It’s hard to think of an innovation that has had a more transformative impact on the business landscape than the rise of crowdfunding.
Once upon a time, the only people who could bring new products to market were the ones who already had the capital and connections to make it happen. Now, thanks to crowdfunding, anyone with an idea and an Internet connection can mount the next big crowdfunding campaign – and the next must-have product can come from anywhere.
But crowdfunding campaigns aren’t (just) a fast track to capital or product validation. A successful crowdfunding campaign is a marketing project, just like any other marketing project your company might undertake. It takes strategy, planning, and, above all, effort to make it a success.
At Startups, we’ve seen our fair share of startup crowdfunding successes come through our own business crowdfunding platform, Fundable. But we wanted to get some fresh perspective on the makings of a successful crowdfunding campaign, so we reached out to an all-star panel of crowdfunding experts:
Jason Leo Carvalho, award-winning entrepreneur- turned investor who has been crowdfunding since 2013 via his agency @TheCrowdFunder
Ryan Chaffin, who followed up his own successful six-figure campaign by helping over 100 crowdfunding projects successfully pass their goals.
Justin Massion, who has raised over $750,000 via crowdfunding for clients including Space Command ($222K) and GetStuckInTheaters ($150K).
Jason, Ryan, and Justin joined us to dive into what makes the most successful crowdfunding campaigns tick. The answer: A good story, a great product, and a whole lot of work.
One of the biggest misconceptions people have about startup crowdfunding: that crowdfunding is supposed to be easy. There’s this idea out there that you can just throw a crowdfunding profile together in 10 minutes, post it, and within hours backers will be breaking down your door and breaking out their wallets ready to turn over their money.
But the reality of crowdfunding is very different. There’s no mythical built-in community of backers who just sit on Kickstarter all day hitting refresh and looking for new projects to back. The only way to make sure your profile gets traffic is to drive it there yourself. And that takes a ton of work.
“Surround yourself with people who are good at what they do, and are committed to putting in the time to help.”
In fact, it takes so much work, some companies assign dedicated team members or even a whole group of people to just do crowdfunding for as long as the campaign lasts.
Regardless of whether a dedicated crowdfunding task force is in the cards or not, you’re going to be leaning on your team a lot to make your campaign a success. “Your team is by far the most important tool,” points out Justin Massion. “Surround yourself with people who are good at what they do, and are committed to putting in the time to help.”
Another common mistake people make while crowdfunding: waiting until their profile is already launched and live to start figuring out the next step.
If you wait until your profile is already live to start planning how you’ll get funding, you’re already too late. As Ryan Chaffin points out, “It’s all about the preparation. Your campaign’s success is decided there.”
“It’s all about the preparation. Your campaign’s success is decided there.”
How much lead time does a successful crowdfunding campaign take? “I usually shoot for 60-90 days of prep,” says Justin Massion. “And it usually ends up closer to 90.”
As for what you and your team should be doing the weeks leading up to your campaign’s launch? Drafting (and redrafting) your profile (more on that in a minute) and putting together a kickass campaign video, sure. But you should also be drafting email newsletters to send to your personal and professional networks, securing early commitments from friends and family, reaching out to potential partners and press contacts.
In short, you should be doing everything in your power to set your crowdfunding campaign up for success before it ever launches. Once your profile goes live, it’s a mad dash to the finish line, and there’s no time for big strategic shifts. So make sure you’re laying the groundwork and getting your proverbial ducks in a row far in advance of when your campaign goes live.
We’ve mentioned that one of the big reasons startups turn to crowdfunding is to drum up sales. In fact, it’s not uncommon for people to use the words “crowdfunding campaign” and “pre-sale campaign” interchangeably.
A lot of aspiring crowdfunders take the idea of “crowdfunding = pre-sales” to a little too much heart. They draft their campaign page just like they would product page. But crowdfunding isn’t Amazon. You have to do more than throw up a picture of your product with a list of features and a button that says “Buy now.”
Remember that you’re asking customers to turn over their hard-earned cash for something that doesn’t even exist – and may never exist. That’s a much bigger ask than buying a product that will get shipped to them in three days – and it takes a much more powerful message.
The best crowdfunding campaigns don’t just sell a product – they tell a story. They appeal to backers’ emotions, capture their imagination, and make them feel like they’re making something awesome happen.
Some surefire ways to do that:
Successful crowdfunders introduce themselves as a company trying to introduce a new product – even if that’s what they are. They focus on the human aspect of their story – on the people behind the product. Introduce your team and let their passion for the idea shine through – it’s an awesome way to help backers feel emotionally invested in the success of your product.
The people who support crowdfunding campaigns tend to be process nerds. They may be tinkerers themselves, or just fans of innovative products. They like to see how things work – so leverage that curiosity in your profile. Behind-the-scenes photos, schematics – all of these can be awesome additions to help spark backers’ imaginations.
And we don’t just mean buying a product. Tell backers exactly what the money will allow you to accomplish – whether that’s adding a new feature, improving an aspect of your design, or expediting the whole product development process. People who support crowdfunding campaigns don’t just want a what – they want a why. And they’ll be more likely to support you if they feel they’re giving value as well as receiving it.
Startup crowdfunding is an iceberg: the profile is just the 10% you see above the water.
The other 90% is all the work you put in around the profile in order to boost the signal and drive traffic to your page – and that means outreach, outreach, outreach.
There are three main groups you should be lining up for outreach ahead of your campaign going live. Call them the three Ps of crowdfunding outreach: Press, Partners, and Personal Network.
