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7 Key Factors for Crowdfunding Success

By May 5, 2019 No Comments

Crowdfunding Success Checklist

Table Of Contents

  • Introduction
  • Did You Know?
  • 7 Key Factors for Your Next Crowdfunding Success
  • [Tip #1] Start Building a Community from Day #1
  • [Tip #2] Own The Rules
  • [Tip #3] Integrity Triumphs
  • [Tip #4] Customer Feedback is a key factor behind crowdfunding success
  • [Tip #5] Rewards are a very important tool for crowdfunding success
  • [Tip #6] Are you in it for the long-term?
  • [Tip #7] Have an action plan ready
  • Key Takeaways for Successful Crowdfunding Campaigns

 

Introduction

Is Crowdfunding Success Predictable Or Unpredictable?

What if there was a similar pattern to all successful crowdfunding campaigns and a similar pattern to all unsuccessful crowdfunding campaigns?

The truth is, on the surface, crowdfunding might seem somewhat unpredictable, even a little threatening – you are after all asking for money from total strangers.

And let’s be honest, your backers are not exactly doing it out of the kindness of their heart. If you are guilty of believing that even for a moment, let me clear it up for you right now –

No, they are not doing it entirely out of kindness. (We are not talking about non-profit initiatives, although such initiatives, too, will find these 7 key factors invaluable on their journey.)

Yes, there are some who may do it, but many backers are doing it for the rewards they get in return for backing you.

And, this is exactly why the crowdfunding scene becomes a little predictable!

If we look closely at successful versus unsuccessful crowdfunding campaigns, there are certain patterns, which you can put to use to ensure your next (or current) crowdfunding campaign at least meets its goals, if it’s not a raging success.

This is why, today, we have gone over patterns of some of the highly successful crowdfunding campaigns, and come up with 7 simple but key factors to ensure your next crowdfunding campaign is a success. We also have a few cool success stories to share.

 

Did You Know?

  • Till 2015, 20K+ creators launched more than one project on Kickstarter, and they took $511 million in pledges — nearly a third of all money pledged on Kickstarter…!
  • For all the first timers on Kickstarter, the success rate stands at just 39%, whereas for those who succeeded the first time and launched a second project on Kickstarter, they had a whopping success rate at 73%!
  • Even better news – according to Kickstarter’s statistics, the success rate for 3rd, 4th, 5th projects launched by successful creators keeps on increasing and has a whopping success rate of 87%, 87%, and 91% respectively, with a massive increase in the number of backers with each successful funding. The one deciding factor being the earlier projects have successfully achieved their fundraising goals!

Take a look at the Kickstarter blog article here for more such stats – https://www.kickstarter.com/blog/by-the-numbers-when-creators-return-to-kickstarter

See? Success begets success.

To figure out EXACTLY how the successful creators (the repeatedly successful “Kickstarters” are doing it, apart from having a great product), we have reverse engineered their strategy, so you can use their tactics to take your crowdfunding chops to the next level.

Be sure to read the article till the end. It’s all the good stuff, with zero fluff.

Here are the 7 key success factors you must put to use to ensure the success of your next crowdfunding campaign –

7 Key Factors For Your Next Crowdfunding Success

[Tip #1] Start Building a Community from Day #1

It’s all about the “Crowd” in Crowdfunding!

The simple fact is, Kickstarter, Indiegogo, and just about any other Crowdfunding platforms are all about community – don’t you be forgetting the “Crowd” in “Crowdfunding”!

All these platforms are made up of a massive number of people and understanding them, effectively communicating with them, and getting them excited about backing you is where your success is made.

See, there are already so many engaged people looking to back the next, most exciting creator or entrepreneur literally with their credit cards in hand.

Hell, that’s what the platform is all about and everyone on that platform knows it, otherwise they wouldn’t hang out there and we wouldn’t have so many successful crowdfunding campaigns there, would we?

Beats going hunting for some intimidating venture capitalist or even begging friends and family to support your vision, isn’t it?

Hence, this tip is all about getting the ‘people aspect’ of your crowd-funding campaign right.

