, we recommend to conservative buyers that while pre-ordering a watch can be a fulfilling experience, there should be some idea of what the final product is going to look and be like. Companies with a track record of successful products who turn to crowd funding are more likely to produce a nice watch than someone totally new.
At the end of the day, crowd-funding is an exciting and low-risk means for a lot of people to see how viable their watch product ideas are. It also appears that the major crowd-funding websites often get enough eyes to successfully fund many projects, which further incentivizes people to start their own projects.
It is entirely possible that as long as a reasonable number of these projects get funded, the volume of new ones will not end. As simple economics goes, there will be people interested in the medium as long as there is money in it. Once consumers stop deciding to crowd-fund watches or other products, the popularity of the funding mechanism will predictably decrease. Like I said, it is a good idea for consumers to be hesitant about claims made by project owners if they have yet to product anything at all. Funded projects don't always make it to reality, and the final result is not always what the idea owners had in mind, given the practicalities of production.
We agree that it is interesting to see all the new crowd-funded wrist watch projects that seem to pop up all the time, but our money would only ever go to those project owners who have already demonstrated the skill and ability to produce a watch, and if we are extremely patient and understanding when it comes to production timelines and what the eventual product is going to look like. While funding production is much less risk for business owners when using crowd-sourcing for any type of product, a lot of risk still exists and can be said to be passed right on to the consumer.