I’ve heard almost every pitch you can imagine from people that want to crowdfund their ideas. As a founder at The Ignite Agency, I’ve had the privilege of working on some of the most forward thinking crowdfunding campaigns in the world. We’ve tackled some huge concepts and gotten featured in places like Variety Magazine, CBS, NBC and CNN. You can see more about the agency in the links provided at the end of the article.
CROWDFUNDING ISN’T TO GET FREE MONEY
The most effective reason to crowdfund is to gain market validation for your project / concept / product through an initial customer base and to get publicity. It’s not easy to launch and run a successful campaign.
The most common thing I here from prospects is “Oh wait, I have to pay for you to create my campaign?” The majority of inventors, and entrepreneurs that reach out to us don’t understand what truly goes into making the campaign. There are some large hard costs associated with creating a professionally executed crowdfunding campaign.
The video, the most important part of the campaign takes some very costly resources to produce well. Anyone can shoot and put a video up, but creating one that converts into real dollars takes skill and talent.
You need press. You need big press. There’s a reason why 70% of crowdfunding campaigns fail. The biggest being that the proper traffic and attention was not garnered for the campaign. In order to get featured in Variety or CNN or Huffington Post, you need an extraordinary publicist (someone who knows how to speak the language of the media), to craft your media pitch in such a way that it will get picked up by the producers and journalists that will drive the traffic you need to your campaign.
You need to build an audience that actually cares about your project, idea, app or product. That requires extensive online marketing to generate pre-interest for your campaign months before you actually launch. It takes an expert truly versed in the online lead-generation field to create the necessary funnels and branding required to attract the kind of attention needed for a successful crowdfunding campaign.
40% of your fundraising goal needs to be secured a month before you launch the campaign. You’re going to need the big support and the pushes from friends, family and supporters in order to prevent the campaign from stagnating and ultimately to keep pushing forward the Indiegogo or Kickstarter algorithms. Additionally, take your fundraising goal and cut it in half, then cut it in half again and then you’ll know the actual amount you need to target as your funding goal.
One of the most overlooked aspect of crowdfunding is creating the rewards structures that people actually care about. Knowing shipping costs, costs of production and margins are very critical in reward formation. Crafting the right marketing messaging and sales copy is even more important in incentivizing the crowd to even agree to give you their money in the first place.
I had an idea with my friend Andrew. We came up with the concept of Ghostfunding for those that don’t yet have the money to run a successful campaign yet. The idea is to create your campaign with concepts and prototyped images and to get non-monetary contributions to the campaign. What does that mean? For instance the campaign would ask, would you spend $350 on this? And the question is very simply yes or no. Essentially, the tool would be a way to validate product / market fit and to gain potential customer data in a much more efficient manner.