Marketing Turnaround - 2017


Crowdfunding Your Next Project

By Gail Z. Martin

The internet is not a bank or an ATM. Just posting something—even something really cool—online will not automatically make strangers throw money at you. Yet the internet has managed to turn the way we handle money inside out and upside down in a variety of ways.

Most of us at least access our bank and financial accounts online even if we cling to getting a paper statement in the mail. Likewise, online bill pay is the norm more than the exception. We send and receive money via PayPal without batting an eye. So it might not really be so strange that the internet has also democratized angel investing and the centuries-old model of being a true patron of the arts.

Kickstarter and Indiegogo are two of the best-known funding platforms, but they are vastly different in their structure and purpose. Other sites like these exist, but these are the best known and most successful. Whether or not they will work for you depends on what you're trying to accomplish and how hard you're willing to work for it.

Whole books have been written about how to run a crowdfunding campaign. I'm only going to touch on a few essentials. First, have a good product. Enthusiasm won't make up for shoddy goods. Second, do your homework and due diligence about your development and manufacturing costs, production essentials, packaging, shipping, handling and fulfillment plans. Many a successfully-funded project has come to grief because the campaign manager did not accurately figure out what it would take to actual produce the product (or forgot to charge for shipping and handling). The horror stories are legendary, and you don't want to be a new one, so make a business plan, just like you would in the offline world, and consult people who have successfully crowdfunded similar products. The creator community is remarkably open, friendly and helpful when approached seriously and with respect. Ask for and take advice from people who have done this before. And third, plan for heavy, ongoing promotion.

Just putting up a campaign page will not send money flowing to your door, regardless of which platform you choose. It takes work to design a good campaign, and it requires time and commitment to gain the trust of the platform's community in advance of a campaign. Promoting the project requires constant, consistent effort utilizing as many social media sites as you can manage. It is not a one-person job. In fact, one hallmark of successful campaigns is that they have a dedicated (nearly obsessive) team behind them to share the work and leverage the online following of multiple creators.

Having been part of quite a few successful Kickstarters, I can attest that the promotional volume and frequency borders on overkill, but it's essential, especially in the crucial first few and last few days. It can also be fun. Being online with friends and interacting about every new pledge in real-time has the feel of one of those PBS phone-a-thons. It became addictive watching the funding level inch upward, exhorting our followers on social media to get in on the deal before it ended.

The beginning and ending of a campaign are when most of the money comes in. Good campaigns don't appear out of nowhere and expect an immediate influx of backers. Smart project managers let their core audience know a campaign is coming well in advance, stoking interest and desire, dangling tidbits about the rewards and stretch goals, revealing glimpses before the campaign goes live. The goal is to have a large a group of enthusiastic backers ready to jump in as soon as the project is open to create a surge of interest.

Projects that fund rapidly in the first crucial days attract attention. They're more likely to become a Kickstarter 'staff pick' or be featured as a hot project where they'll catch the eye of backers looking for a good deal. That's why getting that momentum early is so essential, and why good pre-promotion and heavy initial communication about the campaign is non-negotiable.

Most campaigns sag a bit in the middle, a reason to structure the length to be about a month, give or take a bit, so that the project doesn't become old news. Backers will straggle in, and now it becomes important to have good pre- and post-funding milestone goals so that there is always something new and exciting to tell your audience and backers. Ideally, you always want to be just closing in on a new milestone with extra rewards or just celebrating passing a goal, to keep the campaign exciting.

Make sure your partners in the campaign understand the relentless nature of the promotion necessary to succeed. Not everyone will see every post or tweet (remember what I said about the organic views on Facebook being in the low single digits) so you've got to talk about it a lot, and visibility rises in the algorithm the more people you tag and who like, comment and share your posts. Get your echo chamber on board in advance.

The last few days of a campaign are the final surge. It's possible in Kickstarter to tag a live project to remind you when it's near the end of its run, so backers can decide at that point whether or not to jump in. Some people love swooping in with the final dollars that push a project over its threshold. Others will make a minimum pledge early-on, and come back later to see if they can nudge the needle to achieve an attractive stretch goal, or put in more money for a reward level once they're reasonably sure the campaign will fund.

If you eased up at all on your promotion in the middle, it's time to kick it up a notch to cross the finish line. Remember to communicate with your backers too, encouraging them to bring their friends into the deal. The last few hours can feel like a party on social media, or a bender in Vegas, pulling the lever on the slot machine and hoping to ring up a win. Plan to be online the whole time on all your social media sites during the last few hours and make it as interactive, engaging and fun as possible to woo the last few backers. Nothing succeeds like success, so brag a little about what you've achieved if you're past the base amount and super-funding. Or, beg shamelessly (and endearingly) if you're in the last stretch and not quite there, reminding potential backers of all the project benefits plus any incentives that have been unlocked.

