Since its 2009 launch, Kickstarter has helped more than 180,000 campaigns collectively raise over $4.8 billion in business funding. Kickstarter has been key in assisting businesses to raise money and gain media traction, but if you want to use Kickstarter for business purposes, it helps to have a plan.
It may seem obvious, but it needs to be said: Running a successful Kickstarter campaign is no walk in the park. According to Kickstarter’s campaign stats, 37.63% of Kickstarter campaigns ultimately reach their funding goal. That means that over 62% of businesses on Kickstarter get no money whatsoever from running a crowdfunding campaign. Under Kickstarter’s all-or-nothing funding policy, if your campaign doesn’t hit its funding goal within the time frame you specify (campaigns have a maximum length of 60 days), you won’t receive any money at all — all the funds pledged to you are returned to your backers.
We tell you this not to dissuade you but to prepare you for the realities of crowdfunding on Kickstarter. If the current pandemic and resulting economic climate have you struggling to find traditional sources of funding and you’re looking to Kickstarter as a possible solution, we have some crowdfunding tips for you to keep in mind.
1) Be The Point Person Of Your Campaign
Look, I get it. You may not be a natural PR flack or salesperson, and you probably didn’t get into business to be the next Billy Mays. However, the reality is that people — your potential backers — are attracted to the idea of passion projects. They tend to identify with business leaders who convey enthusiasm and vision, and from there, it’s a short path to becoming a supporter. Just look at the fanatical social media following Elon Musk has been able to attract, despite his many missteps.
Don’t be afraid to put yourself out there as the public face of your campaign. It’s challenging to make people feel invested in a business project, but if you personify that business project — if you detail your life story and your motivation for doing what you do — people become more likely to share your enthusiasm. Kickstarter knows this. That’s why the company refers to those who launch crowdfunding campaigns as “creators” and not “campaigners.”
Of course, you’ll still want to be concise and not overwhelm people with biographical details. Just remember: People are more likely to become enthusiastic about what you’re doing if they get a sense of your enthusiasm. So while you may be an introvert, do your best approximation of an extrovert while touting your business!
2) Research Past Kickstarter Campaigns Similar To Yours
Imagine that you’re trying to get a business loan from your bank. Now imagine that you could look at every loan application any business had ever submitted to your bank as well as whether each application was granted or rejected. This would be pretty valuable for you in terms of helping you tailor your loan application for success, wouldn’t it?
Thankfully, this is essentially what you can do on Kickstarter before launching your campaign. Kickstarter campaigns never get removed from the website, regardless of whether they succeed or fail. With over 480,000 campaigns launched on Kickstarter to date, you have ample opportunity to study the ghosts of campaigns past. All this raw data is just sitting there waiting for you to examine and draw lessons from. Pay particular attention to old campaigns for business projects similar to yours. Look for patterns. Compare and contrast the campaigns that succeeded vs. those that never really got off the ground.
3) Come Up With A Good Business Plan For Your Kickstarter Campaign
Achieving your business goals requires a good business plan. Why would achieving your Kickstarter goals be any different?
You’ll want to research what elements are needed in a business plan for Kickstarter. To that end, Kickstarter has posted a creator handbook that contains helpful information for creators about telling your story, promoting your campaign, fulfilling your commitments to your backers (complete with a list of services that can help your fulfillment process), and more. Read through this handbook but also seek out feedback from successful campaigners — look for interviews and podcasts featuring them, and if you can secure a private chat, you should do so.
4) Record A Professional Video & Post It
Kickstarter once posted an article about making promotional videos in which the company stated that featuring a promotional video in your crowdfunding project increases your likelihood of success from 30% to 50%. The article was posted several years ago, so the stats may be out of date, but it touches on an undeniable truth: The better your presentation is, the more likely it is that your Kickstarter campaign will reach its funding goal.
Your instinct may not be to invest precious time and resources into the production of a slick video. You might prefer investing those resources in your actual business project. Just remember that thousands of other Kickstarter creators have great business ideas too. Effective promotion helps determine which of these ideas get heard (and funded) and which don’t. A professionally-produced video can help you cut through the noise and draw attention to your campaign, so don’t be shy — put out the best video you possibly can.
You should also take care to ensure that your campaign design choices, including your logo, are top-notch as well. It may go against your instincts, but a professional sales pitch helps differentiate you from all the other worthy funding-hungry businesses on Kickstarter.
5) Recruit Backers From Your Network Prior To Launch
People who support crowdfunding campaigns generally don’t like to be the first to support a campaign. When people happen upon your campaign and see “$0 pledged,” it can be a deterrent to getting their backing, whereas if they see that your campaign already has some support, they may decide to join the bandwagon. That’s why you should mine your existing networks for backing before you officially kick off your Kickstarter campaign.
According to Kickstarter’s ever-helpful stats page, while just 37.63% of Kickstarter campaigns succeed, 78% of projects that raise more than 20% of their goal are ultimately successful, thus illustrating this bandwagon effect.
