Kickstarter: How to make $8 million from crowd funding
The Oculus Rift virtual reality gaming headset was an early Kickstarter success, later purchased by Facebook for $A2.6 billion. Source: Supplied
JUST $53,897.
That was the humble fundraising goal Ryan Grepper set on July 8,
lowering his expectations for the second Kickstarter campaign for his
Coolest Cooler creation, a hi-tech cooler jam-packed with all sorts of
fun gizmos — from a built-in ice crushing blender to Bluetooth speakers
and a USB charger.
See, the first time Grepper took to the
crowd-funding site — back in November 2013 — he’d set a target of
$134,730. Yet, after an encouraging strong start, interest in the
campaign started wavering. By closing, the project managed to raise a
little over $107,784 in pledges and eventually failed to hit its mark.
The
failure dealt a blow to Grepper’s confidence — but the entrepreneur,
who describes himself as “part visionary, part mad scientist” refused to
give up. Taking the lessons he’d learned from the failed campaign,
Grepper regrouped and last month reintroduced an advanced version of his
creation.
The result?
Just over a month later: more than $8.8 million in
pledges and some 41,000 backers. With 21 days still to go, Grepper’s
project has become the third most-funded campaign on Kickstarter ever —
and could very well hit the top spot if pledges continue to pile in.
For
those not in the know, Kickstarter is the wildly successful
crowd-funding platform used by everybody from small-time game developers
to movie makers to fund their creations — virtual reality device Oculus
Rift started life on the platform before being acquired by Facebook, as
did the Veronica Mars movie, which was brought to life after
fans of the cult show chipped in more than $6 million to see a feature
film made seven years after the show’s cancellation.
An Ohio man
recently made headlines after a joke posting about potato salad took on a
life of its own, leading to more than $50,000 in donations. Fans of the
‘90s space simulators have also made history, pledging more than $50
million towards Wing Commander creator Chris Roberts’ latest project, Star Citizen. Star Citizen
became the highest-raising crowd-funding project ever when it overtook
the Pebble watch in 2013, and has since raised more than five times that
amount.
So, what was the secret behind Grepper’s astonishing
comeback? And what are the best tips that could help turn your business
idea into a crowd-funding mega-success? To find out, CNN’s Future
Finance spoke to Grepper himself and Julie Wood from Kickstarter, as
well as crowd-funding experts Piers Duruz and Salvador Briggman about
their top tips for being a Kickstarter success.
Fans of cult drama Veronica Mars chipped in $6.1 million towards a feature film seven years after the series was cancelled.
Source: Supplied
Ryan Grepper, Coolest Cooler creator
Make sure the design is visually compelling.
My first Kickstarter campaign failed and I believe one of the biggest
reasons was that I had not advanced the design far enough to capture the
Kickstarter audience.
Kickstarter is a very visual platform. When
I took my design further along in the process I was better able to
share my love of the Coolest and more people naturally connected.
Consider the time of year when customers will be most receptive.
I originally launched the Coolest in November. At the time I was
thinking we might hit the Christmas shopping and tailgating audience,
but what quickly became apparent was that folks were not focused on
coolers in November. Relaunching in July was perfect because people are
thinking about coolers during the summer and it was much easier to get
exposure. This sounds obvious now, but I believe in learning from my
mistakes.
Develop a following before the campaign. Although
my first campaign failed, I saw that some people were very interested
in the Coolest. We nurtured that interest in between our first and
second campaign and worked hard to grow that excitement. By the time we
launched our second campaign we had a terrific core of interested
backers. Now I can’t believe how our group of backers has grown.
Julie Wood, Kickstarter spokesman
Make a video!
Projects with videos have a higher success rate than those without.
Your video doesn’t have to be super pro looking. Some of our favourite
project videos have a very DIY feel.
Offer great rewards!
Some rewards are straightforward, like a copy of the album you made.
Other rewards are more creative and unique. The best projects tend to
have a mix of both — it’s important to have great rewards at all pledge
levels. The most popular pledge amount on Kickstarter is $25, and the
site-wide average for all pledges is about $70.
Updates are a great way to build a relationship with your backer community.
While your project is live, keep your backers informed about new
developments and funding milestones. It’ll inspire them to help you
spread the word. Treat your project like a story that’s unfolding before
their eyes. Detailed updates like “Pics from last night’s show!” or “We
found a printer for our book!” are fun for everybody to follow along
with.
Ohio man Zack ”Danger” Brown hit the headlines after raising $50,658 to make potato salad.
Source: Supplied
Piers Duruz, founder of Crowdfunding Dojo
Start building an email and social media audience immediately,
with the promise of content that interests them for following you.
Growing an audience takes time, but you can do it while you plan
everything else. Even your journey to prepare can be interesting to the
right people.
The first 48 hours of your campaign is the most critical. If you can get your followers to visit and pledge at any time, make it right at the start.
Start your promotion with the people who are closest to you
and work your way out. Each group provides social proof to the next
group, by showing other people have already backed you when they arrive.
Salvador Briggman, founder of CrowdCrux
Don’t reinvent the wheel.
Study the creators that have come before you. How did they structure
their Kickstarter page? What rewards did they offer? How many updates
did they do throughout the campaign?
In addition, by backing
several popular projects in your category, you can see how other
creators do backer communication and how long it takes them to fulfil
their promises. Also, by browsing their list of backers, you can get an
idea of whether the supporters are part of the Kickstarter community
(backed multiple projects) or are first-time supporters, meaning the
project drove a lot of its own traffic.
Focus on emotion, but back it up with technical ability.
It’s no secret that part of what makes crowd-funding campaigns spread
quickly and gather a supporter base is social media. Whether it’s
networks like Facebook, Twitter, LinkedIn, and Pinterest, or social
bookmarking websites like Reddit, StumbleUpon, Digg, Blogs, and Tumblr,
information can disseminate in a matter of hours and light up the web
2.0 news networks.
Wing Commander creator Chris Roberts’
upcoming space simulator Star Citizen is the highest raising
crowd-funding project ever, with $A51 million and counting.
Source: Supplied
What many people overlook is the reason why information
spreads: it spreads when it makes a reader feel a certain way, which
then makes them want to share that link.
The feeling that prompts a
backer to share that link could be “This is so cool!” or “This is an
important cause.” It’s easiest to invoke a feeling when you have a prior
relationship with your backers, as is the case with the multi-million
dollar “Reading Rainbow” campaign.
Although ultimately, you want
your backers to come away from your video and campaign feeling
something, you must also back up your pitch with technical ability. What
prototype have you created? Why can your team deliver on their
promises? You must engage both the left and right hemisphere of the
brain when crowd-funding.
Everything is sales. Typically,
when we think of a salesman, we think of a slimy quick-talking city
slicker with too-white teeth and a $2000 suit. These types of
individuals are an instant turn-off.
The best types of salesmen
don’t make you feel like you are being sold to. They have the ability to
create the urge to buy. Usually this is the result of giving people
what they want, or connecting problems people experience with an
appropriate solution.
Since you are going to be doing a lot of
self-promoting, it’s important that you adopt the mental mindset of your
potential backers. What types of rewards would get them excited? How
would they want to be pitched? What would turn them off?
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