You wake up in the morning, and the first thing you see is a prototype of the cookie dispenser or an unfinished screenplay on the bedside table. Why is it there?
Because you strongly believe that it will be the next big thing – sort of like Balenciaga’s sock shoes or glow-in-the-dark phone covers – and you always want to keep it in your sight. But a small pessimistic voice in your head keeps asking you: who will pay for something like this? Well, you’re in luck today, the Internet is paying for your idea!
With crowdfunding becoming the modern version of “raising capital” and “looking for investment”, bringing your ideas to life isn’t entirely impossible. With tools like JustEarlyBird to manage rewards and streamline campaigns, the toil involved in crowdfunding has also been reduced.
All it takes is effort and a smart strategy. That’s what we’ll help you learn today; how to launch your first crowdfunding campaign and reach your target?
Let’s talk about the dos, don’ts, and everything in between.
Why Should You Crowdfund?
First off, all crowdfunding campaigns are not successful. It seems like common sense to know this, but surprisingly, many people believe that crowdfunding is a child’s play and everyone exceeds their target.
Not to disappoint or discourage you, but only 37% of the campaigns on Kickstarter meet their target! That means only one in three campaigners manages to see their dream becoming a reality.
But how can you make sure you’re that one lucky guy (or girl)? We’ll discuss that later but let’s move on to the second myth. For some mysterious reason, first-timers believe that a crowdfunding campaign is an answer to their money woes. While crowdfunding can surely set your idea towards success, it’s not your overnight ticket to becoming the next Jeff Bezos. Crowdfunding takes a lot of work, effort, strategic planning, and PR skills.
Considering the two truths we unveiled, any beginner can ask the question: if it’s too risky and uncertain, why should I crowdfund – Well, because a crowdfunding campaign is an ultimate way to get money and exposure. Also, nowadays, there is a plethora of tools to help you through the process.
For example, JustEarlyBird is an excellent tool for managing your baker’s rewards, giving you ample time to focus on other aspects of crowdfunding.
● Brings in Money
The first and most apparent reason to crowdfund is that it brings in money. It raises funds for your project, allowing you to start a new company or work on your short film without any personal savings.
Moreover, when you crowdfund, you’re getting money from people who’re actually interested in your product. It means that when you finally launch the product, you’ll already have a small potential clientele.
Similarly, if you’re releasing an album, movie, documentary, or publishing a book, you already have an audience. You may not rank on the Billboard top 100 or New York Times bestsellers list, but at least, you’ll have some admirers.
Along with taking the risk out of entrepreneurship, this also gives you a sense of validation. You put your product or idea forward, and some people like it so much that they’re ready to spend their hard-earned money on it. Now, is there anything more validating than this?
● Constant Feedback
When you’re raising funds for a campaign or an idea online, there’s a whole community giving you constructive criticism and feedback.
You can ask them for ideas or share your plans with them to know what they think. How does this help? It helps you eliminate the flaws and potential shortcomings out of your product before it hits the market.
It’s a fool-proof way to ensure that your product is as close to perfect and practical as possible.
What Platform should you choose?
If you’ve done some basic research on crowdfunding, you’ll already know the two most used platforms are Kickstarter and Indiegogo. While Kickstarter is often the first choice for most people, both platforms have different perks.
All or None
Payment Processing Fee
3% + 0.2c
3% + 0.3c
For instance, Kickstarter only allows you only to get the money if you’ve reached your final goal. Suppose your campaign’s target is $2000, and you only make $1500 in the given duration.
What do you get? Nothing.
In contrast, if you’d been running the same campaign on Indiegogo, that $1500 would be yours.
Now, there are two ways to look at it. First, Indiegogo is a better option for a first-timer because even if you don’t meet the target, you’ll have some capital to start with. The second approach is to start a campaign on Kickstarter and learn from your mistakes. If your campaign fails, it could either be due to poor campaign management or an unattractive idea.
● Project Eligibility
If nothing else is helping you make a decision, consider if your project is eligible for the platform or not. For example, Kickstarter is popular for campaigns that already have a working prototype.
Do not run your personal or charity campaigns on Kickstarter as you’ll be wasting your precious time. Instead, head over to Indiegogo for these campaigns. It is the right platform for small businesses and personal fundraising. Also, the platform permits charity campaigns.
● Platform Rules
Before launching a campaign, familiarize yourself with the rules of your chosen platform. If you’re running a Kickstarter crowdfunding campaign, you must be 18 or older and a resident of the eligible countries.
Since Kickstarter’s payment partner is Stripe, you’ll also have to ensure that you follow their guidelines.
Like Kickstarter, Indiegogo also has a checklist to consider before launching a campaign. Go through the guidelines thoroughly to avoid any disappointment later.
When to Launch?