This includes existing customers, if you have them, plus friends, family, alumni networks – anyone and everyone who might have a personal connection to your team or your product.
Partners can be literal business partners, but it can also include other groups, such as organizations and influencers who might share your campaign with their followers.
Of the three “Ps”, press is definitely the most key. “My most successful crowdfunding campaigns have had a serious amount of traffic from PR,” observes Jason Leo Carvalho. “While we relied on traffic from social media channels, Product Hunt, Thunderclap etc, I would do a 70 day pr tour pre-campaign launch and embargo 30 PR outlets – major outlets, blogs, and influencers – and the vast majority of our traffic would come from that.”
As a reminder, your pitch to these groups needs to be more than “Yo, here’s our crowdfunding campaign – please back/share!” As with the profile itself, it’s important to lead with the “why.” Tell your contacts why you’re sharing the page with them – and what’s in it for them.
Fast forward to the end of your crowdfunding campaign. Say you’ve crossed the finish line. All of your outreach went off without a hitch, your audience is energized and excited about your product, and you completely blew your initial goal out of the water.
Time to high five, break out the beer keg, and celebrate – right?
Sure, but when the celebration is over, make sure you and your team are ready to get right back to work.
Believe it or not, once you cross that finish line and see the “Funded” checkmark next to your company’s name, the real work of crowdfunding is just getting started. Because now you have to do the work of actually delivering on your promises to backers.
And make no mistake – that’s harder than it sounds. The crowdfunding landscape is a veritable ship’s graveyard of crowdfunding “successes” that raised hundreds of thousands and in some cases millions of dollars from backers, only to tank spectacularly because they couldn’t deliver on what they’d promised.
“One year is a lifetime in a crowdfunding campaign launch.”
The best way to keep your company from joining that list: “Have a plan for fulfillment before you ever launch the project,” says Ryan Chaffin. That means knowing where you’ll be manufacturing, how much production will cost, what operating expenses you’ll have to deal with – and when you’ll be shipping rewards to your backers.
See what we mean about planning?
As for how soon you should you aim to ship to backers: some sources claim you have up to a year, but don’t kid yourself: “One year is a lifetime in a startup/crowdfunding campaign launch,” Jason Leo Carvalho says.
A better benchmark to aim for: 3-4 months – 6 at the outside. But whatever delivery timeline you promise in your campaign, the most important thing is to stick to it. “Do everything in your power to deliver on time,” says Ryan Chaffin. “Be conservative with your delivery dates up front. Better to deliver early, than late.”
As we mentioned above, it’s important to hit the ground running the moment the campaign closes.
Jason Lee Carvalho runs down a few of the steps you should take as soon as you hit “funded”:
“Migrate all customers to Mailchimp right away, and keep track of users on a SKU level basis,” he advises. “Direct message them via the platform, email, and Facebook. Create a private Facebook group for real-time communication. Use tools like DESK.com to begin to breakout customer support tickets.”
And finally: “Track,” Jason says. “The hardest part about all of this is the data: moving data from Kickstarter to Shopify to your Ops & shipping teams.”
If this sounds like a full-fledged operations project, that’s because it is – and lots of young companies are unprepared for that fact. “Most startups fail at crowdfunding because they lack Ops experience,” Jason observes.
That’s an insider tip: if you want to ensure your team’s success on the backend, make sure someone on your team has the Ops side locked down cold.
Long story short: what happens after your crowdfunding campaign ends can have real consequences for your brand down the road. If you overpromise and underdeliver, those consequences can be devastating. So be ready.
When you’re in the crowdfunding trenches, trying to drum up support from as many backers as you can, it can be easy to neglect the backers you already have – but do so at your peril.
The people who back your crowdfunding campaign – the people who are willing to part with their hard-earned cash because they believe in your company and what you’re building – they are your campaign’s most valuable asset – and, by extension, your company’s.
“These are your friends. Don’t treat them as customers or clients. They are believing in your story.”
Jason Leo Carvalho puts an even finer point on it: “These are your friends. Don’t treat them as customers or clients. They are believing in your story. Treat them with the highest communication.”
That highest communication starts from the moment someone backs your campaign.
“I send thank you messages to every backer through the platform’s messaging system,” says Justin Massion. “In it, I ask for their Twitter handle so we can thank them publicly on Twitter. Also, you can post special thank yous at the bottom of your backer updates.”
Done well, a crowdfunding campaign does more than raise money: it forges a powerful connection between your brand and your audience. “Build a personal relationship with as many backers as you can,” advises Justin Massion. “They’ve already spent money with you, so they are more likely to do it again in the future – especially if you show an extra level of care and value.”
There you have it: the ingredients to a kickass crowdfunding campaign. Do the work, have a plan, tell a story, and build community around your backers and their enthusiasm for your product.
Like any other aspect of your company, you get out of crowdfunding what you put in. Put in creativity, authenticity, and effort, and you’ll get out engagement, excitement, and, yes, funding.
“My Holy Trinity of Crowdfunding is DESIGN, CREDIBILITY, OUTREACH,” says Justin Massion. “If you can master those 3 you’ll be good to go.”
We’d like to suggest a fourth addition to Justin’s trinity: PASSION. Never lose sight of why you’re raising money to begin with. Let your passion for your project shine through. That’s the true common denominator that all successful crowdfunding campaigns are made of.
Got an idea that’s ready to crowdfund?
Head over to Fundable to get started on your profile today.
Need to brush up on your PR skills ahead of your campaign launch?
Let Julie Crabill take you through the basics of Early Stage PR.
Want some expert input on your crowdfunding campaign?
Get mentorship from crowdfunding experts over on Clarity.