According to a recent report published by Massolution, the global crowdfunding market is well on its way to surpassing venture capital as a funding source in 2016.
The popular crowdsourcing platforms have granted the average consumer with unprecedented powers over the entrepreneurial landscape. And he seems to be loving it. Every tech-savvy Tom, Dick or Harry can now directly decide which business ideas become a reality, and which hopeful prototypes are doomed to oblivion. I, for one, welcome our new Kickstarter overlords.
That being said, there’s still a lot we get wrong about crowdfunding. As the industry grows larger and first serious studies become available, we can see clear trends and crowdsourcing best practices begin to emerge. “I used to have a lot of opinions”, says Indiegogo CEO Slava Rubin. “Now, luckily, I don’t have to have opinions. We can talk about data.”
So here are some of the top data-driven tips for successfully crowdfunding your project:
1. Start early
It may work for Kevin Costner, but the ‘build it, and they will come’ mantra just doesn’t apply to crowdfunding. If you only begin promoting your Kickstarter campaign once it goes live, you might as well be ready to pronounce it D.O.A.
According to industry experts, the fate of most crowdfunded projects is usually decided months ahead of the actual launch, which is when the majority of your marketing efforts should transpire. Most projects are only live for 30-50 days. Rather than squeezing all of your promotional prowess in such a tight time window, you should focus on building an actionable lead database beforehand.
For some projects such as the Gender book (raised 320% of what they asked for), launching the crowdfunding campaign was nothing more than a carefully-planned finish line. They’ve done most of the hard work in the four years before the launch, building their email list, bonding with an audience, and continuously hyping their project.
Think of your campaign launch as your product’s kickass graduation party. If you want your friends, family and most of your prospective buyers to show up, you’d probably make sure to invite them well ahead of time, right? Instead, what many project leaders do is tell people about the party as it’s already well under way, and then act surprised when most of them fail to show up.
So what exactly should you do before your campaign goes live?
2. Be a community-building machine
Still, think you can get away without some heavy lead building before launch? Stand still while I throw some hard-boiled data at you.
Indiegogo says you’re five times as likely to get funded if you raise at least 25% of the overall goal in the first week. Other studies suggest visitors stay on the project page 31% longer and are 22% more likely to donate once you’ve managed to raise the first 40%. Bottom line: either you bring your own canned audience to the campaign, or it’s your project that’s likely getting canned.
So how do you pre-build a community of dedicated backers? First, if you always felt shy about leveraging networks and asking your contacts for help, now’s a perfect time to step way out of your comfort zone. Abusing your social media channels is often a must for securing initial traction for your campaign. Data says that for every order of magnitude increase in Facebook friends (10, 100, 1000), the probability of success jumps dramatically (from 9%-, 20%, to 40%). When even your closest friends get tired of hearing when your campaign’s supposed to go live, it means it’s working.
Still, don’t count on friends and family to solo carry your project. Here’s where a little online marketing 101 goes a long way. You should have a slick landing page at least six months in advance, with a clearly stated value proposition and a few prototype photos (if you have one ready). Set up a lead gen form where people can sign up to receive updates about the product, including – you guessed it – exactly when the funding starts.
Then, it’s up to you doing everything you can to direct relevant traffic to your landing page. Whether that’s sending press releases, link building or continuously reaching out to influencers, this is where most projects sink or swim. In the end, successful crowdfunding is little more than effective marketing.
3. Analyse your look-alikes
As more big data on crowdsourcing slowly becomes public, it’s easy to forget there’s priceless info already available to anyone interested. You just have to know where to look.
Crowdfunding is still a naively transparent industry. Two of the biggest platforms, Kickstarter and Indiegogo both choose to keep all of their campaigns on the site even long after they’ve ended. As a result, there’s a huge collection of actionable insight to be borrowed from similar projects in the past, regardless of whether they were successful or not.
Trying to get your wildlife documentary funded? It would be foolish not to check how other filmmakers tackled the same idea in the past. You get to directly analyse their pitch, see which perks and rewards seem to perform best for your niche, and try to determine why some made it while others failed. Case studies are awash, so why not replicate what’s already been proven to work? Embrace your crowdfunding doppelgangers. They can teach you a lot about yourself.
