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The 3 principles of successful crowdfunding

Are you thinking about starting a crowdfunding campaign? Then this post is for you.

Crowdfunding is both an extremely useful and effective way to raise funds for a project, and a deadly trap in which your reputation can be permanently destroyed. It is also a rather new development, and therefore many people are trying it for the first time. Which may be why, so far, only 43.5% of Kickstarter projects have succeeded, and, according to this article, less than 10% of Indiegogo campaigns (my platform of choice) make it. I have run four campaigns so far, with gradually increasing success: my first “failed”, raising only 37% of its target; my second raised 102%, my third, 249% and my current one  has two weeks left to run and is already at 489%. [Update: it finally raised 13,510€, 676% of its goal, and the book was published in July.] I am planning a series of blog posts about what I have learned along the way. As with any art, there are fundamental principles and specific skills. I will outline the principles here, and cover the skills in later instalments.

There are lots of different platforms (Indiegogo, Kickstarter, Funded By Me (see here for a helpful list)); types of campaign;  types of funding; and so on. In this my first post on the subject I thought I'd start with the foundation that is common to all successful crowdfunding campaigns regardless of type or platform. Three basic principles that if you put them first, will dramatically help your campaign succeed, and even if it should it fail, follow these guidelines and the failure will do you no harm. I cannot overstate the importance of this last point: run a campaign badly and any future efforts will also fail. Run it well, and even if it fails, you can pick yourself up and try again with no harm done.

The three principles of successful crowdfunding as I understand it are:

1) Transparency

2) Credibility

3) Value.

Let's take them one at a time.

Transparency

This is where it all starts. You must be completely open and honest about what your project is about, who you are, what you are doing, what mistakes you make, everything. Your potential backers will recognise transparency in the way you present the campaign, which will enhance your credibility; they will also reward transparency with trust when you make mistakes, fail to meet obligations, or in any way err. And you will err, often and publicly, if you are a) human and b) doing something new. You can survive almost any mistake, so long as it is a) honest; b) you are transparent about it; c) you apologise; and d) you offer restitution. For a trivial but amusing example: I wasn’t 100% sure we would get the pdf version of my game, Audatia, out on the deadline of 20th March. So I promised 10 push-ups for every day we were late. We were a day late. Here are the push-ups.

Warn your backers immediately of any likely delay or problem; imagine the worst-case scenario; estimate accordingly, and be transparent about your progress. People hate being kept in the dark more than they hate being let down.

Credibility

You need to establish not only that your project is way cool, but also that you (or your team, ideally) are able to make it happen. So, credibility is about three things:

1) your skillset

2) your ability to raise the funds

3) your ability to execute the plan in the time and with the money specified.

Your skillset must be clearly sufficient for the task in hand. Let’s take this example: the Roost. The video here shows the designer physically making the high-tech laptop stand. No question about his skills. Or here: the choose your own adventure Hamlet. The video makes it 100% clear that this chap can do what he says he will do. For my own projects; nobody would doubt my ability to write a decent book and get it to market, nor teach swordsmanship. But when we were raising funds for Audatia there was no reason to believe I could design a card game, and quite right too. I couldn’t. But we didn’t go live until we had a playable draft of the game; the campaign was not for me to make a card game: it was to pay for the artwork and printing. Just to make sure, we had draft artwork for some cards already. Backers could see what artwork they would be getting. No credibility problem.

People generally won’t back a campaign that they think won’t make its target, so setting a realistic goal works both ways. You must raise enough money to get the job done, or you end up bankrupt, credibility shot to hell. But if your target is too high, people will be reluctant to back it because they don’t want to get on board a disappointing train. We had this problem with Audatia: the goal was 23,000€. That’s a lot of money for a first-time game company. We could see on message boards etc that there were people who wanted the game but thought we’d never hit such a high target, and so didn’t back us until after we crashed through it. I’ll deal with the art of goal-setting in a separate post, but bear in mind here: your goal must be credible on both fronts: enough to get the job done, but not unrealistically (incredibly?) high.

Then you have to lay out for your backers how this money is enough, combined with your skillset, to make good on your promises. Your personal credibility is at stake.

Value

Ultimately, your campaign is selling something. It could be a physical product, a service, or a feeling of creating a better world. Whatever it is, you have to offer value. A reason for people to buy your thing now. A great example of this is giveaways to backers only; sure, you can buy this in the shops in a year’s time, but our backers not only get it first, they also get this other cool stuff. Wait to buy my longsword book, sure, it’ll be on Amazon by July. But buy it now and you also get most of my back catalogue as free ebooks, and a whole new book not yet published. Good value, if you like swordy books. [Update: This is no longer available, of course.]

For most backers, in my experience, the key added value is that they become part of the process. You, the artist, producer or whatever, need them to make it happen. Your magic widget or fabby-do zombie film, cannot happen without them. They get to be Lorenzo dei Medici, you the humble artisan (eg Michaelangelo). Be sure to let them know that you need them. It’s the truth, after all.

At the moment, I am getting on with making good on my campaign promises (we are working on fulfilling one of Audatia’s stretch goals right now, the Lady Deck, and I’m editing Swordfighting for Writers, Game Designers and Martial Artists), and so am not writing the next Crowdfunding post just yet. While you are waiting for the next instalment, you might find these other resources on the subject useful.

Tim Ferriss: how to raise 100,000 in 10 days… well, maybe! Lots of useful stuff here though.

Wikihow: not a bad place to start.

Indiegogo‘s own “playbook”.

Plastic Hallway: how not to do it! Some good advice.

If you enjoyed this post or found it useful, please share it with your friends by hitting one of the buttons below. The speed at which the next post on this subject (how to set your perks for maximum effect, which is the blackest of black crowdfunding arts) gets written up, will be proportional to the number of hits this one gets.

Thanks for reading, and for sharing!

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4 Responses

  1. Hey guys can you take a minute to fill out my survey on crowdfunding? It’s for a university project so I’d really appreciate your insights. bit.ly/crowdfunding-survey

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