Philip McAleese, CEO and co-founder of See.Sense, shares his top tips for a successful crowdfunding campaign.
Over the years, I’ve had the pleasure of managing a series of crowdfunding campaigns, to raise money and gather support for our intelligent bike lights.
If done right, leveraging the power of the crowd can help your tech business go a long way.
With this in mind, I’ve put together some dos and don’ts of crowdfunding. Here they are:
Use crowdfunding wisely
Crowdfunding is unlikely to replace other fundraising efforts (even if you’re doing an equity campaign you’ll want to bring Angels or VCs into it). However, it’s a smart way to diversify your revenue streams, get exposure to new customers and build a community. In our campaigns we’ve been looking to get a) product feedback and b) product validation that we could show retailers and distributors.
Know what you want to get out of crowdfunding. If you’re only doing it for money then there are easier ways to raise capital.
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Have a clear message
Before your campaign goes live test your marketing messages with existing and potential customers to see what resonates. Use A/B conversion testing from digital ads, face-to-face sessions or feedback forms to check you’re using the right language, and avoiding buzzwords, to create your campaign message.
This is really important for the campaign video you produce. Worry more about the story you’re telling in it and less about the quality of production.
Some videos can look too professional and sleek. When that happens you often lose the passion for your story.
Look at what’s working
Crowdfunding platforms, the type of backers and investors on them, and consumer habits, are changing constantly. Do your research to see what people are responding well to.
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Look at projects you like, engage with them and build up your credibility as a project owner. Successful campaigns on your crowdfunding platform can be a great source of cross-marketing support.
Be clear on what you’ll do with funds
If you’re doing a rewards campaign think about all future costs so you’re not caught out. What are the platform fees? Who will do your fulfilment?
Whatever the outcome of the campaign, set clear landmarks and timelines and have a plan in place if you exceed your goal. Extra rewards, additional features or, if you’re doing an equity raise, additional company milestones.
Think of crowdfunding as a money pit
You don’t just head to a platform, launch your project and wait for the money to come in. Crunch the numbers… How many people who land on the page, watch your video or sign up during your pre-marketing phase do you expect to convert? How many need to convert if you’re going to achieve your fundraising target?
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People talk about campaigns needing to be funded by at least 65% within their first 48 hours if they’re going to be successful. If you’ve done the maths and don’t think you’ll get that then stop and have a rethink.
Think just about the first 2-3 days
Those first 48 hours are crucial. People like supporting projects that are doing well and early funding will create the momentum and validation you need to reach your target quickly.
However… Don’t just think about those first few days. You’ll have lulls in your campaign but the best projects find ways to keep the conversation going without saying the same thing over and over again. What stories can you tell once you’re funded? How can you get early backers to continue supporting the campaign (i.e. referrals)? Or, if the campaign is going slower than expected, how will you re-invigorate it?
Focus all your attention on digital marketing
Don’t spend all your time behind your computer. Get out there. Talk to your contacts. Go to events, speak at events, host events.
Your campaign shouldn’t be isolated from your day-to-day business, not least because it becomes your life 24/7. Make sure it’s integrated across everything you do.
Set large and unrealistic funding goals or delivery dates.
Crowdfunding is very public. Do the maths and make sure you have what it takes to hit your funding target. If you’re on Kickstarter or Indiegogo make sure you have a clear plan for delivery and factor in product delays so you don’t disappoint backers down the line.
Furthermore, don’t try to be too clever and over-complicate your rewards structure. It can just confuse potential backers. Keep it simple!
The above list is not exhaustive but one final comment…
Crowdfunding has proved to be a wonderful way for us to build our community and give us exposure to a wider audience. However, it isn’t easy. Crowdfunding is very much the beginning, not the end!