If you get it right, if you can connect emotionally, get your would-be backers involved and excited about funding your campaign, then you don’t really need fancy statistics, out-of-this-world ideas, or even a lot of successful past experiences on Kickstarter!

This is as much about the important details as it is about the small details that get missed and ignored.

Your potential funder is looking to connect with you and be a part, if only in a small way, of your successful kickstarting journey.

Just as you make them aware of how you are making a difference in their life and society, involve them and make them a part of your journey, share your story, your vision, why you are doing what you are doing, your plans and strategies, and why you need their support.

Everyone is looking to be a part of something larger than themselves.

Not everyone can create it, but you can give them an opportunity to be a part of it, and they would be more than happy to have supported you!

This is where you dig deep and flesh out your story. A separate article on this topic is in the making. For now, just share some of your unique experiences and why you are doing what you are doing, what drives and motivates you, the source of your idea, and how your product can change lives!

You can refer to Kickstarter’s ‘Creator Handbook’ (https://www.kickstarter.com/help/handbook) or Indiegogo’s Education Center (https://entrepreneur.indiegogo.com/education/) as well on more platform-centric guidelines.

First Impressions Matter

A simple metric is whether or not your images, story, video, pitch, product descriptions, and underlined benefits enhance the perception of your brand or diminish it.

Keep it professional, use stunning images and video pitches.

Go the extra distance in ensuring your story connects deeply and impacts powerfully. Many of the times a powerful story is enough to do the work for you. You will be surprised, but Crowdfunding is more about emotions than logic.

Be sure to share what your backers can get from this  product, and if possible, the difference they can make in society by supporting your cause in a way that appeals to their emotion.

Make Your Backers Feel Emotionally Connected with Your Vision

Make Your Backers Feel Emotionally Connected with Your Vision

Even if you are only in the planning and conceptualization stage, does this mean you are allowed to be unprofessional?

Act like you are already a successfully funded company, someone who means business, and you will most likely tip the odds in your favor.

Would you support a creator who has an absolutely great idea but seems very unconfident and flimsy, doesn’t really have a strong sense of mission guiding his or her efforts, and just appears doubtful of himself/herself.

Unsure Product Creator

Lack of confidence will get you nowhere. Credit: Robin Higgins

Or, would you support a creator who may not have the most breath-taking idea, but appears confident, passionate, means business, and has a moving cause?

Confident Product Creator

Being confident means your backers feel confident about backing you. Credit: Robin Higgins

No brainer, right?

This implies open communication, having a detailed plan, which openly demonstrates the volume of research and survey that has gone behind it, addressing questions, emails, and concerns of your would-be backers with the same sense of duty you would treat your actual customers, persistent marketing/PR, and so on.

You can use Ads, Blogging, Influencer Outreach, Social Media, Live Events, to drive home your cause.

If you are 100% involved and committed to a just cause, can anything really stop you?

Care For Your Fans, And They Will Care Right Back

There’s one more point I wish to make – If you care for your fans, they will go out of their way to care for you.

Don’t believe me? Look at how people line up when J.K. Rowling launches a new book, or when Apple launches a new version of iPhone.

People actually line up and sleep on the streets in front of the bookstore/showroom the night before the launch. Do “normal” people do that? Nope. But, fans definitely do that kind of stuff!

You might just say, I am not ‘J.K. Rowling’ or even ‘Apple’.

Heyy, everyone starts somewhere! (If you are looking for some inspiration, just read this story of how J.K. Rowling went from penniless, getting loads of rejections, and considering suicide at one point of time in her life, to one of the richest authors in the world.. richer than the Queen of England herself – https://www.businessinsider.com/how-jk-rowling-turned-rejection-into-success-2016-3)

Steve Jobs’ struggles have already been turned into a movie now!

Maybe you won’t find that level of success, and that’s completely fine. However, the way fans take care of the above brands is an inspiration in itself!

Take care of your community in every possible way you can, and it will always be there for you, no matter how small your following is.

 

[Tip #2] Own The Rules

Whether you are using Kickstarter, Indiegogo, or just about any fundraising platform out there, if you dive in deep into the spoken and unspoken rules of the respective platform, you have practically won half of the fight… no exaggeration here!