Direct competitor analysis also allows you to reverse-engineer most of their marketing efforts. Even a simple Google search lets you see which blogs, industry influencers and news outlets covered projects similar to yours in the past. If wildlife-enthusiast.com published a lengthy review of another crowdfunded film six months ago, he’s gonna love your project. Voila, your outreach list just became that much more relevant!
4. Specialise your outreach message
Crowdfunding is stressful. You get one shot at pleading your case to the public, so of course, you’ll want your pitch to win over as many eyeballs as possible. After all, it’s called crowdfunding for a reason, right?
Trying to appeal to the mainstream rather than your particular niche is only a good idea if you’re selling something everyone wants. In other words, unless your product is free pizza, you’ll want to personalise your campaign message.
Kittyo attributes it’s crowdfunding success to a laser-focused outreach strategy. They too felt the allure of large media outlets praising their product but knew they’d mostly just get ‘drive-by traffic’, which rarely converts. Soma, on the other hand, was covered by Huffington Post, Forbes, Mashable and many other industry giants. Their best-converting feature? A post on good.is, a niche publication with ‘only’ about 400k monthly readers.
Most successful campaigns typically have less than 1000 backers. It’s not about winning over everybody. It’s about finding 1000 souls that are going to feel truly passionate about what you created.
5. Keep updating
Once their project goes live, most campaigners turn idle quick. They’ll probably share it a few times on Facebook, perhaps even shoot a couple of emails, and then spend the rest of their time anxiously staring at the progress bar.
Ready for some more hard-hitting numbers? On average, a successful crowdfunding campaign will have at least four updates. Furthermore, campaigns that update their followers on a regular basis raise 126% more money than those without any updates. It turns out people tend to give more money to projects that make a conscious effort to engage with them. I know: mind=blown.
But what if nothing noteworthy happened since your campaign launched? Well, campaign updates don’t really have to be groundbreaking pieces of news. It can be as simple as: ‘We made it to 25%! Thank you!’. Otherwise, if there’s been any progress in product development, if you had a productive team meeting or just wanted to share some additional info about your creation, feel free to let everyone know. If you can post an update in the form of an image/graphic or a quick video, even better.
Still, campaign updates shouldn’t be limited to your campaign page. Being vocal on social media is a given, but you should also try re-engaging your outreach list with follow-up news, as well as interacting with niche forums and community influencers. Most of all – organise! Campaigns that had a day-to-day marketing plan in place raised almost 300% more. That’s three times as much free pizza.
6. Be in good company
Being on Kickstarter is kind of like being in high school again: social proof really helps. There are two ways in which this is relevant:
- On average, a team project does much better than a solo project. Based on various data from various platforms, teams raise anywhere between 38% and 300% more.
Why is this? Well, it might just be a sound marketing strategy, as you effectively multiply the number of networks you can leverage. But other than that, team projects may simply invoke more confidence in potential backers. Investing in anything’s a risk, and people could feel safer knowing that more than one person’s been involved in product development.
The chances of dealing with a mad scientist decrease with every additional person backing up his claims. Either way, having more than one perspective can certainly help, so consider grouping up before launch.
- Affiliating yourself with influencers helps. This is yet another effective way to offset the investment risk. If you can get reputable individuals or businesses to endorse your product, it sends a clear message to your audience. And a resulting PR bump is not negligible either.
Crowdfunder.com, a platform based on equity crowdfunding, says that campaigns backed by notable businessmen or investors get up to six times the engagement on their projects. Whatever type of campaign you’re launching, ask yourself who could be a relevant associate, and how you can get him excited about your product.
Soma’s campaign had the benefit of being endorsed by Tim Ferriss, a bestselling author and serial entrepreneur. To entice their followers, they were offering a 7-course, private dinner with Tim and their team at a San Francisco mansion, as a reward for their most dedicated backers. Much like high school, hanging out with jocks has its perks when you’re launching a crowdfunding campaign.