Transcript Steps to effective crowdfunding campaigns April 15x

Run an insanely successful
campaign
Craig Armstrong, Ph.D.
https://www.kickstarter.com/projects/1778393222/alabama-garage-surf-and-punk-compilation?ref=home_location
What is crowdfunding?
Unpacking the unique attributes of
Crowdfunding
• Your offer: unique, novel, “no one else has something like this!” –
customers are backing both your offer and you
• Experimentation: low up-front costs to test market interest
• Validation of your product, project, or service idea: “everyone’s a liar
until they’re a buyer” – paying customers = legitimacy
• Reward structure: focus on uniqueness, individualization, and
privilege; your campaign and rewards offer benefits to your backers’
social status
• Ownership: you don’t give up any equity in your venture
What you get from your successful
crowdfunding campaign
• Control: you control everything
• Money; sometimes much more than you wanted
• Equity: you don’t give up any ownership in your firm
• Validation of your product, project, or service
• A direct conduit to shoppers
• Relationships with Loyal early customers who will be your
“evangelists” for future campaigns
• Useful Advice: from experienced viewers you’ve reached
A crowdfunding
campaign consists of:
1. The product, service, or event
2. The pitch
3. The video
4. The rewards
5. The funding goal
6. promotion
Your task is to look at as many projects that have succeeded (and
failed) to understand the subtle formulas for each component
1. The product,
service, or event
The product, service, or event
• Does the casual observer find it interesting?
• What makes it unique, exciting, or novel?
• Is it compelling enough that people will pay for it?
• How big is the audience for the offering?
• Who is the intended audience?
Example: Luke Iseman – Project A
# backers
$ pledged
$ project goal
The offer
85 backers, $1,164 raised, < $14/person
Pledge level
Reward
$5 Ebook and full video of the conversion process,
with each section available as I go.
# backers
$ raised from pledge
level
34
$170
40
$600
1,000
$50 An hour consultation by phone with me about
your container plus above
4
$200
300
$150 Half-day visit to project site in Austin, Texas (y'all
get yourselves here).
0
$0
100
$2,500 I will visit your site, within the continental U.S., at
my own expense and spend a weekend helping
you with your sustainability project
0
$0
$15 Printed book signed by me upon project
completion plus above.
Goal of $15,000 with average pledge of $14 requires 1,071 backers (i.e., >> 85)
6
Value proposition
Customer segment
What you can do
1. What can you provide to a customer group that will deliver value to
them?
2. What features and benefits will deliver that value?
3. How many people are in your target market? Start by roughly
quantifying how many people you and your teammates personally
know (email, social media, offline, etc.) and who you can count on
to contribute. The people you know will help pool the initial funds
and give your campaign the momentum it needs. Think about how
you will get in touch and interest them in your campaign.
2. The pitch
Pitching
• Pitching is a process intended to capture your audience’s interest by
making them identify with an unmet need or “big pain,” then
introducing your own brilliant solution
• In less than one minute, you describe the pain, solution, how you’re
different, why you? (or a status update), and a call to action
• Generally, Your goal is to bait the hook, not close the deal – your
product or service description and rewards should help close the deal
• In crowdfunding the goal of your pitch is to make your campaign page
“sticky” so that they will read your story and pledge-reward offerings
What you can do: A five-step approach
1. Open with a big pain or unmet need or WOW-inducing statement that
instantly captures your audience’s attention
2. Follow your opener with your brilliant solution
• Show the product or service
3. State how your offering is different from what audience is currently using
– cherry-pick lesser features of your competition
4. Let the audience know “Why You” are the person they should back (or)
• Let them know where you are in the project (status) (or)
• Emphasize the cool factor or utility to current customers
5. Close with a call to action (pledge now, share this link with your friends,
retweet, etc.)
https://www.kickstarter.com/projects/1630615271/daks-spices-salt-free-spice-blends-add-the-daks?ref=live
3. How to use video effectively
The key to your campaign’s success
Why video?
• Video offers a deep, rich communicative experience that can engage
the viewer more effectively than text or pictures alone
• A video says you care enough about what you’re doing to put yourself
out there
• A video is by far the best way to get a feel for the emotions,
motivations, and character of a project – it’s a demonstration of
effort and a good predictor of success.
• As a result… “projects with videos succeed at a much higher rate than
those without (50% vs. 30%)” (Kickstarter website).
