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Key to CrowdFunding: 10 Tips for a Successful Launch

Key to CrowdFunding: 10 Tips for a Successful Launch

01.26.2015

These days, anyone with an idea and a bit of gumption can launch a crowdfunding campaign.

Or can they?

There have been successful crowdfunding campaigns for projects as varied as bringing back “Reading Rainbow”  and making potato salad.

The COOLEST is the highest-earning Kickstarter campaign to date, earning nearly $13.3 million for a “portable party disguised as a cooler, bringing blended drinks, music and fun to any outdoor occasion.”

Oculus Rift, recently acquired by Facebook for $2 billion, is another Kickstarter success story: Its initial campaign raised $2.4 million.

Worldwide, crowdfunding raised $2.7 billion online in 2012 and $5.1 billion in 2013. Numbers are still out on 2014, but the method of raising funds has shown no signs of slowing down.

When it comes to launching a crowdfunding effort, the task can seem at once easy-as-pie and insurmountable.

Adding to the confusion, there are a number of platforms to choose from: Kickstarter, Indiegogo and Fundable are a few of the biggies.

Have a great idea and no clue where to start?

First of all, an understanding of what crowdfunding offers is crucial — and it’s not free money.

CrowdFunding websites allow backers to pledge support for a project they want to see succeed. Campaign success and business-owner responsibility go hand in hand.

No matter what the business, having a game plan and setting goals are important first steps.

That’s where these guys come in.

  • Mike Sarow, CEO and co-founder of Kapture, launched his business equipped with nothing more than a blank slate and a vision. After a successful Kickstarter campaign, Kapture, an audio-recording wristband device with an accompanying app, is set to launch production before the Chinese New Year on Feb. 14.
  • Co-founder Natalie Mathis and co-founder and CEO Quincy Robinson of 3DKitbash.com found a niche they knew would challenge them, and dove in. 3DKitbash makes toys and test kits for consumer-level 3D printers. 3DKitbash has had six successful Kickstarter campaigns, and is launching a seventh, Monster Mascots, on Jan. 28.
  • Konrad Billetz, co-founder and CEO of Frameri, a smarter, better way to buy glasses, knew that he wanted to start a business, and met Frameri co-founder and head of web Kevin Habich on “startup dating website” foundertobe.com.  After a successful Indiegogo campaign, Frameri was born. Billetz was recently named to Forbes’ 30 under 30 2015 in Manufacturing & Industry list. 
Billetz, Mathis, Robinson and Sarow have all been in the crowdfunding weeds and successfully emerged on the other side, with different approaches in three vastly different industries. Here’s their best advice:

Find the right platform

When Sarow first started developing the idea for Kapture, he realized it was a whole new benefit space. 

“We were tackling a piece of hardware, and a complex app. We went on Kickstarter to purely say ‘Will you buy this?’”

Kickstarter’s a great fit for tech hardware, according to Sarow. “It has the largest audience, and is the market leader in terms of eyeballs.”

Billetz and Frameri co-founder Habich agree that Kickstarter is the best in terms of reaching the largest possible audience, though they ultimately raised funds with Indiegogo, as they weren’t allowed to use Kickstarter due to a loophole regarding eyewear and medical devices.

“The worst thing about using Indiegogo is that we 100,000 times would’ve preferred to use Kickstarter, but it wasn’t available to us at the time,” Habich said. “If you qualify, use Kickstarter. Their platform means more eyeballs.”

Understand your business

CrowdFunding takes a business from the point of being an idea to knowing it’s a product that people will buy.

For Frameri, they needed that leverage to show traction while raising capital. 

“When you’re creating a product that you know is going to be capital-intensive, at least for us, if we went to raise money, we would have had a horrible valuation at (the beginning),” Billetz said. “We wanted to prove that we were able to get traction and get customers. Once we were able to prove that it just helped the fundraising process to eliminate that risk somewhat of acquiring customers.”

Plan, plan, plan

Have everything prepared well before the campaign launches.

“We had people in 11 different cities prepared to talk about our product the day it launched," Sarow said. “We had press releases prepared, our social media entities up and running to talk about the product and amplify the messages.”

Making sure that all expenses are factored in so your campaign doesn’t end up costing you money is important.

“Planning is key,” Mathis said. “If you have something that you have to mail, make sure you factor in the costs of mailing and packaging.”

One of the biggest mistakes 3DKitbash made early on was mailing items, according to Mathis and Robinson.

“The whole point of what we do is digital, so we never have to restock, we just send files out to people. Our first campaign, we included embroidered patches as our very base level of donations, so everybody ended up getting these patches,” Mathis said.

