At JWD, we’re always interested in how startups can best share their ideas with the community. We know that the current trend lies in crowdfunding. As crowdfunding gains in popularity, the battle for page views and pledges has become increasingly competitive, especially on portal sites that feature thousands of live projects at once. If you’re depending on hope and the fact that your mom likes the idea, then you could be in trouble.
Did you know that nearly 70% of all crowdfunding campaigns that are launched don’t actually reach their minimum funding goals? Typically, if you only reach a portion of your desired pledge amount, all donated funds are then returned to investors once your campaign end date arrives. In other words, in most cases, it’s all or nothing. So it’s in your best interest to really do your homework and make your fundraising campaign count.
So how do you ensure that you’ve optimized your campaign for success? We’ve taken a look at a number of recently funded projects in order to identify some of the techniques, strategies, and crowdfunding secrets that will give you the best chance of meeting your goals.
- Prepare like it’s an obsession
You can use crowdfunding to help validate ideas before they are fully realized, but if your campaign comes across as half-baked then your audience isn’t going to invest. People don’t want to back a campaign that’s not going to work. You can’t use crowdfunding as a shortcut to avoid properly planning out your ideas, or doing the planning for you.
Look at it this way: you’re attempting to convince total strangers to invest in your idea. Some of the people who fund your project may very well be friends or family members, but a large portion of pledges will come from investors you’ve never met before. This is one of the many reasons why you really need to prepare your campaign long in advance. The last thing you want to do is go in blind. We can’t stress enough the importance of thinking your pitch through from all angles before taking that first step.
For example, finances are a big part of what fuels a company and whether it keeps going or not. Managing your finances is just as important as raising capital through a crowdfunding site. Have you asked yourself where your revenue will go once it’s generated? That’s just one question 9 out of 10 investors will want an answer to before they whip open their wallets. You need to have these answers well in advance in order for your startup idea to be taken seriously.
- Pick the right crowdfunding site
There are countless different crowdfunding sites out there all across the globe, and the number is constantly rising. This means that more people than ever are trying to create a startup or project that stands out from the rest. This is why it’s important to do your homework and select the right one just for you and your particular project. Some of them are just general crowdfunding sites geared towards all types of categories, while others are geared towards specific types of campaigns. There are sites for startups like hobbyists, artists, filmmakers, musicians, game developers, app developers, and more.
- Own your strategic social media
Everyone is using social media as a marketing tool these days, so having a well thought out social marketing campaign is a great way to create or maintain buzz around your idea. You don’t need a blanket presence on social media, though the wider your reach, the better. Pick the networks that best match your marketing and content strategies and where your potential supporters are most likely to be found. It takes less than five minutes to plug a link on Twitter, Facebook, and Google+ (but don’t discount the value of guerilla marketing like posting ads on trees throughout your city to get the locals involved).
Don’t forget to customize your promotion to suit each platform too. For example, indie band Bigtree Bonsai raised $6,956 — almost double their target — via IgnitionDeck after spreading the word with a #letsmakearecord hashtag.
If you aren’t an expert when it comes to generating traffic or don’t have a large following, don’t worry. Writing catchy and effective text to draw attention can require a certain level of creativity, but if this is not exactly your forte there are social media marketing services available for startups and small businesses too.
- Produce a great video
Video clips give visitors a better idea of your project because they can see you or your product in action rather than clicking through a series of static images. However, videos are known to be labor-intensive, so don’t attempt to put together a clip if you don’t have the time, resources, and expertise required. An amateur-looking video isn’t going to convince anyone to get involved, and could even damage your campaign’s credibility. Using free services such as Vimeo and YouTube for example you can leverage the power of video marketing and take your campaign to the next level.
Professional and engaging videos are a great way to express what your startup company is all about in a way that plain text on a screen could never do, so it’s usually well worth paying for help to make your video pitch the best it can be. A stunning video is a great investment because it’s a way to show investors that you have good initiative and well planned execution. Anything you can do to prove and convince investors that their money won’t go to waste is a good thing. If you took the time to make a quality video to promote your product, this will reflect positively on your overall campaign.
