It’s safe to say that most people have been exposed to crowdfunding. Whether you’ve backed a project, know someone who’s created one, heard the buzz when someone hit one out of the park, or watched a Kickstarter video on Facebook, we can’t ignore that crowdfunding is growing in popularity.
If you have a new project or product, like recording an album, providing a new widget, filming a movie, or launching a really cool idea, crowdfunding is a perfect fit. For those who don’t know how it works, here’s a rundown.
Let’s say you you’re a singer/songwriter and you’ve always wanted to record an album, but you don’t have the $20,000 to hire a recording studio. You really don’t have that many options. Save up, ask friends and family for some help, or get signed to a recording contract. As with other social media driven tools, you now have an innovative alternative. You can make a video showing off your talents, upload it to a crowdfunding platform (like Kickstarter, Indiegogo, or GoFundMe), and have a crowd of people help fund you. Pretty simple concept.
You can use crowdfunding to start a business, and you can use crowdfunding to scale a business. If you are not in the position to fund company growth, you can leverage the heck out of crowdfunding to get your pro or project to that next level. Heck, I’ve done it on four separate occasions with spiceologist.com.
Here’s a simple list I’ve compiled of Do’s and Don’ts when creating a crowdfunding campaign.
Hire a videographer: Your project video is your best chance to sell the viewers on what you’re trying to accomplish. Just because you hire a videographer, doesn’t mean they’ll do it all. You need to set them up for success. Do your research. Watch a bunch of crowdfunding videos in your particular market (successful and unsuccessful projects) to get a better picture of how your project video should look and feel. Come up with your script, storyboard, shot list, etc. Communicate the message and paint the best picture possible for your videographer, then schedule your film date.
Pencil it out: The worst thing you can do is have a successful crowdfunding project, and then realize you lost money. With Kickstarter, they take 5 percent of funds collected; plus, another 3-5 percent will be taken from the merchant service. If you are going to be shipping out rewards, figure out how much it costs to ship your product. Don’t guess. Shipping is usually much more expensive than you think, especially internationally.
Early bird rewards: “Early bird” rewards are a great way to get instant traction from early-adopters. Providing early bird reward tiers gives backers a reason to pledge now, rather than later. This is critical. Your number one objective is to start out with a bang, and create as much buzz around your new project as possible.
Rely on Kickstarter:Most people think they create an attractive video, press “launch” and then the floodgates open and you receive millions in pledges. That’s typically not how it works. Look at Kickstarter as a payment portal. You need to do all of the pre-launch marketing. Broaden your social-sphere, collect emails from prospective backers, connect with social influencers, put together a digital strategy, etc. You need to create a demand before you press “launch.”
Have a long video:Keep it short and sweet (under 2.5 minutes). Seriously. If viewers have a hard enough time finishing a fifteen-second Instagram video, what makes you think they’ll watch your entire five-minute presentation? Start out with a bang, grab their attention, pitch your idea/product, and then let them know you need their help.
Set unrealistic goals: With Kickstarter, it’s “all or nothing.” If you do not reach your goal within the allotted time, you kiss that money goodbye. Indiegogo has an option where you keep whatever funds you raise, but I try to stay away from that platform because it’s less known, over-saturated with silly projects, and harder to get organic exposure. Stick with Kickstarter, set a realistic goal, and hustle your project as hard as you can.