Amazon's plan to build a Kickstarter knockoff turned into a site that helps startups sell

In 2015, a group of Amazon employees kicked around ideas for a Kickstarter-like crowdfunding site. The idea didn't get very far as they soon learned the market was already crowded.

Instead, they discovered that every retail startup was looking for someone to solve the same problem: how to get their products exposed to a wider audience?

It was a problem Amazon knew how to fix. And so the team that initially thought about a crowdfunding site turned to a new idea instead: a site called Launchpad that's dedicated to selling and promoting products only made by startups.

"What Amazon knows a lot about is going to retail and we continued to hear that that's a big problem for startups," Amazon Launchpad's senior marketing manager Jennifer Petoskey told Business Insider. "Launchpad is like having an amplifier for what you as a startup is trying to do."

Launched in July 2015, Amazon Launchpad is a marketplace for products made by startups. Amazon treats these startups like any other vendor, buying their products at the warehouse level, but also gives them additional exposure through custom pages and a site solely dedicated to Launchpad members. These products are eligible for Prime's free two-day shipping and are also sold through Amazon's main website.

Plus, through partnerships with VC firms, startup incubators, and crowdfunding sites, Amazon gets referrals on who the best startups are and easy access to buying their products. It's a win-win since startups get exposure to millions of Amazon customers, while Amazon gets full access to some of the hottest startups.

"The Launchpad is really more about helping startups become a vendor on Amazon super quick and easy," Petoskey said. "The major benefit is in the reach and exposure that we give startups."

In just one year, Launchpad has seen quick traction. At launch last year, Amazon only had 25 partnerships with VCs, incubators, and crowdfunding sources, and sold about 200 products. Now, it works with over 100 leading VC firms, including Andreessen Horowitz, and has helped over 700 startups sell roughly 1,400 products around the world.

Soylent, the Andreessen-backed nutrition juice maker, just announced its availability on Launchpad earlier this month, while other highly funded startups like Anki and Sphero also sell on the platform.

"It's really a referral relationship with VCs and incubators. They view our program as just a great distribution channel," Petoskey says.

There are two simple qualifications to applying for Launchpad. The startup must be able to get the product into Amazon's warehouse within 30 days of ordering, and the startup should have a history of receiving funding, either from a VC, incubator, or crowdfunding service, as a way to prove its market appeal.

Then Amazon reviews the products and puts in orders for the products it likes. As long as Amazon continues to place purchase orders, the startup will have its products sold on Launchpad. The home wifi system company eero was able to gain strong traction by launching through Launchpad early in its lifecycle, Petoskey notes.

Petoskey says the long-term goal of Launchpad is simply to increase the product selection for Amazon customers, while helping startups grow faster. And ultimately, that will help grow the overall e-commerce pie.

"As these companies become successful in e-commerce, they'll continue to focus on e-commerce for their distribution strategy," she said.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.