February 4, 2014
Last week, Startup Grind DC held a fireside chat event at nclud with SmartThings CEO and co-founder Alex Hawkinson. Aside from talking about his hopes for the DC tech scene and praising the area's vast resources that encourage tech startup growth, Hawkinson spent some time speaking to the audience about his philosophy when it comes to startup capital and what it takes to run a successful crowdfunding campaign.
Hawkinson certainly has some authority on running successful crowdfunding campaigns. Back in 2012, SmartThings raised over $1.2 million dollars through its Kickstarter campaign, meeting over 480 percent of its $250,000 fundraising goal – this makes it one of the crowdfunding platform's most funded and most successful campaigns, and only a handful of projects have raised over a $1 million. What's even more surprising is that SmartThings' campaign was really more focused on building a community of developers, device makers, and other technologists around its open platform, rather than actually raising funds.
So what makes a great Kickstarter campaign, and how can other people implement their own? According to Hawkinson, the key factor is user engagement. Here's what he had to say about running a successful crowdfunding campaign:
Engage with the Audience
“I think the reason a lot of Kickstarter and Indiegogo campaigns fail to deliver is because it's so overwhelming. If you're successful, the whole community wants to talk to you, and if you don't respond [to the audience throughout the duration of your campaign], you're screwing yourself,” said Hawkinson. According to him, the most important thing is to actively engage with your campaign audience. He recalls the moment when they posted one campaign update and received 2,000 comments in response; it took them four full-time people to respond to each and every comment. Engaging with people not only prevents public backlash, but it also rewards you with people who can really advocate your behalf and further your campaign.
Capture Influencer and Media Attention
“You gotta capture some media attention or other things. Which, we got CNN pick us up four or five days in, then it all started snowblowing from there.” Through their engagement efforts, SmartThings was somehow able to connect with David Tisch, who is one of NYC's top angel investors (something – Hawkinson admits – he didn't learn until after Googling him). After Tisch gave a lead to CNN on what the company was trying to accomplish, things really picked up. In order to really get your campaign moving, you need to capture attention from media and influential people. While SmartThings itself didn't have a list of these kinds of folks ahead of time, he suggests that having these channels ahead of time will really help push your campaign along.
Set Stretch Goals During the Campaign
Aside from setting up structured rewards (as is typical with most crowdfunding campaigns), SmartThings regularly added stretch goals. So, say, if this campaign reaches $50,000 we'll give everybody X or add these additional features. The lure of such additional rewards and stretch goals further allows you to engage with your audience, encouraging them promote your campaign to their various networks.
From the writing to the video, you have to ensure that your crowdfunding campaign is professional throughout. Not only does this provide you with added credibility, it also makes your campaign page prettier. For SmartThings, they made sure to invest a lot of professional hands-on helping to create their campaign video. “We really believed that we had something that was unique – we put a lot of energy into the video.”
Have a Powerful Idea
“You have to have a good idea, first of all. We were really lucky…But if you have a really bad idea, there's no helping you…it has to be a powerful idea.” In order to do that, Hawkinson suggests that you bootstrap for as long as possible and focus on developing a strong idea and improving on your product. For him, no crowdsourcing strategy can help a terrible idea or product.
Startup Grind DC provides a monthly meetup in the DC area, bringing together local founders, innovators, educators, and investors.
Did you like this article?
Get more delivered to your inbox just like it!
Sorry about that. Try these articles instead!