Starting a Small Business by Winning at Crowdfunding
Crowdfunding is a difficult thing to do. Take a look at some of the greatest crowdfunding success stories, and you might think otherwise. However, the reality is that most crowdfunding campaigns that go live on Kickstarter or IndieGoGo end up failing.
Why? Do people think the idea is bad? Maybe. Do they dislike you as a person? Probably not. Did they even know the campaign existed? Who knows!
There are so many reasons that a crowdfunding project could go wrong, and honestly, there are tons of ways to fail. Instead of dwelling on that, we’re going to focus on how to succeed.
Pre-Campaign: Set the Goal
What is the absolute least amount of money that you need to get started on your business idea? If you’ve never run a crowdfunding campaign before, I would encourage you to shoot for nothing more than that. In many cases, the generosity of donors will not be stunted once your goal has been met.
Since this is typically the case, why would you risk setting your goal too high and not getting anything out of it at all? Even on IndieGoGo, the “fail-proof” crowdfunding site, the consequence of falling short on your campaign goal equals out to be a much larger cut of your money taken by IndieGoGo. And remember, that’s taken from an amount that’s already less than what your goal amount was!
Don’t get caught up on the idea that crowdfunding is easy. Do your research before setting your goal and ensure that you have a reasonable chance of achieving that goal.
Pre-Campaign: Decide on the Perks
Here’s a lesson learned from my first campaign: be extremely careful about the perks that you offer. If your campaign is built around a product idea, it is probably important to offer a way to get the product as a result of supporting the campaign.
In all other cases, I want to advise strongly against physical perks that have to be mailed out. These perks make for a logistical nightmare, and it’s extremely difficult to find the time and money to send them out.
If you find it to be an absolute necessity to offer physical perks, be sure to factor in the cost of sending them out when you set your campaign goal and your project budget.
My recommendation would be this: do not offer any kind of physical perk for less than a $100 donation. Even in this case, be careful not to go overboard.
Mid-Campaign: Get Your Friends Involved
If you’re trying to be a lone stag, succeeding in crowdfunding by solely your own efforts, you’re going to be facing a very, very steep uphill battle. After all, you can only post about your own crowdfunding campaign so many times on social media before people start blocking you left and right.
To succeed in crowdfunding, you’re definitely going to want to lean on your friends, your family, and your community.
Thankfully, this doesn’t involve pressuring anyone for money. If someone wants to financially back your campaign, they’re probably going to prefer to do it without being asked.
Don’t beg for money. Beg for support instead. One of the best ways to get traffic heading towards your Kickstarter or IndieGoGo page is via personal endorsements. Ask some of your closest friends and family members to post on social media or reach out their friends in person. You don’t have to ask them to literally shake people down for money. All they have to do is bring up your project to their friends or follower base and send them to your crowdfunding page. From there, the rest is in your hands.
For more on reaching as wide of an audience as possible, check out our post about how your idea could go viral.
Mid-Campaign: Keep Updating
As your campaign drags on, people can easily let it slip to the back of their minds. Even if they’ve considered donating, they may simply forget about the fact that you even needed them in the first place. However, simply sharing the same thoughts over and over isn’t going to change any of this.
Instead, you need to keep your campaign feeling fresh. Post regular updates about your project and how you’re working to make a dream into reality. Share specific insights about where the money’s going and how the support of your donors is impacting the bottom line.
Also, keep people excited about the idea you had in the first place. After all, donors support you for one of two reasons: you or your project. In the case of friends and family, many people are just as eager to support you as a person as they are to support any idea that you may have. Quite honestly, they may not be excited about your idea at all. They’re excited about backing you and they appreciate your passion.
The second kind of supporter is the one that supports your project. They may not even know you, but they’re excited about whatever it is you’re doing.
To post engaging updates, you’ll want to ensure that you speak to both of these groups as much as is possible.
Here’s a bonus tip: most of your money and support will come in during the last 2 days of your campaign. To capitalize on this, make sure people are aware of when your campaign is coming to a close.
Post-Campaign: Capture Contact Information
Once your campaign has ended, you will be left with a list of people who support you and your idea. The only logical response to this is to ensure that you keep track of each and every one of them. Keep in touch with them and make sure to let them know more about your journey even after the campaign is over.
This is arguably one of the most important parts of maximizing the value of your crowdfunding campaign.