Crowdfunding has changed since the early days of Kickstarter in 2009. With over $5 billion pledged towards thousands of products, it’s become a powerful engine for makers who go on to acquire major funding and development opportunities. Crowdfunding is competitive, and a successful campaign requires careful planning and a launch strategy.
Looking at successful crowdfunding efforts – Trackr, Emberlight, or other classic examples like the Pebble Watch – you’ll see a formula around campaigns that raised six, seven figures or more. Crowdfunding isn’t just about having a great product; it’s about a solid plan for validating and promoting your idea – way before you ask anyone for money.
1. Test, test, test.
A lot of entrepreneurs, especially hardware startups, have an old-school attitude about product development – that you build your great idea, launch it with some fancy marketing, and everyone will love it. But the reality is, consumers are fickle and you’ll never launch a successful product without testing your market first.
You have to test everything: price point, design, landing page copy, and any other material tied to your project. One of the easiest ways to do this is by A/B testing all of your communications. Use a CRM or an inbound marketing tool that lets you publish numerous versions of any content. This will give you insight on what resonates with people, what to emphasize, and where the demand is.
2. Get emails like it’s going out of style.
When somebody cares enough about your idea to hand over their email – that’s validation. Aggregating emails is like getting a girl’s number: it means yeah sure, contact me. Emails are the same: someone checked out your site, liked it, and now they want you to contact them when you launch.
Obviously, people flake – that’s expected. So beyond accumulating addresses, you should also track word-of-mouth referrals by dropping everything into a spreadsheet. The referral metric helps you develop a growth rate you didn’t account for. Once you’ve created your landing page and decked it out with beauty shots, your unique sales prop and your marketing angles, start kicking it out to your list and tap into your networks’ network by doing a soft launch. But in the end, your core validation comes in the form of emails.
3. Be a club that people want to join.
No matter how many emails you get, it won’t matter much unless you communicate with your customer base the right way. As always, it helps to constantly research people’s preferences: Check out your competition on Product Hunt; reach out to communities on Reddit; ping contributors at Cool Hunting who might be interested in your idea. But internal outreach – within your backer community – is just as important.
Your relationship with your backers is the bedrock for your success, and you should let them know early on that you appreciate them. Establish a rewards system; create exclusive discounts and perks for longtime supporters; and make sure to foster a personal connection with your community. Respond personally to messages, and keep your backers in the loop – the little things count, and a sense of exclusivity can go a long way. Make your community feel they’re getting something that no one else gets.
4. Make a GREAT video.
If there’s one promotional tool that’s worth spending on, it’s an awesome video. Across Kickstarter and Indiegogo, you’ll notice higher-fidelity promotional videos among small, independent makers. Ride this wave. This is a reflection of what you’re asking them to do: open their wallets for something that may not be finished yet, that they haven’t held in their hands yet. In a sense, you’re selling them vaporware.
That’s why having a very well-done video is so important as a crowdfunder. It’s not just beauty shots of your prototype: You need multimedia that convinces customers that your product is so beautiful, useful or amazing that they don’t even need to see it in person to be convinced. That’s not necessarily easy, so it’s worth it to hire a professional.
5. Use performance marketing.
Understand your audiences that will convert and then spend the dollar, dollar bills on performance marketing. The press and that initial swell are going to die, and when it does, how will you get more people to your site? Using ads and analytics tools, test your audiences targeting Facebook, Pinterest, and Google to understand where people are coming from as well as which types of ads convert really well.
This will tell you more about how to spend your money. If you spend a hundred bucks, you want to make $300, not $30. Once you’ve tested your audiences you’ll know who you’ve sent ads to that converted by email. If you’ve done step one, then step 5 is just re-identifying them and refreshing your content accordingly. Go back to your original Facebook ad and swap it out with the link to your crowdfunding site. Drive them to that.
It’s often said that you learn from your failures, not your successes. But once you’ve done a crowdfunding campaign or two, you definitely learn from your successes. Mastering this formula is certain to get you results. These steps- research, validation, community engagement, etc. – are a barometer that tells you when it’s the right time to launch. If these factors aren’t in place, you are nearly guaranteed to fail.
But if you do the necessary prep work, you may find that you make a third of your money in the first and second day during the initial press push. From there, you reap what you sow: If people are happy, engaged, and interested, they’ll tell they friends and the halo effect – and additional funding – will flow steadily until you’ve left your original goal in the dust.