In case you’ve been on a desert island with no internet connection for the last 2 years, there’s a couple of new platforms making waves that can help you get your startup idea funded, followed and with a sizeable fan base. In this post I’ll be showing you how to run a successful Kickstarter campaign.
While both Indiegogo and Kickstarter have been around for a little while now, crowd funding platforms are still in their infancy. Even though the concept is relatively new, crowd funding still represents an amazing opportunity to publicise your business and raise money, using the power of the crowd to help get your idea off the ground.
So just what does it take to run a successful crowd funding campaign? A lot more than you might imagine, as you’ll find out.
In this post I’m going to concentrate on how to run a successful Kickstarter campaign as it’s the current market leader and most well-known. Since launching in 2009 Kickstarter has grown to become one of the biggest alternative avenue for investment for small companies and startups. As of 2014 Kickstarter has raised over $1 billion from over 5.7 million people around the world. So how can you tap into this huge investment potential you might ask? Here’s a rough how to.
Start with a really tight plan
Before you even think about running a crowd funding campaign you need to put in some leg work first. Kickstarter has already proven to work great for a lot of companies who build physical products. Think of it like a store for things that don’t exist yet.
The reason a lot of these products have been successfully funded is that manufacturing requires a lot of planning and development. Prototypes are built and tested, supply chains need to be established and potential distributors sought. This kind of work requires some initial investment, and necessitates the confidence that you know you’ve got a market for your idea.
Having a sound plan in place already means you’re not putting 100% of your eggs in one crowd funding basket. Give yourself a plan B if crowd funding doesn’t work. If your crowd funding campaign is successful however, you stand to gain the kind of exposure and financial backing to get up and running very quickly.
Defining and communicating your idea in a way that makes your target audience absolutely ‘have to have it’ is by far and away the single biggest reason that will decide whether you succeed or fail. Be absolutely clear what you’re raising funds to do and establish a clear beginning and end to your campaign, with timescales. Although each campaign only runs for 30 days, fulfilment of your pledges runs to your schedule, so make sure you’re clear about it or you could end up like these guys. Make sure you set clear goals for your project and communicate them with your backers, this helps build trust that you’re going to deliver on your promise and allows backers to judge just how realistic your claims are.
Setting your funding goal
First of all if you want to run a successful Kickstarter campaign, be realistic. An idea for an app looking to raise $1 million in development costs is much less likely to reach funding than $50.000 for a small first run of physical products. Your funding goal will also determine the value and amount of rewards you’ll be able to offer. A big funding goal will need a larger number of pledges, and to attract volume you’re going to need to spend more money on marketing to reach a wider audience. Make sure you’re as transparent as possible when laying out what you’re going to spend your funding on. The more your backers understand what they’re investing in, the more likely they are to pledge.
Pledge pricing works on a sliding scale and requires some serious thought if you’re going to reach your funding goal. Your lowest pledge reward should start with what planning to create, whether than be a book, CD, smart watch or whatever. As your pledge values increase you’re going to need to think of unique and creative ways to add value to your offer as well as reducing the number available to add the value of scarcity into the mix. Start small at first, Kickstarter claims that projects with rewards of $20 or less succeed 48% of the time compared to those without a reward of $20 or less, which succeed just 20% of the time. Think about it. If you offer people a minimum investment of $20 or less, you’re almost 50% of the way to success.
For the top tier rewards, realise that they can make up a significant proportion of your funding, but they’re going to have to be worth it. One way to approach this is to think about how you can offer unique meaningful experiences that add something over and above a physical product. This works particularly well for creative projects, if you’re making a film, offer parts as extras, VIP private screenings, or invites to your wrap party. If you’re offering a product, think about personalization, one-off colours, or even custom designs that a backer can submit. However you decide to structure your top tier rewards, make sure they have a wow factor, after all, if you’re asking for a single $10,000 pledge, you’re gonna need to deliver a $10,000 reward!
Stay on top of your campaign
To run a successful Kickstarter campaign you’ll need to really push to gain as much exposure as possible once you’ve launched your campaign page, this is just the start of 30 days of activity you’ll need to stay on top of if your campaign is to be successful. If you’ve done your homework you should already have a network of potential backers or customers you can reach through email and social media to promote your page. You should also have PR scheduled to help raise awareness among your target audience as well as a social media plan for potential backers. You’ll need to make sure you actively engage with your audience through the campaign page comments and on social media. People quickly become suspicious of companies who ask for money and don’t respond to their questions, so make sure you have someone looking after your communications channels for the full 30 days the campaign runs.
Finally, make sure you’ve got a robust follow-up plan once your project reaches its goal. If you’re manufacturing products, make sure to give your backers regular updates on the production process and wherever possible try to give estimations of a delivery date. If your campaign goes well, consider building a long-term solution to allow customers to buy your product and build your campaign into a successful ongoing business.