Think about it this way – If you were playing a game of soccer for the first time in your life, wouldn’t it just make sense to get to know the rules of the game first and own them?

If you think you will learn them as you start playing the game, half of the time, you won’t even know what the hell is going on with other players and why they are doing what they are doing.

Worse still, you will end up making your own conclusions about the game and internalize the wrong stuff.

Every Game Has Its Own Spoken and Unspoken Rules

Go and find out what are the spoken and unspoken rules of succeeding with crowd-funding, rules for succeeding on your chosen platform, find out which creators keep on coming back to these platforms and keep on succeeding repeatedly, how do they do it…and you have practically won 50% of the fight.

Once you have the required clarity, it’s just about taking action and following up on the required steps.

Know the rules of the game before you play

Know the rules of the game before you play.

(On a similar note, here’s some great reading – Why brands like Pebble repeatedly kept coming back to Kickstarter, and breaking fundraising records – https://www.theguardian.com/technology/2015/mar/24/kickstarter-why-brands-like-pebble-smartwatch-come-back-for-more)

 

[Tip #3] Integrity Triumphs

Ever got tricked into dating someone who looked “nothing” like their picture on their online dating profile?

Not cool, right?

It’s a known fact – there are all kinds of scams over the internet, including on authority platforms.

And, when we say scams, this may mean an outright scam just to steal money using crowdfunding sites or the kinds of scams with defective items, poor quality raw materials being used, or even shipping products that look nothing as displayed and promised in the picture.

If you show integrity in this department, follow up on the given promises to the ‘T’, avoid fake or over-blown promises and deception, set your personal bar high, and go all in with the intention of “serving” and not selling, you, my friend, have already found success.

Integrity Rules on the Internet and with Crowdfunding

To reach your crowdfunding success destination via Authenticity is the best route.

There was a time when businesses may have earned fortunes peddling low quality goods, manipulating customers, muscling their way through big ad budgets, and so on; but in the age of the internet, integrity is valued, appreciated, and greatly respected!

If you don’t deliver, it won’t take long to have your name dragged through the mud.

On the other hand, if you deliver, and keep on delivering, the internet will reward you like you wouldn’t believe.

The Internet Values Integrity Highly

Transparency, honesty, regular real-time updates can really get your backers excited and eager to be with you till the finish line.

This will actually work in your favor by making these people bring even more backers to support you.

Remember, this is a shared vision, which does not end with you raising your required amount, but goes all the way until you fulfill your promises, offer the promised rewards, and get your backers excited for another bigger, better vision with an even more exciting round of fundraising and equally exciting rewards!

Trust is your currency – use it wisely.

Trust is Your Currency with crowdfunding

Trust is Your Currency.

Pebble, a smart watch brand went head to head against ‘The Apple Watch’ using Kickstarter and created a lot of buzz for themselves as an affordable alternative against the pricey Apple smartwatch.

Ultimately, though, it was the smartwatch market that fizzled out and Pebble was taken over by Fitbit.

The level of success they found and the crowdfunding records they set one after the other wouldn’t have been possible without a serious brand and an equally great product in place!

Project on Kickstarter –

https://www.kickstarter.com/projects/getpebble/pebble-time-awesome-smartwatch-no-compromises

3 Reasons Pebble’s Time Smartwatch Beats The Apple Watch according to Forbes –

http://www.forbes.com/sites/antonyleather/2015/03/02/3-reasons-pebbles-time-smartwatch-beats-the-apple-watch/

[Tip #4] Customer Feedback is a key factor behind crowdfunding success

When Pebble’s first funding project went live on Kickstarter in April 2012, with the initial aim of raising $100,000, they met their goal within 2 hours.

They also set a new record for being the most funded project in the history of Kickstarter after the deadline was over.

There are a ton of other successful projects, which far out-earned their initial goals be it the ‘Sondors Electric Bike’ (https://www.indiegogo.com/projects/sondors-electric-bike#/), ‘Coolest Cooler’ (https://www.kickstarter.com/projects/ryangrepper/coolest-cooler-21st-century-cooler-thats-actually), and so on.

 

What’s the common factor here?

 

Customer Need.

For every successful campaign, market need for those products was the driving force in their success.

