Crowdfunding provides a great way to build public interest in a product, as well as gain crucial feedback on product design and features. There are, however, a lot of ways you can go wrong when setting up a campaign. Everyone loves the standout success stories on sites like Kickstarter or Indiegogo, but they are the exceptions, not the rule.
To find out how you can improve your chances, as well as avoid the worst mistakes, I asked a panel of entrepreneurs from YEC the following:
In your opinion, what’s one mistake all brands should avoid when crowdfunding online?
1. Skipping marketing before you launch
Some entrepreneurs expect that they can launch a crowdfunding campaign and its popularity will spread through friends, family, word-of-mouth and any existing customers on the crowdfunding platform. However, very few campaigns become breakout successes this way. To generate significant pledges, you need to implement a marketing strategy ahead of launch and throughout the campaign’s duration. – Firas Kittaneh, Amerisleep
2. Thinking everyone will love your idea
Many people create campaigns without doing research because they assume everyone is as passionate as they are. The most important thing is to do research first and see which campaigns are getting the most love. That will tell you what the audience wants. – Cynthia Johnson, Bell + Ivy
3. Not collecting email addresses ahead of time
Prior to a successful crowdfunding campaign, it’s important to create a landing page with an email capture form and start blogging about your industry. Use Google Keyword Planner to figure out what people are searching, and write posts that answer their questions. Once they come to your site, get their email address to let them know when your campaign launches. – Syed Balkhi, OptinMonster
4. Not having a waiting list of trusted donors
The majority of the successful crowdfunding campaigns reach their financial goal in the first two days of the campaign launch. The best thing you can do is have a waiting list of trusted donors who back your project within the first minutes of its launch. They will be your early adopters, people who will motivate the more hesitant observers to back you as well. – David Henzel, MaxCDN
5. Only talking about what you’re making
Too many projects just say what it is they are making, but don’t connect it to the value or solution their audience wants. You must spell that out specifically in your presentation with words, visuals and video, hammering it home. Focusing on product features only doesn’t cut it and reduces the likelihood that you will meet your goal. – John Rampton, Calendar
6. Not communicating with pledgers
Your pledgers will feel like they’ve been swindled if you don’t keep in regular contact with them. They’ll assume you took their money and ran. You need to send them updates, let them know where the project stands, how much progress you’ve made and, of course, how the final result went. This will keep them engaged and reassured that you’re going to deliver what you promised, like perks. – Ismael Wrixen, FE International
7. Not cleaning up typos
It’s a seemingly innocuous problem that can turn a lot of people off. You must remember that people will be giving you money to support your project. If you are unprofessional in any way, they may feel you’ll prove unreliable in other ways. Don’t give people an excuse to not give you money. And although each campaign page will have its own definition of perfect, it better be polished. – Thomas Smale, FE International
8. Not including videos
Videos are an essential part of any campaign. The subject might be the impetus of the campaign, a description of what your business does or something else. Be sure to include them — it should improve your success rate. – Andrew Schrage, Money Crashers Personal Finance
9. Overpromising on things you can’t deliver
Don’t promise prizes and perks if you might not be able to deliver. It’s natural to want to get people excited about your project by offering great perks in exchange for a donation, but when you’re coming up with your offers, make sure that you will realistically be able to give them out. – Rachel Mendler, The Veloz Group
10. Offering too many options
When planning your campaign, you may be tempted to offer a bunch of different backer levels or rewards in order to make sure there’s something for everyone. But each option is a new level of complexity, which drives up costs. So far, I’ve found the most success to be around five reward levels. You can always offer customization or add-ons for an additional fee after meeting your funding goal. – Thursday Bram, The Responsible Communication Style Guide
11. Overdoing it with hype
It’s natural and healthy to be excited about your idea and shout about the benefits. At the same time, if you want to be taken seriously, don’t overdo it with hype. Describe your project realistically, focusing on what makes you different and why customers need it. You don’t have to convince people that you’ve created the next Google or Facebook. – Kalin Kassabov, ProTexting
12. Being greedy
Avoid being greedy when it comes to picking the goal amount for your Kickstarter. Nothing will ruin the credibility of a promising project more than a creator who is asking for far more than the project should reasonably take. – Matt Doyle, Excel Builders
13. Not having a PR strategy
Give influencers in your niche a sneak peek of the crowdfunding video so they can start writing about your product ASAP. If possible, send some influencers a beta version or prototype so they can test it out and increase social validation. Have a PR strategy throughout the campaign, too. Find meetups and conferences in your industry where you can attend, network and showcase your project. – Jared Atchison, WPForms
14. Relying solely on crowdfunding
Many founders try to get the entire funding from crowdfunding, which is not the right approach. You should have some of your personal and internal investment, and then seek one portion from crowdfunding. This will help you be less demanding on crowdfunding portals and prove more credibility. A combination of crowdfunding, personal investment and angel investment will spread your risk. – Piyush Jain, SIMpalm
15. Miscalculating the true costs of crowdfunding
Some brands begin crowdfunding without even understanding what costs are involved, from transaction fees to the shipping of physical products. This puts you under a lot of pressure to raise more funds for your project than you originally set out to, which can be a difficult proposition, depending on the marketing power you have behind the campaign. – Erik Bullen, MageMail
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