“What we didn’t consider is that we would be shipping to 30 countries. And patches, sure, they’re little and can go into a little envelope, but just writing out the addresses — that’s a nightmare.”

Billetz agrees that lots of planning is key.

“Don’t rely on the platform to do it for you. We had started making connections with the people at Indiegogo prior to us even launching,” Billetz said. “We were already working, asking questions like ‘How do we make the email list, featuring new products on Saturday?’”

“We were getting as far as we could in understanding how to make the product without actually having to make it. There’s a lot of products that you can really understand the finances before you get into it,” Billetz said.

The last thing you want to do is raise a bunch of money and then not have enough money to launch your product.

“Most people start setting up their campaigns three to six months ahead of time,” Billetz said. “For us, we launched a big international design contest before to build email lists, and to build awareness about what we were going to do. We were getting 30-40,000 unique page visits the month before we even launched the campaign.”

Just dive in

Taking a deep breath and taking that first step may seem simple, but it’s often the hardest.

“Get past the fear of what people will think, and shoot a video, and launch the Kickstarter,” Mathis recommends.

According to Robinson, you’ve just got to dive right in. “A good friend once said, ‘Do 80 percent and move to the next thing,’” Robinson said. “With getting a Kickstarter going, get it out, get it moving.”

Don’t be afraid to ask dumb questions

It seems intuitive enough: Ask people that know what they’re talking about to get the information you need.

According to Noel Gauthier, head of design at Frameri, their biggest resources were the internet, and “asking dumb questions to people that know what they’re talking about.”

“From setting up the business, setting up the supply chain and finding manufacturers — for us it was really the internet and hustling and going around and asking dumb questions and figuring out stuff on our own,” Billetz confirmed. “None of us are industry experts in eyewear.  We taught ourselves everything.”

Think outside the box

According to Robinson, the best thing about Kickstarter is that it’s essentially a pre-order system, which helps 3DKitbash pay for manufacturing. “We’re not producing anything that is not funded,” Robinson said.

“Backers are supporting the process. You’re not committed to spending energy on an idea that’s not a great idea if you don’t want to.”

“Being a small business, it’s helped us pay for our research and development,” Mathis said. “There are hundreds of hours that go into sculpting one of our figures, and then there’s the printing, and a failure or maybe a tweak, and those things have to be redeveloped. For us this has been a way to fund and have positive cash flow that keeps us steady as a startup.” 

Communicate with the customer

Feedback is the best part of using Kickstarter, Sarow said.

“We were naive and ignorant that Kickstarter would provide so much valuable feedback. We had over 2,000 interactions back and forth on Kickstarter’s internal email system that’s private, and also well over 300 public messages back and forth among backers and potential backers,” Sarow said.

“It can help you decide whether you want to respond to suggestions or not.
We designed the clip-on feature to place the product elsewhere other than the wrist — that came purely out of Kickstarter, from our backers,” Sarow said.

“We work hard to make the best possible 3D printing experience we can for people,” Robinson said. “We’ll go to the ends of the earth to try to make people happy.”

Maintain relationships

After winning over a customer base with a crowdfunding campaign, it’s important to maintain that relationship.

For Frameri, that meant the introduction of a “Give $50, Get $50” campaign. For every friend that is referred from a current Frameri customer (with a $50 promo code) and purchases glasses, the referrer is also compensated $50.

“Customers like to share us, and we want them to benefit when they do,” Billetz said. “It helps people spread your message. With us, once people try it, they love it.”

Present your best self

Any time a business operates online, trolling becomes a distinct possibility, and can really hurt a business.

“No matter what you do, there are always going to be people who are for your project, and against your project,” Robinson explains.  “With Kickstarter, because of the community set up, you’re unable to cover trolling. You can’t remove it. That can get a little bit… can make your hair stand on end a little bit. I’ve seen it and it’s a scary thought. We’re very careful about how we present ourselves and come across as well as we can.”

Give it your all

Having passion behind your product is key.

“Our product is absolutely nothing unless you pay attention to people,” Sarow said.

“The ultimate reason why I am so into the idea of Kapture is that I like to listen to people. This gives me the ability to save snippets of that throughout the day. Other people will use this for inspiration-- artists and musicians have said that, ‘Hey, I get inspired by my bus ride to work.’”

“This product is a nod to the notion of having real conversations with people, and amazing things will happen.”

CrowdFunding embraces the same notion: Listen to people, and let amazing things happen.

Article cited from: http://goo.gl/uJ8QTA