Guy Windsor

Consulting Swordsman. Writer.

Crowdfunding a Book: behind the scenes, in gory detail.

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AL-front-cover

I get asked a lot about crowdfunding campaigns, especially for writers, so I thought I would do a complete breakdown of exactly where all the money came from and went to in my last campaign, which raised 12,093 euros in 30 days. Be warned, this post will make the accountants among you happy, but has nothing whatever to do with actual swords, writing, or anything other than the business side of running a crowdfunding campaign. For more general advice on crowdfunding, go here.

First, some background:

I wasn’t sure whether I should even do a campaign for this book. I had sufficient funds to pay for layout and editing without it, and as a non-fiction sequel, the already tight niche is even smaller. I asked my wife, and she said to do it so I did.* Four hours later I had shot and cut the video (with a very sore throat, hence the growl), worked out the goal and perks, and written the story text. I sent a link to the draft of the campaign to my mailing list, and was rewarded by some very useful feedback over the next few days. Another hour of work, and all the corrections that I could make in a reasonable time were done. Several folk suggested re-shooting the video, but I was too sick and it would have taken too long; because I hadn’t really planned this, we were only about 30 days out from Christmas.

The Campaign

I launched the campaign on November 23rd, and it hit its realistic target of 2,500e in about 9 hours. Realistic in that it would be enough money to pay my freelancers, and realistic in that I could reasonably expect my current readership to buy enough copies of the new book to meet that target. This was largely due to my mailing list; the people on it do tend to want to read my books and generally support my work. Keeping them informed, and perhaps more importantly asking them to get involved, really helped.

When working out your goals and perks, it is very important to bear in mind the difference between fixed and variable costs. In brief, the fixed costs are what it takes to produce the first copy: paying the freelancers, uploading the book to the printers, my time to get it to that point. The variable costs are what it costs to produce each copy after that: in this case printing and shipping, indiegogo and paypal fees, sales tax, and so on.  A common pitfall of crowdfunding campaigns is to underestimate, or simply forget, the variable costs. You might raise all your fixed costs and still end up losing money to actually fulfil your orders if you're not careful.

Contributions over time

The campaign then followed the typical pattern; a slump in the middle, followed by a rise at the end. Starting strong certainly helps to get the word out; the day I launched, it did so well so fast it made it onto the Indiegogo homepage. According to the stats, 1,444e of contributions came direct from Indiegogo, which suggests that people found the campaign from outside my usual channels.

Referrals by website

Where on the net are people coming from?

Most of my marketing was done through my email list, and through Facebook. According to the stats, 6,450 came from “direct traffic, email etc.”, and only 2,441 through Facebook. Twitter brought in a princely 50e. My own website, guywindsor.net, brought in 667. This is a pretty convincing argument in favour of direct marketing, I think!

Referrals

You can see from this graph below that almost all of the trackable referrals were done using the link associated with me: 8,198 e.

I have edited out the names of the top referrers, because several of them backed the campaign anonymously.
I have edited out the names of the top referrers, because several of them backed the campaign anonymously.

Again this is not a surprise, and does not diminish the excellent and helpful efforts of many kind people. It’s just a fact that nobody does as much publicity as the ones who benefit most directly! My link generated 207 contributions in total from 1855 referrals; 8.96 referrals for every contribution; 4.419e/ referral, average contribution 39.60.

I also ran a referrals competition. There were two categories: eyeballs and sales:

Eyeballs: Whoever sends the most people to see the campaign will get two free copies of the book in hardback, sent wherever you want.

Sales: The person whose referrals generate the highest sales will also get two hardbacks, and can commission an instalment of The Swordsman’s Quick Guide, on any topic you like. I will write the booklet for you and publish it (at my discretion; if your request is vastly off-topic I might choose to simply send you the finished booklet for you to do with what you like).

If the same person wins both categories, I  add a runner-up prize; whoever comes second in the sales category gets a free hardback, signed and sent wherever you like.

How do you take part?

You need to log in to Indiegogo, which generates your own specific url for the campaign, which will look like http://igg.me/at/longsword2/x/00000 where the last set of numbers is your unique identifier. Then share this link as best you can, and Indiegogo will track the link for you.

(source)

The winners of the competition were:

Cecilia Äijälä 152e from 4 contributions and 334 referrals

Nico Moeller: 150e from 3 contributions and 20 referrals

Gindi Wauchope: 100e from 2 contributions and 53 referrals

Cecilia, the winner, generated four quite large contributions totalling 152e from 337 referrals. That’s 2.217 e/referral, but average contribution 38e.

Referrals are tricky; some kind souls managed to send 40+ people my way, and I failed to sell them a single book. The lesson here of course is that not all traffic is created equal.

Where in the world are people coming from?

It’s also interesting (to me at least) that the contributions by country are quite different to my usual pattern of book sales. In both cases the USA is the biggest market, but here Finland is the next biggest, and by quite some margin. This makes sense given that I introduced historical swordsmanship to the country and have been largely responsible for its spread here, but through normal channels, as far as I can tell, my books don’t do very well here at all! I guess folk are used to being able to ask me in person.

Contributions by country

 

The Perks:

Controversially, I didn’t bother with any perk below 15e for the ebook. This was deliberate. It has been my experience that backers at the lower perk levels are just as, if not more, demanding of my time and attention as those throwing much larger sums at me. The cost:benefit ratio does not work out. I also figured that this was as low as I wanted to go price-wise to sell the book, so what, really, was I going to offer readers who can’t afford my book? I have a ton of free stuff online already, so it’s not as if poorer or less committed people can’t have a fair crack at my work.