Remember that no matter what tangible product your campaign delivers, your backers have plenty of other ways they could get a similar item elsewhere. The thrill of crowdfunding for the backer is bringing something to life, being part of a group with a purpose, and getting a good deal with extra rewards and freebies.

In other words, the social aspect of crowdfunding is addictive and is part of what is being purchased. Make it an event and consciously build up anticipation, excitement, anxiety and celebration.

Kickstarter

Kickstarter is the gold standard for crowdfunding sites. It's a site for makers and creators to post a campaign in order to raise money to bring a project to life. The types of projects vary widely. Exploding Kittens, a memorably-named tabletop card game, raised over $8.7 million dollars from more than 200,000 backers, setting a record. Athena's Daughters, an anthology about heroic female characters written by female authors, raised over $44,000 from almost 2,000 backers and became the most successful literary project on the site at that time.

No matter how it might appear to outsiders, crowdfunding is not 'free money'. Good campaigns don't happen by accident, and campaign managers work hard for months before, during and after a campaign to make a project successful.

Kickstarter's premise is simple. The person in charge of the campaign posts a description of the product to be funded, and how the money will be used.

Usually, this includes incentives and rewards for backers to exceed the minimum level of funding. Projects that over-fund deliver extras to their backers, all spelled out in the project description.

The video at the top of a project page is essential. Skimp on quality or create a video that doesn't accurately capture your campaign's purpose, and most potential backers won't read further. It doesn't have to be Hollywood-level slick, but it does need to convey competence, professionalism and heart. Here's a place where branding and credibility really matter, and come into play in a big way.

Don't rush into creating a Kickstarter campaign. Spend time on the site looking at similar projects to the one you want to run. See what works and what doesn't. Study the failures as well as the successes. Back campaigns. Kickstarter is a community as much as it is a crowdfunding platform, and backers want to know that you support other creators. Most campaigns offer backer levels as low as $1 or $5, so you can afford to participate in several campaigns to get the feel for how things really work.

Your campaign page should be easy to understand. Backers should be able to tell by skimming the page what your base funding level is, what the product being funded is, and what backers at various levels of funding will receive. Building backer trust is essential. You're asking strangers to give you money to underwrite creating a product, so you need to make sure that every aspect of your page gives them a reason to trust you. Showing that you've been active backing other projects is a step in the right direction. A good video that features you, the creator, is another step, as is a well-written and easy-to-follow campaign page.

Communication is key. Kickstarter has a built-in mechanism for the project owner to communicate with backers. Use it. One of the biggest complaints backers voice is receiving too little communication from the creator of the project, especially if delivering he product hits delays. They will forgive a well-explained delay, but leaving them hanging in silence is likely to kill your prospects of doing another successful campaign. Increase your influence by nurturing your relationship with backers.

Kickstarter is social. Backers can comment on the campaign and want to hear from you, the creator. Gaining the coveted status of having your project become a 'staff pick' gives your campaign visibility, likely to attract backers who consider window shopping on Kickstarter and making impulse purchases to be a fun way to spend an evening. Much of your project's funding may come from people who don't know you or your company outside of the campaign. But once they back your project, you begin to build an audience that can follow you from one project to another, because you have a backer list and permission to contact them about other projects of interest. As with your email list, treat your backer list with care. Don't be afraid to contact them about new projects, but never spam them. 'List fatigue' is a real hazard, so make your communications count.

Indiegogo is the other big crowdfunding site. It works much like Kickstarter with some important exceptions. One is that Indiegogo permits fundraising for charitable causes, which Kickstarter no longer allows.

Indiegogo is also getting into the business start-up funding market, bringing the crowdfunding model to equity investment, a brand new feature. There's a lot to like about Indiegogo, but one downside is important. Historically, Indiegogo's user base has not been as large as Kickstarter's. Since a lot of the support projects on Kickstarter receive come from strangers, people who were out browsing on the site and happened upon a project they like, that decrease in traffic can make a big impact on your funding. Kickstarter is like having a storefront in the Mall of America, and Indiegogo is like being in a plaza on a side street.

Another difference is that Kickstarter requires you to meet your base funding goal or forfeit all money earned, which is returned to the backers. Indiegogo gives project managers a choice on whether to set a campaign up to be all-or-nothing or to be able to keep whatever is earned whether or not the base goal is met. Indiegogo and Kickstarter also differ in their fee for the use of the platform, among other differences. Make sure you understand the pros and cons of each site before you set up your campaign.

It may be that Indigogo is pursuing more niche markets like start-up equity and fundraising to carve out a place for itself that is not in direct competition with Kickstarter. And it's a fine site in many regards, but be aware of the differences between the sites when you have to choose where to crowdfund your project.

Excerpted from The Essential Social Media Marketing Handbook: A New Roadmap for Maximizing Your Brand, Influence and Credibility