After you’ve chosen the platform for your crowdfunding campaign, you’re ready to make an account and begin. But when do you launch?
One of the reasons for most people failing is that they launch at the wrong time. Even if their campaign is a money-maker, it goes down the drain due to poor timing. You wouldn’t release a Christmas movie in mid-July, would you? The same principle applies while launching a crowdfunding campaign too.
A very interesting example of this is Ryan Grepper of the Coolest Cooler. 62,642 backers pledged $13,285,226 for his campaign with a target of only $50,000. If you’re a bit slow with numbers, that’s a whopping 13 million crowdfund for a cooler.
But, Coolest Cooler isn’t an ordinary cooler. Ryan’s success can teach beginners a lot. His tag line for the campaign was ‘COOLEST COOLER: 21st Century Cooler’s Actually Cooler’. Notice the wordplay and catchy tone of his slogan. With a fun and quirky tone like this, his product was bound to attract people.
But here’s the interesting part: Ryan didn’t make all this money in his first campaign, which was targeted at $125,000. Why is that? – He launched the campaign at the wrong time.
During his first attempt, Ryan launched during December when no one was willing to buy a cooler. The next time, he launched the same campaign in July and raised over $13 million because what’s a must-have for all your beach parties? A cooler that comes with an ice-crusher and a built-in USB charger.
So yes, you have to think smartly and plan accordingly.
Choosing a Funding Target
One of the crowdfunding campaign best practices is to set a smart target that isn’t too high to reach nor too low to do your business no good.
Here’s how you can choose a target. Estimate the minimum amount you need to put your idea to action. Voila! That’s your funding target.
Why choose the minimum and not the maximum? Because people are more likely to back you if they think you’re winning. The closer you are to your goal in the first two days, the higher your chances of surpassing the final target. When people see that your campaign is reaching the target quickly, they’re bound to act on instinct and pledge.
On the contrary, if you set a target too high, it will take you time to reach it. During this time, potential backers might be hesitant to spend their money on your project, seeing your slow growth.
To reach your funding target, you can use different strategies such as link-building, influencer marketing, and reward-based backing. Luckily, there are plenty of tools to assist you in all these aspects. For instance, Krowdster helps reach influencers while JustEarlyBird manages your campaign’s rewards, saving you time and energy.
Creating the Campaign Page
When creating your campaign page, have the same mindset that you do in an interview. Here, the first impression really is the last because no one’s coming back to your page if they don’t like what they see or read.
- First, make sure you have professional-grade pictures of your product. You can either hire a photographer or take them yourself with a DSLR. Remember, this is not the time to whip out your phone camera – no, not even with the Snapchat filters.
- Coming to the text, start with a gripping introduction. This is where you grab the visitor’s attention. They’ll only read further if they like the introduction, so do your best in this section.
- If you’re crowdfunding for a product, write about its specifications, features, and other details. For an art or media piece, write the inspiration behind the idea and give a synopsis of your project.
- When choosing the duration of the campaign, you can set it up to 60 days for Kickstarter and Indiegogo.
- To encourage people to act quickly, use words like “limited offer” or “exclusive opportunity”. People love to get their hands on something that won’t be available for too long.
- Use reward-management tools like JustEarlyBird that create urgency and make your backers act faster by showing them low stock quantities.
If you’re running the campaign on Kickstarter, you’ll likely have some exposure already. Mention testimonials or incidents where your product has been mentioned on known platforms.
Everyone’s suddenly interested when they find out your product was featured on Forbes or Anna Wintour complimented your summer collection. You get the point, right?
Be confident, but don’t brag too much as it can drive some potential backers away.
It’s mind-boggling how many people ignore one of the top crowdfunding campaign best practices, i.e., creating a campaign video. Don’t let your screen shyness come in the way of your online success as an entrepreneur.
Indiegogo recommends making the first ten seconds of your video most impactful. If it’s impressive, you can even use it as a YouTube banner ad to generate traffic for your campaign.
- Be present in the video as it creates a personal touch and lets people know that there’s a real person behind the campaign.
- Choose the right music as it can set the tone for the video.
- Don’t make it sound like a fundraiser video. Instead, ask your viewers to accompany you on this journey towards a goal. You can increase their interest by giving a sneak-peak of your product.
- Add a teaser from your short film or documentary to spike interest or share your prototype with the audience.
- Finish your video with a Call to Action.
All in all, be confident and clear about what you’re planning to do. If all goes well, the viewers will pledge on your project as soon as the video ends.
It was a long ride, but we’ve finally reached the end of this guide. Along with discussing some basic steps involved in starting a project, we also mentioned crowdfunding campaign best practices and debunked some myths.
In all honesty, you shouldn’t expect your crowdfunding campaign to shoot through the roof in the first attempt. However, if you follow our advice and learn from success stories, you might be the next Ryan Grepper.