This time, nobody went for the “Patron” perk at 1,500e; this was actually a relief, as I wanted to dedicate this book to two friends of mine, but I also couldn’t afford to pass up that kind of money if it was offered. Our glorious Patron Teemu Kari put 25,000e down to become the patron of Audatia, and the excellent Christian Cameron gave 750 dollars to be the patron of Veni Vadi Vici, so it’s worth having these more expensive perks, just don’t rely on them.

These are the perks, and how they performed. I can't get tables to work in WordPress, hence the screenshot from Pages:

Perks breakdown

 

The Stretch Goals

Remember, I was sick, and it was the run-up to Christmas. I couldn’t face the idea of creating a bunch of exciting stretch goals that would then commit me to a bunch of work I might not have the energy for. So the first stretch goal was, if we reached 5k, I would bundle two print and play Audatia decks into every perk. I never got round to creating another stretch goal. I felt that the value was there already; backers at even the 15e perk would get The Medieval Longsword in ebook form, Advanced Longsword: Form and Function in ebook form, and the two decks, a total value of about 40e if you bought them all separately.

In sum, the campaign generated 12,093e from 303 contributions from 273 backers.

Think like a writer

If you're a writer, thinking about doing this for your own book, take a moment to observe that most ebooks sell for under 10 euros, and most paperbacks for under 20. Yet in this campaign, the 303 total contributions cost an average of 39.91 euros. In other words, the price anchor that is in force with books, is clearly not present in the same way here, though all  I am doing is selling books. The value added, for the reader, is of course the feeling that they are directly contributing to the production of work they value. And they are. I cannot stress this enough: this is not in any way taking advantage of the backers; it's giving them the opportunity to do something they want to do, namely get involved.

So that’s where the money came from: where did it go?

Twelve thousand euros looks and feels like a big pile of cash, at least it does to me. But it is really important for you to see where it all goes, and at the end of the day, how much of it is actually income? It turns out that about 31% of the total raised is income.

Campaign funds minus costs

Note: The Medieval Dagger order: As you can see, this perk cost me 719.75e to fulfil, and brought in 926e. Of that 926, after Indiegogo's cut, Paypal's cut, and sales tax are taken off, we have, hmmmm: 747 euros, more or less. So that perk made me no money, but, and it's a big BUT: it made a lot of backers very happy

Note: Advertising:

For the first time, I used paid Facebook ads, to see what kind of traction I’d get. I boosted 3 posts, which generated

The Medieval Dagger perk update: 510 reach and 25 clicks for 5e

Something useful from the blog (re meditation) 1867 reach and 91 clicks for 14e

Ad re referrals competition: 672 reach for 23 clicks for 8e

Ad re stretch goal: 460 reach 14 clicks, 5.57

Total spent: 32,57 for a total of 153  clicks.

1841 clicks got 207 referrals and 8198e.

So: average: 4.453e per referral. 153/4.453= 34.36

So, the FB ads probably made a tiny profit, but not when you factor in IGG’s cut, Paypal, printing, shipping, etc. But if these were new readers, from outside my current sphere of direct influence, then that is disproportionately useful, as, if they like these books, they may buy the ones that came before and will come after.

Printing and shipping costs breakdown:

Total books to print:

Paperbacks: 202

Hardbacks: 93

Costs:

Paperbacks: printing: 202x 3.74 = 755.48

Hardbacks, printing: 93 x 8.34 = 775.62

setup fees: approx 100 e

transaction fees: 1.95/order = 273 orders total, minus 51 ebook only orders= 222 transactions to process, = 432.90

Total before shipping: 2064

Shipping approx: 1200e

Costs of printing and shipping total estimated: 3264e

Actual total according to my credit card receipt: 3235.99e. Looks like my maths ain't so bad!

And my time?

Let's also take my time into account. Direct work on the campaign itself ran about 8 hours, spread over the month. Time spent manually inserting 250 or so orders into Lightning Source, about 10 hours. Plus probably another 8 hours or so of work that I wouldn't have had to do without the campaign. Figure 26 hours or so. For an income of 3790.19, that's nearly 145e/hour which is much better than what I normally make writing!

What would the book have raised without the campaign?

A paperback of Advanced Longsword: Form and Function sold through the usual channels nets me 12.96e per copy. Multiply that by 202 (the total number of books sold), and we get 2617.97e

And the hardbacks would net me about 25.50 each, times 93  is 2371.50. Together that's 4989.47

But one thing is for sure; in the wild, my hardbacks don’t sell at 50% of the numbers of my paperbacks; a ratio of almost 2:1. more like 140:22 (tsc sales so far this year, paperback v hardback), or 6.4:1. At that proportion, 295 book sales would be 46 hardbacks, 249 paperbacks, which would net me about 3227+1173=4400, so nearly 600 euros less. Plus, that income would be spread out over several months, maybe a year, and so it would be that much harder to pay for the editing and layout (which are the fixed costs).

So the campaign clearly generated significantly more income than the likely sales through normal channels would have, and more importantly, brought a significant number of new readers.

Summary

I wrote this post primarily so that the backer of the campaign could see exactly where the money went. Transparency is key in crowdfunding. But I hope it's also useful to other authors thinking about running their own campaign; seeing how the costs break down, and being able to estimate how much of the money you raise is income should be very helpful. I am very pleased with how this campaign went, and very grateful to my excellent readership who support the work I'm trying to do.

If you have any questions, comments or suggestions, let me know in the comments below; and if you know anyone who is thinking about running a campaign, please share this with them.

*top tip for married men: your wife is always right.

The 3 principles of successful crowdfunding

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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!