- Create a helpful media page or website
You’ve no doubt seen some of the most popular crowdfunding projects covered in the press, but this won’t happen if you don’t have a solid website and some press materials that journalists can download. Even if you’re a one-man show, don’t rely on your Facebook page to do it all. If journalists can’t find more information about your project and some high-resolution pictures to illustrate their features, they may choose to promote a different project instead. If you have grander plans, you can even think about press releases and tours. Many larger campaigns included a press tour before the crowdfunding element was even launched.
- Don’t ask for money immediately
This tip might be controversial to various experts, but it’s been shown again and again that if you tell your story and share your enthusiasm for your project, people will naturally want to add their support. Remember that your supporters are giving you money with the expectation of getting something back: they want to receive a return on their investment, whether it’s a physical product or an emergency relief operation that swings into action. Shows the benefits and value of your idea up front, so backers know what it is they’re supporting. It’s also important to make sure the backer can invest as much or as little money as they like.
- Build interest before you start
By knowing and understanding your target audience, you can better spend your time and effort creating a good pitch or campaign. Be sure to do good research on this subject, as it really is an important part of getting your idea off the ground. Being able to relate to your target audience is a necessity, so even before you launch a crowdfunding campaign, you can drum up interest in your project or your business.
With a solid fan base in place, your campaign will get off to a good start. A famous example would be Adam Baker, and how he leveraged the active following on his Man Vs. Debt blog to help his I’m Fine, Thanks documentary to reach its goal with over 4,000 backers. If you don’t already have a community to tap into, try and get the attention of a handful of local influential figures who might be interested in your project.
- Communicate often
Whether it’s good news or bad, keep your backers and potential backers in the loop. Post regular updates on your crowdfunding page, and keep the process going after the campaign has ended. Frequently stay on top of your campaign, check the status often and never leave people hanging when they ask you questions. No matter how simple a question may seem, it’s critical that you treat all potential investors with equal honesty, courtesy, and respect.
Certain questions may sound silly to you, but to someone else, having the answer could determine whether or not they decide to fund you. Also, be prompt. Obviously you can’t be glued to your computer, but the quicker you respond, the more you promote your campaign. By being actively involved in your campaign, you are raising your chances of successfully reaching your desired funding amount sooner (or at all).
- Keep it personal
Let your backers know your story and how your product and team fit into it. Consider the humor and personality of your crowdfunding campaign, and connect with your backers. Your story could easily make or break your crowdfunding campaign so it needs to be compelling. The key here is to truthfully explain your campaign and what it’s all about in the most engaging way possible.
You don’t necessarily need to be a novelist or marketing expert to achieve this, you just need to be knowledgeable and passionate about your idea and it’s purpose. Make your story captivating and explain to people why they should consider investing in your idea over the thousands of other new ideas that are out there. Make sure you’re answering the question: Why does your idea stand out above all the rest? And make sure your answer and product is creative and unique enough to stand out.
- Offer awards and incentives
You can create a campaign that has broad appeal at the same time as paying special attention to your existing supporters. One of the best ways to do this is by creating a reward scheme with many different price points. Even if you can’t offer a physical reward for a $1 donation, you could still give these pledgers early access to your product or a credit within your software package, for example.
With rewards ranging from $1 (for, perhaps, behind-the-scenes updates) to $5,000 (for, maybe, an educational seminar in your community) you can allow your pledgers to get a return on their investment. Being creative about your rewards is another way to drum up interest in your campaign. It is essential to let your investors know that you appreciate their support. Offering incentives a great way to thank backers and show that you really are grateful for their investment in your project.
Our suggestions for you are not difficult. But, as in anything, practice makes perfect, and crowdfunding is no different. So go and back some projects, watch a ton of project videos, read a lot of body copy. Check out other projects that were successful in your category, use the ideas that you like, and drop the ones that you don’t. Make your campaign as inviting and polished as you can, and then go from there. There’s no way of guaranteeing crowdfunding success, but by studying the projects, strategies, and crowdfunding tips we’ve shared today, you can certainly maximize your chances.
If you are still stuck on your crowdfunding campaign, consider asking JWD to help! JWD has worked with numerous startups and entrepreneurs from across the world, helping them execute their idea from running successful crowdfunding campaigns to launching their product or idea. To start a conversation about your startup, contact JWD today!read more