Customer Is King

Let the real world be the judge of your product.

Many of the times, it is not just about a particular product, but also its quality, the added features it has, the materials used in creating it, its durability, all have an important say in making the product desirable;

It won’t hurt to get actual customers from your target group to use your product and listen to them closely.

You may have a certain idea about your customer, but get ready to be surprised with what they have to say.

You are the “creator” of the product, but they will be the one using it. This is to say, don’t force your product down their throats.

Why not listen to them closely and design the product according to their needs and demands?

The marketplace is where your product gets dissected with the most critical eye and its strengths and weaknesses carefully assessed.

And, when customers buy it, there’s no feeling like it – people spending their hard-earned cash buying a product you have conceptualized and built (with their feedback of course)!

Ultimately, your product must speak to your market in a way that they feel you have built exactly with them in mind, where they know they can rely on it and feel they can’t do without it.

This is when they will seriously start considering backing you.

A strong demand usually ensures there is a strong probability of your success with crowd-funding, and later, the actual sales of your products.

Customer Need Drives Crowdfunding Success

Customer Need Drives Crowdfunding Success

If the product is not immediately appealing to your intended audiences, make it appealing by showing what it can do for them, and how it can change their life. This is generally the harder path. We strongly recommend you tap into an existing need and then start building your product versus “inventing” a need.

[Tip #5] Rewards are a very important tool for crowdfunding success

To continue on the earlier tip, a strong market demand for your product and great rewards/perks immediately translate into a successful fundraising campaign.

If we look at the above example of ‘Coolest Cooler’ (https://www.kickstarter.com/projects/ryangrepper/coolest-cooler-21st-century-cooler-thats-actually), just the US $185 Pledge has got 50K+ backers amongst 11 total categories for pledging.

Coolest Cooler Pledging Levels on Kickstarter

Coolest Cooler – 2 Most Popular Pledging Categories on Kickstarter

 

None of the other categories even come close, with the second highest category topping only at 7K backers.

It’s all about the right rewards

The above example speaks volumes about how the right rewarding system can completely tip the odds in your favor.

A highly desired product that fulfills a market need/pain point and comes with equally enticing rewards make backing your project a highly desirable option.

Again, it’s mostly an Emotional Process for them.

When you go into crowdfunding knowing there’s a strong emotional element to it, you play the game a bit differently.

A desire to take customer feedback into heed and making the required adjustments/changes, too, is a reward in itself for your backers. As I said earlier, they crave to be a part of something good and bigger than themselves.

If you show the required amount of innovation and adjusting your product to meet the customers’ need, they will feel they are a part of your vision and this will give your backers that extra special connect with your product.

Many of the larger brands cannot always adapt to customers’ expectations due to a certain established way of doing things, slow processes, and of course organizational bureaucracy.

A start-up, on the other hand, is much more flexible, agile, and tuned into the ground situation.

It can quickly direct its limited resources and adapt itself around the market pain-points and needs.

It has to… otherwise it won’t survive!

Your adaptability is your biggest strength – Put it to good use!

 

[Tip #6] Are you in it for the long-term?

A fund-raising is only one aspect of your business.

The question is, are you going to make your dreams conditional, letting something or someone else decide whether you are going to succeed or fail, whether you are going to take charge of your entrepreneurial destiny or not?

The truth is, many creators treat their fundraising goals as a be all and end all.

They are neither prepared for failure, nor prepared for success.

Many creators in the past have completely lost the plot even after far exceeding their fundraising goals.

They blow the money on inconsequential stuff, don’t meet promises, fail to fulfill the given deadlines, and it hurts their entrepreneurial aspirations badly.

Don’t make success conditional on factors outside your control!

True, some aspects of your business are entirely subject to outside forces, be your product manufacturer, be it market need for your product, level of competition, trends, the resources you have, etc.

If you follow up on the tips shared in this article and tick as many points as you can from these 7 key success factors, you are set for the most part and succeeding with your crowdfunding campaigns will be much more within your control.

However, despite the best of efforts, didn’t you, after all, enter this game with a certain level of acceptance that failure is a part of the process?

The real question is, will you let it stop you?

