Thursday, February 6, 2014

Crowdfunding: Lessons Learned from a Successful Campaign

In recent years, the popularity of crowdfunding platforms like Kickstarter has grown rapidly. Small businesses and independent artists initially turned to crowdfunding to mitigate the initial financial risk of a new project or product. With crowdfunding, the money could be raised before the project began, eliminating the potentially catastrophe of investing in something that ultimately no one cared for.

Soon, crowdfunding spawned a new way of doing business. Not only did it help reduce the financial burden for business owners, it became a way to generate publicity and to engage fans, old and new alike. With most crowdfunding sites following the Kickstarter model where funds are only released if the goals (otherwise they are returned to donors), fans are motivated to share and talk about the project they funded. Donating makes you a stakeholder in the project. If you want to see the project realized and delivered, you are inclined to tell your network about it so that more people will contribute.

This relationship between donors and campaigners naturally leads to authentic, organic word-of-mouth marketing. Furthermore, the nature of crowdfunding encourages campaigners to put their donors first and to really think about what excites their target audience. Because of perks--the rewards that people get for donating a particular amount of money--campaigners have an opportunity to give back to their fans. This is a unique way to create hardcore, true fans, the value of which is becoming increasingly obvious to marketers.

Recently, my publishing start-up Artechoke Media ran an Indiegogo campaign to fund our first collaboration with the well-known blogger Matt "Aesopian" Kirtley (prior to this, we released two books for free). As of the publishing of this post, we have seven days left, but we've already surpassed our goal of $4,000 and are continuing to raise more money to invest in future projects with other instructors.

Whether you are a fellow jiu-jitsu enthusiast or a creative that is looking to get an idea off of the ground, I've assembled some thoughts on what I feel made our campaign a success and what I would do differently in the future. This is far from a definitive guide to crowdfunding, but I hope that it will help someone to realize their dreams.

What We Did Well:

  1. People knew us and knew that we were credible. Matt and I are far from celebrities, but we have been working in the jiu-jitsu world for some time. Matt has been blogging for over ten years and has been active in every major online jiu-jitsu community in that time. People know his content and recognize his name. For me, I have been writing about jiu-jitsu for a while as well, and have been fortunate enough to work on some big books with some big names. My name is not as recognizable as Matt's, but a good portion of the community is familiar with my work. When people know that you can deliver on your promises, they are more inclined to donate. This is one of the reasons why Red Belt, another jiu-jitsu Indiegogo campaign, was successful as well.
  2. We established a positive reputation in the community. In the time that Matt has been blogging, he has never sold a product or demanded that people pay for his content. He had a small donation button and pumped out material regardless of how much money he made or didn't make. When we announced our campaign, people remembered this and commented on it frequently. They knew that Matt had been generous with the community, so the community was generous with him. For my part, I released content for free as well, which included a two free books, one a humor book about jiu-jitsu culture and the other a free instructional that demonstrated what we wanted to do.
  3. We had a network of super friends that were willing to help. Despite our established reputations, we could not have reached our goal without the help of generous leaders within our community. Bloggers, podcasters, instructors, and business owners lent us their platforms to help us generate awareness for the campaign. With each plug that we received, we saw a direct correlation in terms of campaign traffic and contributions. Having other respected people vouch for us in this way was absolutely critical.
  4. We had a proof of concept that donors could test-drive. Releasing 3-D Jiu-Jitsu for free endeared us to fans, but perhaps more importantly it showed what we wanted to do and proved that we could, in fact, do it. With 3-D Jiu-Jitsu available for free, there was no question about what we planned to do. Had we simply described our model, our audience would be right to be skeptical and even a bit confused. Pointing to a sample boosted our credibility and helped to sell people on our project.
  5. We asked for what we needed. Our goal of $4,000 was what we needed to make Matt's book. While a bigger budget would definitely be nice, we aren't interested in taking advantage of our target audience. By setting a reasonable goal, donors are more likely to contribute, and we are more likely to get the money that we needed.
  6. We had a trove of content to share throughout the campaign. Rather than fill our social media with reminders to donate, we used the attention of the campaign as an excuse to release high quality content. Matt had seminar footage and podcasts that he shared, and I had content from previous projects that I could share as well. Again, we were giving our work away to build good will, but we are also starting conversations that people cared about.
  7. We included an awesome video with our campaign. Nothing else to say about this because it was that awesome.

What We Could Have Done Better:

  1. Our outreach was poorly scheduled. Though we had a number of community leaders promoting our Indiegogo, we didn't coordinate the coverage very well or give our friends much notice on what we had planned. We started contacting people about a week before we went live when we should have started planning coverage at least two weeks ahead of time. 
  2. The progression of our perks wasn't optimized for maximum return. After our campaign began, a few veteran crowdfunders pointed out that the donation levels for our perks had some large gaps. Our minimum perk was $5, then $30, then $35, and then $99 and up. Had we offered a perk between $35 and $99, we might have captured more donations from people that wanted to give more than $35 but not as much as $99.
  3. We offered few physical items as perks. This is primarily a result of our product being a multimedia rich e-book, a purely digital offering, but it still represents a missed opportunity. We avoided offering t-shirts or prints or posters because of fulfillment challenges. We didn't want to be on the hook for production and shipping. However, a physical perk like a t-shirt could have helped us flesh out our perk levels and also made donors feel like they were getting more out of their contributions.
  4. We didn't plan for stretch goals. We fully expected to reach our goal, but we did not expect to surpass it significantly. Now, with seven days left and $570 in donations beyond our target (as of the writing of this post), it's clear that there is a significant interest in the types of products that we plan to produce. While we had plenty of ideas for other books that we'd like to develop, we didn't have an idea polished and ready to execute, leading to some late night discussions and planning where we ultimately decided that we'd rather make less money than rush a poor product idea to market and hurt our reputation.
If I return to crowdfunding in the future, whether with Artechoke Media or another project or client, the lessons that we learned from this effort will play a critical role in my planning and execution. If you are thinking about crowdfunding your own project, please feel free to email me or message me on Facebook to talk about your plans. Even if your project is not related to jiu-jitsu, I am happy to help.

1 comment:

  1. Great Insight. Definitely useful!