August 1, 2017
Once a novelty act reserved for indie band albums and curious art projects, crowdfunding is starting to play a major role in the world of startups and new products. The appeal is obvious: crowdfunding lets creators and entrepreneurs raise money directly from their community and potential customers, and unlike the traditional approach of funding through VCs and investors, crowdfunding money is truly no strings attached.
The interest is well-placed. Projects on Kickstarter alone have raised over $3 billion, and the market only gets bigger as more consumers familiarize themselves with how to execute a campaign, but you need to know what you’re doing.
Rule #1: It’s All About Preparation
Generally, when you see a crowdfunding campaign, it looks like most of the work happens during the 30 or so days that the campaign is running, but that’s not even the half of it. A successful, well-executed crowdfunding campaign takes months of preparation. In fact, the majority of your work should be finished by the time you start your campaign.
“What most people don’t realize is that half of the battle happens before you even start your campaign,” says Eddie Lee, founder of Podo Labs and crowdfunding veteran who’s helped raise over $8 million on Kickstarter. “Doing the legwork ahead of time is critical to having a strong launch and a successful campaign.”
In today’s crowdfunding environment, you need to put in the work ahead of time if you really want to win.
Rule #2: Launch Day is Priority #1
The day you launch your campaign sets a precedent, and the momentum you achieve on that critical first day will impact your success for the rest of your campaign. Do everything you can to open with a bang: the more ground you can cover on launch day, the more likely you’ll be to meet and exceed your goals.
Rule #3: Do Your Homework
There’s a lot of opportunity in crowdfunding, but the market is more crowded now (no pun intended) than it ever has been. To succeed, you need to know the ins and outs of running a successful campaign like the back of your own hand. You can and should study on your own, but taking something like a crowdfunding course is the best way to give yourself a leg up on competition and truly run a successful campaign.
Rule #4: Prove Yourself
Keep in mind that when someone donates to your crowdfunding campaign, they’re taking a bet on you and they’re trusting you to use their money wisely and deliver on your promises. Accordingly, you need to provide proof that you are who you say you are and that you have the talent to get the job done. Your campaign page should clearly highlight your track record, what you’ve already put in place to make your vision a reality, and why you are the one with the skills for the job.
Rule #5: Keep Engagement Constant
Backers aren’t like traditional customers, they’re joining you because they want to be involved on the journey with you. Keep them updated regularly with frequent email updates, livestreaming updates, and constant posts on your social media accounts. Shepherding your community of backers is one of the most important parts of running the campaign.
Rule #6: Let No Comment Go Unanswered
The comments section of your campaign page is where you really prove your metal to backers. Address as many comments as you humanly can, and whenever possible, respond to commenters by name.
“Honestly, backer management is priority number one for any campaign,” says Ben Lee, cofounder of Neon Roots and a key part of the crowdfunding team that raised $2.5 million for Superscreen. “You’re going to get a lot of questions and even some haters, and it’s crucial to be on top of that as much as possible.”
Addressing comments like this not only helps quell backers’ concerns, but it also shows the community that you’re a responsible creator who’s committed to keeping backers happy.
Rule #7: Prepare for the Long Haul
The 30 days of your campaign may be the most exciting part of the crowdfunding experience, but it’s far from over after your campaign closes out. If you hit or exceeded your funding target, you still have a responsibility to keep backers updated and engaged throughout the production and next steps of your product.
“This is one of the biggest lessons we learned in our campaign,” says James Shamsi, who spearheaded Project LUCY. “You need to think beyond just the 30 days of the campaign – we ended up canceling and relaunching our campaign even though we’d already been funded, and we couldn’t have made that decision is we hadn’t been thinking long-term.”
Your backers took a bet on you because they believed in you – so you owe it to them to keep them in the loop and deliver.
Crowdfunding Is Powerful – Consider Trying It
While there are inherent risks, if you really do you research, learn as much as you can about how to structure and manage a successful crowdfunding campaign, and execute consistently on your plan, you can raise serious money through crowdfunding your next product or venture idea. Who knows – with a good idea, some know-how, and a lot of hard work, crowdfunding might just be your ticket to making your dream into a thriving business.
Learn more tips about executing a successful crowdfunding campaign at TechCo
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