Tips & Tales of Effective Crowdfunding
In recent years, crowdfunding – the contribution of money from multiple people, usually through the internet, towards a single project or effort – has become more and more popular in the entrepreneurial world. Through sites like Kickstarter, Indiegogo, RocketHub, Crowdrise, Appbackr, Mosaic, and many others, anyone with an idea, no matter the industry, has the opportunity to ask others to finance it. Because of crowdfunding’s increasing popularity, success with crowdfunding has become more difficult to achieve. To get some perspectives on what works, we interviewed three Workbar members about their effective campaigns on the most well-known crowdfunding site – Kickstarter.
Thinking Outside the Poster: Litographs
Litographs – a business founded in 2012 that screen prints the full text of books onto posters – started a Kickstarter in order to print on t-shirts. Strategically timed for the holidays, the Kickstarter exceeded its goal of $15,000 and raised $100,928 in one month.
According to Danny Fein, Litographs’ founder, the campaign was successful for four main reasons – its mailing list and Danny’s social networks; its timing; its creative use of rewards; and its strong press coverage. “It’s really important to get your campaign off to a good start, and it’ll take on a life of its own,” Danny says.
Danny’s main goal for the campaign was to get it featured by Kickstarter on the homepage, but that doesn’t happen without a bit of leg work. In order to build momentum and prove to Kickstarter that his project was worth highlighting, Danny sent an email to his existing mailing list of about 4,000 people who already had an interest in Litographs. He also promoted the page heavily on his personal social media sites – particularly Facebook. Instead of featuring a promotion on his website, he took the opportunity to offer a special price on posters - $15 instead of around $30 – available only on the Kickstarter page. This drove hundreds of customers, who were already Litographs fans, to “donate” to the campaign and get a poster for half the price. Kickstarter noticed the page’s immediate success and featured it soon after. According to Danny, about 50% of the money raised came from people who found his page through Kickstarter.
Danny also wanted to get some press coverage, but knew very little about public relations best practices. “I gave myself every possibility to have good things happen because it was so unknown,” Danny says. One way he did this was to make a wish list of around 30 blogs that he wanted to feature Litographs’ story. Instead of sending a press release, he scraped text from each blog, created hand-printed litographs of their logos, and sent them out via snail mail along with a suggestion that they cover his story. Four out of five of them did, and the first was TechCrunch – leading to the largest spike in the campaign’s donors.
Lastly, starting the campaign in time for rewards to arrive by December 24th was no coincidence. As a retail-centric project, the campaign’s positioning in time for holiday shopping was a major reason for its huge success. “It’s hard to overestimate how huge the holidays are – especially for a business like Litographs,” Danny says.
Litographs’ Kickstarter campaign had residual effects on the company’s overall success. The campaign raised traffic to the Litographs website 10-20% during the month while it was running, and the site’s traffic settled after the campaign at 4-5% more on average than before – even after holiday shopping season.
Last Words of Advice
Though Litographs exceeded its goal by a huge amount, Danny says that kind of success has pros and cons. While the increased order numbers decreased the costs of t-shirts and other materials bought in bulk, the unanticipated number of rewards Danny had to turn out for the holidays added a lot of stress and pressure. “Don’t overestimate the complexity of having 300,000 customers breathing down your necks – especially during the holidays,” Danny says. If your page is wildly successful, be prepared for the follow-through it will require. Because Kickstarter does not design itself as a retail store, Danny had to come up with his own system for following up with orders in order to follow through with every contributor’s request. “Double however long you think it will take,” Danny says, and only add stretch goals if you previously planned on it. If the campaign is already proving successful, don’t over complicate it – it only creates more work and complexity.
Putting a Local Landmark in a National Spotlight: The Brattle Theatre
The Brattle Theatre, a 60-year old arthouse cinema in Harvard Square, needed major upgrades –including a new HVAC and digital projection systems – and looked to Kickstarter to raise the $140,000 to do them. In five weeks, the Kickstarter campaign raised $149,580.
To appeal to as many donors as possible, the Brattle put a great deal of thought into its rewards. “My impression of Kickstarter is that it’s tougher for local projects… our strategy was to make it attractive to people who don’t live nearby,” says Larry Yu, a board member who was involved in the execution and promotion of the campaign. To increase the chances of getting national donors as well as local, more personally-invested contributors, the Brattle offered a mix of lower to higher-end rewards, some regionally dependent and some not. These rewards included Brattle “Schwag,” movie tickets, a night with celebrity Amanda Palmer, and even choosing the name for the new HVAC system.
Even with creative and diverse prizes, the Brattle’s campaign needed quite a bit of marketing power. In the first two weeks of the campaign, the Brattle reached its 20% mark, and finished strong with around 40% of funds rolling in the last week. According to Larry, a large reason for the campaign’s success near the end was the snowball effect of the Brattle’s promotional efforts. The theater started by promoting the campaign to its close networks – friends, family, and fans of the theater. In those initial solicitations, the promotional team also made an effort to focus on more influential connectors in its network that could help spread the word – connectors like influencers at Harvard University, the City of Cambridge, and local press and niche film publications. Using the theater’s press releases, the Boston Globe wrote several pieces highlighting the Brattle’s campaign.
Last words of advice:
The theater’s campaign succeeded and exceeded its goal, but Larry says, “It’s hard work – it doesn’t just sort of happen.” Plan for many hours of marketing power in order to get your project off the ground, and don’t expect donors to just find you. The Brattle already had many fans, and it still had to invest a lot of time, effort, and incentives into spreading the word about its campaign.
Finding a Sweet Spot in a Niche: D Programming Language Conference
Andrei Alexandrescu, a D Programmer, was part of a group that wanted to organize an annual D Programming Language conference in the Bay Area in 2013. To do it, they needed funding for the rooms, speakers, food, and other conference amenities, and they decided to reach out to the D Programming community using Kickstarter in order to fund it. In one month, they raised $30,855 of their $29,999 goal.
According to Andrei, the conference’s campaign succeeded because of its niche appeal, the length of the campaign, and the group’s ability to find initial investors. “I think one month is a sweet spot,” Andrei says. The group built momentum from the start by lining up some initial investors through their personal networks and by posting about the conference in targeted areas, such as D Programming forums, Hacker News, and Reddit. “Try to find some reliable contributors to seed it,” Andrei says, because when people are convinced the project will make it, they are more likely to help it get there. Once the campaign reached 50 contributors, they extended the reach of their network by emailing donors and asking them to spread the word. This strategy and the short timeline for funding kept up the campaign’s momentum, without major lulls. Once they reached their goal, the successful campaign gave the conference so much credibility that Andrei’s employer agreed to provide and pay for the conference’s venue.
Last words of advice:
Though a successful crowdfunding campaign gives a project credibility, Andrei cautions, “It’s a leap of faith, and you can lose face very easily… If it fails, it can be very disappointing and can hurt your project’s reputation.” He also advises to be aware that contributors can retract their donations last minute, which happened to them early on in the campaign. Had it happened later, as they approached their deadline, those retractions could have cost them the entire pool, so it’s always best to plan for a cushion.
For further reading on crowdfunding best-practices, start with these resources:
Raising Money Through Crowdfunding? Consider These Best Practices for Success | Entrepreneur Magazine
The Untold Story Behind Kickstarter Stats [INFOGRAPHIC] | AppsBlogger
Successful Kickstarter Campaigns | Garrett Gibbons
Kickstartup | Craigmod.comAbout the Author: Alexa Lightner is one of the Space & Community Managers at Workbar. Contact her via email email@example.com or Twitter @alexalightner.