Do you have a great idea that you want to make happen? Then you’ve likely considered crowdfunding. But there’s an oft-murmured consensus that crowdfunding equals easy money – ‘build it and they will come’ you may have heard. Think again.
If you’re serious about crowdfunding a business, venture or charitable cause, you need to make sure that your project is worth the crowd’s time and money. You persuade them to support and share it.
The big question, then, is how?
You have the idea, now make it stand out from the crowd.
Show people why they should support your campaign, why you deserve their investment. As the successfully crowdfunded inventor of the home security device Canary, Adam Sager asserts, “Your responsibility is to produce a solution to a problem. You need to be able to tell people right away how the product is going to solve a real problem they have”. Chances are that people will support you if you show them your passion, your motivation and your purpose.
Next, you need to plan your structure. According to Phil Bosua who raised $1.3 million on Kickstarter with is Lifx LED smart bulb, “Every hour of planning you do before the campaign saves you 100 hours of work after it”. So start structuring your campaign as soon as possible – your budget, your rewards (and don’t forget details like delivery times and prices as these are the little things that can have a big impact if forgotten about), your marketing plan and your communications.
Structure gives you confidence in your business model and offers potential funders clarity in who you are and what your project is about.
Information is power. The more you discover about the field you are involved in, the more successful you will be. So:
• Look at other projects similar to yours, successful and unsuccessful, to see what works and what you can apply to your campaign.
• Explore all the crowdfunding sites to see which best suits your campaign – is there a specialist platform for your area, such as the arts, technology or charity?
• Search for already available products that fall under the same category as yours. See how many funders they had, what social networks they used and how long their campaign was. This will help you draw your own conclusions about your project’s needs.
• Know what you want from your campaign and what funding type best suits your needs. Are you looking to raise some initial seed investment that you can create rewards for, or are you looking for a larger raise that you will need to hand over some equity to raise?
• Research your target audience and social trends. Find out who would be more interested for your project and approach them directly. By using Facebook, Twitter and other online social platforms, you draw attention to your project.
And remember, you don’t have to launch your campaign before you can put many of these points into practice. It’s crucial to have an audience eagerly waiting your campaign before it launches, so you can get off to a flying start. In crowdfunding, momentum is crucial.
By the time your campaign has begun, you should be engaging directly with your supporters and funders!
Promote your campaign through social media and other high traffic channels such as newsletters, industry emails and blogs (both from influencers in your area and from you!). Don’t just wildly spray your enthusiasm at every passing person though – your time will be better spent targeting your market and knowing who your audience is, who your buyers are, and who’s likely to love what you’re doing.
Don’t be afraid to engage with different platforms -online and offline- to advertise your campaign: direct mail, social media advertising (surprisingly cheap but often yields great results), online newsletters, newspaper and magazine features (a press release is a key tool) or even flyers you can hand out at events and industry shows.
The more exposure your project gains, the more likely it is to get noticed, and thus the more likely it is to get funded. It’s simple maths – the more eyes land on your project page, the more money it will get.
Remember to keep you campaign updated with blog posts, information about how the project is doing, new rewards or funding milestones. If something significant happens – good or bad – then let people know. It’s a great way of showing funders that you are passionate and dedicated to your campaign and respect and value their involvement in it.
Building different communities around your campaign will help your project spread in different media.
Start with the obvious – Facebook and Twitter. Data from Kickstarter show that for every 10-fold increase in Facebook friends, your project’s chances of success double. The more friends you have, the more likely it is for your project to succeed.
It is crucial to have a clear marketing plan before starting the campaign. Be aware of the market and create a strategy. Expand your social presence by creating specific social accounts on Facebook and Twitter for your campaign, allowing you the opportunity to build an audience before launching your project.
Consider approaching companies or blogs that may be interested in sponsorship, affiliation or a partnership. Existing companies have the power to advertise to a wider target audience and bring with them inherent trust, giving your campaign an ever greater chance of reaching its target.
The trickiest part of a campaign is asking for money without sounding desperate, and most certainly with spamming or making a nuisance of yourself.
In a world where so much already exists, it can be hard to persuade people your idea is credible and deserving of their investment. Simple steps that can help with this:
• Know how much money you need and exactly what you’re going to use it for. Down to the very last penny.
• Make sure you explain the above. Break down your costs and expenses, leave nothing out and if you can, put it into a user friendly illustration – a simple pie chart or if you’ve got a designer on board, even an infographic. Letting the crowd know in detail where their money is going to be spent increases their confidence in you, and gives them a tangible route to see how their individual investment will help.
• Do some risk assessment. Informing people what will happen in case your project fails and what the likelihood is of that happening is proven to improve investor confidence and thus funding.
• Likewise, be prepared for if your project overfunds (if you choose to let it overfund). Set a ‘stretch target’ beyond your initial amount, and know how you will spend that money. Now you appear organised, strategic, credible and honest.
• Last but by no means least, know how many days you want to crowdfund for and plan a strategy that takes in everything from this article rolled out over the duration of the campaign. Too short and you won’t have time to raise the funds you need, too long and your campaign may stagnate, grind to a halt or simply be too much work to sustain.