Kickstart Your Idea: How to Crowdfund Successfully
With the JOBS Act having gone through, the flexibility available to raise funds to start a business has increased drastically. With this, has come a proverbial tidal wave of services designed to take advantage of this exciting new era of fund-raising and entrepreneurship. Kickstarter is arguably the premier crowd-funding platform - with nearly 43,000 successful projects launched, accounting for over $565 million, the numbers don’t lie. In essence, crowd-funding is a way to rally enthusiastic potential customers to pre-purchase whatever you are offering so that you can use the capital to complete the project. Kickstarter has funded everything from films, to underwear, to submarines - all using this model. When done correctly, crowd-funding can be a great option to get your company rolling. Here are some tips to help you run a successful campaign.
1) Create a passionate and interesting video:
Central to Kickstarter’s project pages is the video. This is where you pitch your prospects. While the video is “optional” it really isn’t, as projects with videos succeed 20% more often than those without. A good video is informative and authentic, show the viewer the people behind the project, demonstrate your passion, excitement, and capability to succeed. Show the viewer why they should be excited, and why you need their help. Finish the video with a call to action (i.e. “Join our campaign now by buying a t-shirt below, every bit of support counts!”) Production value doesn’t have to be Hollywood level, just make sure that it’s good enough, and that the content is of a high-quality - remember people are investing in you just as much as they are investing in the idea.
2) Strategize your “reward tiers”:
Kickstarter operates by giving users many options to support a project, from donating $1 to get a simple “Thank you” email, to donating $10,000 to get a VIP package. The data shows that very few projects succeed without an option under $20. In fact, the most popular contribution amount is $25, while the average is $70 (keeping in mind the average is skewed by the high value contributions). While it is reasonable to expect supporters to pay a premium over market value for reward items (i.e. $30 for a snazzy t-shirt) you can’t stray to far away from typical values. The successful campaigns tend to offer rewards that are unique to the project, with high-cost rewards often being unique and/or creative experiences related to the project. Offering unique and exciting rewards, priced about 110%-130% of market value, with increments enabling every possible user to contribute is vital.
3) Work your own network and social media:
Although the hope in Kickstarter is that complete strangers will contribute to support your campaign, a significant portion of your supporters are likely to come from your networks. Promoting your campaign with a very personal touch to your friends and acquaintances is important. Don’t spam people by any means though! Provide updates through Facebook and Twitter, post your campaign into relevant groups on LinkedIn. A successful campaign entails a considerable amount of active campaigning and marketing on your part.
4) Run a tight timeline:
Kickstarter enables you to run a campaign as short as one day, or as long as sixty. Statistically, the campaigns that are less than thirty days are the most successful. This is due to the urgency that it provides, people might “wait and see” and end up forgetting. This also means that you can work your networks and your marketing more intensely, without fatiguing your audience. Be efficient and quick, a successful campaign will be intense and perhaps a little exhausting.
5) Don’t underestimate the difficulty:
Looking at a Kickstarter campaign, it might appear fairly easy and straightforward. It isn’t. I’ve talked with many fellow entrepreneurs who have run successful and failed Kickstarter campaigns - the successful ones put in plenty of time fine-tuning their page before launching. This should take you at least a week of real effort to get launch-ready. Making sure the wording is perfect, the video is effective, and the rewards properly strategized takes time and feedback. Talk to people and get their feedback, generate buzz within your own networks, and have a general marketing strategy figured out. Expect delays in getting your campaign approved.
Kickstarter can be a tremendous platform for you to raise money to get started on your great idea, however, it takes a very high level of preparation and strategizing to succeed. The take away points are fairly simple:
- Fine tune your page carefully before launching
- Invest the time and resources to put a good video together
- Strategize rewards that are interesting, unique, and priced appropriately
- Before you launch, build some “buzz” within your networks, and see if you can get friends to “pre-commit” some money to start the campaign with a bang
- Market your campaign carefully while it’s running, just don’t spam your networks
- Expect to spend at least a week getting everything ready
- Study other projects similar to yours that have succeeded and failed, learn from them.
Good luck with your campaigns and feel free to contact me with any questions. I can offer some tips and advice specific to your campaign, as more specific advice is dependent on what your project is. More Kickstarter Stats HERE. Go Kickstart your dreams!