Don’t be afraid to go to your family and friends to line up commitments of support before your campaign goes live, then have them contribute once you launch your project. Try building an email list of potential backers from your personal and professional networks as well. Of course, if you have a significant social media following, do some prelaunch promotion of your campaign on your social media channels. Then, once your campaign goes live, notify everyone immediately.
Securing immediate funding is key to attracting subsequent funding from those who aren’t already familiar with you and your business. Success breeds success, so line up those early commitments!
6) Use The Data In The Project Dashboard To Your Advantage
Kickstarter’sÂ Project Dashboard gives you access to a lot of helpful data, such as the domain source your backers (not just internet traffic in general, but your actual backers) are coming from, the number of pledges from that source, the amount pledged, and the percentage of your total amount raised from each domain. In terms of helping you focus your marketing efforts on the right places, this information is golden.
The Dashboard also gives you information on the popularity of your reward tiers, assuming you offer different levels of rewards to backers at varying levels of financial support. This should help you refine your reward tiers to better reflect what the data shows people want. Kickstarter’s Project Dashboard data is your friend!
7) Stay In Touch With Your Backers
The act of backing your project is an act of faith on the part of your backers. These folks are putting their trust in you to deliver on your promises. They generally realize that there’s no guarantee that you’ll be able to fulfill your commitments. That’s why it’s so important to show your backers the respect they deserve by keeping them updated on your progress. Be as open as possible — honesty is the best policy.
Try to monitor what’s being said about your campaign on social media. If people have concerns, respond to them and try to address their issues. Give people reassurance about taking the leap of faith necessary to place their trust in your campaign.
8) Don’t Be Afraid To Run An Ad Campaign
Yes, this is another point that touches on the marketing aspect of running a Kickstarter campaign. That’s how important the marketing side of crowdfunding is.
In the early days of Kickstarter, you may well have gotten away with not focusing on advertising. But as some observers have noted — not without a hint of bitterness — the backlinks directed towards successful Kickstarter campaigns often reveal a lot of traffic coming from Facebook or Google AdWords.
Don’t be squeamish about running an ad campaign. It’s simply what modern crowdfunding often requires. If you can afford it, you may want to hire a PR agency and/or an advertising agency to handle the promotional side of your campaign so that you can keep more of your focus on your business project.
9) Make Sure Your Funding Goal Is Realistic
Most entrepreneurs possess a healthy amount of self-confidence. If they didn’t believe in their ability to reach big goals, they would likely have found another line of work. However, if this is you, there are benefits to keeping your Kickstarter funding goal relatively modest.
It’s good to know just how much money you’ll need to accomplish your goals and cover your expenses, being mindful of Kickstarter’s 5% platform fee and the fees charged for payment processing. Don’t ask for more than is necessary. You’ll have better luck meeting a modest fundraising goal than a more ambitious one. As I said earlier, success breeds success, so a successful campaign can set the stage for more crowdfunding success in the future.
Additionally, with a modest funding goal, you’re more likely to have a campaign that blows well past what you set out to raise, which, in and of itself, can impress interested parties, perhaps including the media.
10) Don’t Go Overboard With The Reward Levels
Studies have consistently shown that when you offer people too many choices, they tend to feel overwhelmed, thus leading them to decide that making a choice isn’t worth the trouble.
Decide on rewards that are clearly presented and that appeal to your target audience. Offer entry-level rewards for small pledges to give the broadest possible array of potential backers the ability to feel like they’re a part of your project. Get them invested in your success. However, don’t offer an overabundance of rewards. In particular, don’t offer a plethora of similar rewards or variations on the same reward. It will prove to be counterproductive.
11) Don’t Try To Do Everything Yourself
When Kickstarter launched in 2009, it may have been possible to run every aspect of a successful campaign yourself. However, in 2020, you’re going to be competing with companies backed by angel investors and other deep-pocketed agencies. Hell, in some cases, their agencies have agencies.
Don’t spread yourself too thin — enlist help when you need it. Whether you have an agency to handle the marketing, business partners to help with your project, or your friend’s kid to take care of the social media outreach, Kickstarter campaigns are best approached as group projects.Â Remember, your project isn’t competing with a bunch of ragtag DIY folks. Your competitors are taking advantage of assistance any way they can get it. Don’t hesitate to do the same.
Report Back: How Did You Find Success Using Kickstarter For Your Business?
Crowdfunding has been a godsend to hundreds of thousands of businesses. Just remember that the playing field is not level and that you’ll be competing with projects backed by big crowdfunding agencies. That’s why it’s so vital that you use every tool at your disposal to meet your funding goal.
Have you been a part of a Kickstarter crowdfunding campaign? Does your experience with what works comport with our advice? Are there other things people should keep in mind to set themselves up for crowdfunding success? If so, please drop us a comment — we’d love to hear from you!
The post Raising Money For Your Small Business Through Kickstarter? Find Success With These 11 Tips appeared first on Merchant Maverick.