Money will find a way, when you have the required amount of clarity, a strong driving vision, and a willingness to take massive action!

Crowdfunding is just one way to play the game.

There are many other ways to get your dream moving forward.

Don’t let short-term setbacks stop you or make you give up on your dream!

If 9,999 methods didn’t make the light bulb, the 10,000th one did!

Let success come one step at a time

Let success come one step at a time.

[Tip #7] Have an action plan ready

Let’s say you have had a very successful crowdfunding campaign, and you couldn’t have asked for more!

You have the most difficult part of the equation taken care of.

Time for a vacation?

Nah, not really.

Your backers backed you with the one main purpose of getting the reward you have promised them.

It’s time to deliver on the promise.

But, you have promised a near impossible delivery time and over-extended yourself with the promises!

What now?

Well, the more heightened the expectations from your product, the larger the sense of disappointment if those expectations aren’t fulfilled.

The simplest advice we can offer you – Don’t go there! If somehow you end up there, it’s a great idea to bring honesty and transparency into the picture.

Asking for more time may not hurt you, but dishonesty, cutting corners certainly will.

Is your crowdfunded product reliable?

Is your crowdfunded product reliable?

It’s just an all-around great idea to keep the expectations and promises realistic, but attractive.

How do you achieve that?

Don’t let success or failure throw you off-track!

Do the necessary amount of ground-work and have a realistic plan in action, before you go live with your fundraising.

What this means is; you tackle fundraising as only one part of the equation.

Delivering on the given promises is the other aspect, and a rather important one.

Have an action plan as well as a backup plan ready

Have an action plan as well as a backup plan ready.

If we revisit Coolest Cooler’s example again, as it turns out, people wanted a Water-proof Bluetooth Speaker and a Blender. It sounds such a great idea for someone going to a beach party, or just about any party for that matter.

If you are in it for the long-term, get all the plans in place, know for sure the minimum required amount of money to get your business running, have a manufacturer in place, know the exact manufacturing process and the delivery schedules, know the quality of products you can deliver, and so on.

(We have some short articles waiting for you in this department.

Here are the advanced manufacturing techniques in 2019 – https://www.morphomfg.com/advanced-manufacturing-techniques-in-2019/

Selecting the Right Manufacturing Partner in China – https://www.morphomfg.com/selecting-the-right-manufacturing-partner-in-china/)

This is to say, your work starts much before the crowdfunding campaign goes live, and definitely does not end with a successful round of crowdfunding!

Did you know, if you don’t meet your campaign goal on Kickstarter, you don’t get any money?

You can’t be flaky once you go live with the campaign. There is no going back and forth on your funding goals – No revisions once you have set a funding goal.

You can relax though, Indiegogo doesn’t have that rule.

 

It’s a great idea to stick to these guidelines. If you ensure you have all the elements in place before you go live with your crowdfunding campaign… the outcome might as well surprise you!

Key Takeaways For Successful Crowdfunding Campaigns

  • [Tip #1] Start Building a Community from Day #1 – Care for your backers and they will always care back;
  • [Tip #2] Own The Rules of the game – And you will become a part of the game;
  • [Tip #3] Integrity Triumphs – The internet highly rewards integrity!
  • [Tip #4] Customer Feedback is a key factor behind crowdfunding success – Customer need is the driving force behind the success of both your crowdfunding campaigns, and ultimately, the sales of your product;
  • [Tip #5] Rewards are a very important tool for crowdfunding success – Give enticing rewards/perks in return for backing you and you will tip the odds in your favor;
  • [Tip #6] Are you in it for the long-term? – Are you prepared for short-term failure, and success?
  • [Tip #7] Have an action plan ready – Being flaky and indecisive will get you nowhere

 

In Part II of this article, we will go over some of the unsuccessful crowdfunding campaigns and find out the patterns behind what made them Unsuccessful.

Bye for now!

If you find this article and checklist helpful, be sure to share it with friends, family, or colleagues, who are Kick-starting or jumping into Entrepreneurship. They will thank you!

 

Further reading: Crystal ball gazing into the crowdfunding landscape – https://www.morphomfg.com/crystal-ball-gazing-into-the-crowdfunding-landscape/

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