Another conference. “Great.”
This one’s different, trust us. Our new event for New York is focused on quality, not quantity.
We loved the idea of the latter; not only would we get the investment to cover the costs of the initial production run, we could also gain incredible insight from our actual customers.
We had to focus on the value we provide to our potential customers. It matched our mental model of “being lean” – we were not only gathering funds, we were also testing the waters. We put all our efforts into market research, building a niche-focused product, matching marketing message and pitches, record a value-focused video. We were ready for the crowd to take our idea and turn it into reality.
Reality, however, shows that crowdfunding obviously has its caveats. Halfway into our campaign, here are some lessons we learned.
Misconception #1: “Crowdfunding platforms provide the crowd”
The first reality is that you need to bring your own crowd to your campaign. Experienced project creators we spoke to all said the same thing: crowdfunding is more about activating an existing audience, not really about gathering a brand new audience.
There are loads of projects that have successfully activated existing communities, for example a bible app, a website redesign and a movie. If you’ve done a Kickstarter campaign before, be ready for a successful “version 2.0”: HiddenRadio2 and The BIG Turtle Shell activated the community from their previous campaign. When it comes to crowdfunding, community definitely trumps product.
In fact, depending on your type of product and market, you will limit your target market to those who are (somewhat) familiar with the concept of crowdfunding; which might or might not be a big limitation for you. To put this to the test; go to a random Kickstarter, go to the backers list, and see how many first-time backers you can find between the backers who are “repeat offenders.” See what you find.
Misconception #2: “Running a Kickstarter makes you unique”
Crowdfunding is popular. This has the big advantage of expanding your potential audience, but also attracts more projects to “the crowdfunding gold rush.”
With more than 147,000 projects launched on Kickstarter to date, you can bet that it’s becoming harder to get noticed. With any Kickstarter campaign, it is crucial to make people find your project.
However, getting press attention is only getting harder now that several big blogs have written about crowdfunding fatigue and fears of scams. A couple of years ago it was enough to pitch your story; nowadays most journalists want to get a prototype in their hands before writing about you. It seems our collective honeymoon period with crowdfunding is over.
Misconception #3: “Crowdfunding is done on a shoestring budget”
While you might be under the impression crowdfunding is the perfect place to go from $0 to $1,000,000 in 60 seconds, reality is that a lot of big crowdfunding successes have big bucks to spend. They hire a professional videographer, a top-notch PR firm and spend thousands of dollars on online advertising – some of them even already raised millions from investors. Not to mention the costs of the initial research that goes into building the first prototypes.
There are of course outliers that have zero budget and big success, but that is more akin to winning the lottery than you might think.
Did we get it right?
We’re not sure. Before we launched our campaign we did some smaller market tests which were very promising. We expected our campaign to be our large-scale market test, but was it? Did we really test the waters, or did we just go fishing in a small pond?
We have little over a week left to fund our project. We hope we’re going to reach our goal in time, but it’s going to be a close call. At the very least we’ve learned a lot, so before you start out on your crowdfunding adventure, we hope these following tips will help you circumvent the above caveats and protect you from the dreaded sound of crickets:
Starting your own project? A quick summary…
First of all, make sure the intersection of your target market, your audience and the Kickstarter audience make up a large enough slice to be able to get to your goal; if you have a large audience who is completely unaware of Kickstarter, you’re gonna have a bad time.
When you’ve determined that the intersection is big enough, create a message that is very compelling specifically for them: the early adopters of your product. They want to be unique, market disruptors, innovators who are on the cutting edge and most of all: collaborators, not just customers.
Treat them as such: reach out to them, ask them how they plan to use your product and listen to their suggestions and ideas, their feedback can be very valuable.
Got your message? Great! Now start your campaign before you start your campaign. That is; get people excited about your product before you push that big green “Launch” button! Ideally you should have anywhere between 30 and 40 percent of your backers ready to make a pledge on day 1.
Take, for example the Kittyo campaign that reached 100 percent of its goal in 45 minutes because of their pre-launch signups that were ready to take action. These don’t all happen by luck, so plan strategically.