People are funding you
• Crowdfunding is (by definition) all about community
• In most cases, people are funding you as much as they’re funding
your project
• Let them see you, hear your passion, and get excited with you
• Make sure you come across as competent and trustworthy
• Be energetic, have fun, and smile* when you’re on camera
* But make sure you’re smile is genuine – see next two slides
People have seven universal emotions
Source: http://temasys.com.sg/vidyoedm22102013/
10 fakers, 10 not – Most people can tell when
you’re faking a smile
Take the test yourself: http://www.bbc.co.uk/science/humanbody/mind/surveys/smiles/
Get your viewer’s attention!
• Hook them with a compelling, emotion-invoking problem or
a wow-inducing statement
• You have 10 seconds or less to hook viewers and convince
them that
1. your video is worth finishing, and
2. your project is worth investing in.
Cover these 6 topics
1. Tell viewers who you are.
2. Tell viewers the story behind your project.
3. Openly ask for people's support, explaining why you need it and
what you'll do with their money.
4. Talk about how awesome your rewards are, using any images you
can.
5. Explain that if you don't reach your goal, you'll get nothing, and
everyone will be sad. “we don’t want that to happen!”
6. Call them to action! (“Please support my Kickstarter campaign now
with a pledge”) Thank everyone!
What you will need
•
•
•
•
•
•
•
•
•
Camera: if smart phone, shoot in landscape
Tripod: to eliminate shakes and need for extra team member
Lights: room with lots of natural light or an outside location
Sound: smart phone < 1 ft from your mouth – you will get good quality
sound just using the ‘voice memos’ app
Editing: Movie for Mac, Movie Maker for Windows, Camtasia
Graphics: Picmonkey
Location: natural light, power, sound
Script: with beginning, middle, and end – storytelling!
Storyboard, check lists and logging shots: Get organized, dammit!
Use a storyboard (even if you can’t draw)
• It’s a visual interpretation of a story or script
that depicts every scene, action and camera
movement
• The storyboard has to work technically and
follow the same rules as a film; that means…
• They must have shot, scene and panel
numbers and be labeled with action notes
and dialogue
• The most important aspect of the storyboard
is communication, not drawings
Source: Karen J Lloyd
Storyboard examples
Storyboard with shot, scene, panel numbers,
action notes and dialogue
Shot planner
Video shot log
• a written record of the shots on a tape or disk
• it really helps to do the shot log during the
shoot — it will be easier and save you time
later
Source: http://www.mediacollege.com/video/production/shot-log/
Example: Star Command
[ Click to play video ]
Other issues – “legal” media
• Don’t infringe on copyrights and trademarks with music or artwork
• Open source music resources: SoundCloud, Vimeo Music Store, Free
Music Archive, and ccMixter.
What you can do
1.
2.
3.
4.
5.
Develop a script for a compelling story
Create a storyboard for your video
Get the right filming and editing equipment
Project passion, trustworthiness, and competence
Edit and test on friends
4. Rewards
Notes about rewards
• Great ideas for CF campaigns can fail because of bad rewards
structures
• Consider:
•
•
•
•
How much $ you need
How many people will likely want to buy your offering(s)
How many people will actually view your campaign page
What you want to accomplish with each level of matched pledges and
rewards
• $20 pledge = copy of DVD
• $50 pledge = signed poster + DVD
• $500 pledge = all of above plus
credit as executive producer
• $2,500 pledge = all of above plus
invitation to exclusive launch
party the best benefits often take the form of
EXCLUSIVE offerings through
merchandise, advance access to new
releases, or more personal, privileged
incentives.
Value of reward
Example: "Your Amazing Movie Project"
Pledge $
Example: Luke Iseman – Project A
# backers
$ pledged
$ project goal
The offer
85 backers, $15K goal, < $14/person
Pledge level
Reward
$5 Ebook and full video of the conversion process,
with each section available as I go.
# backers
$ raised from pledge
level
34
$170
40
$600
$50 An hour consultation by phone with me about
your container plus above
4
$200
$150 Half-day visit to project site in Austin, Texas (y'all
get yourselves here).
0
$0
$2,500 I will visit your site, within the continental U.S., at
my own expense and spend a weekend helping
you
0
$0
$15 Printed book signed by me upon project
completion plus above.
Goal of $15,000 with average pledge of $14 requires 1,071 backers (i.e., >> 85)
Luke Iseman (and team) – Project B
# backers
$ pledged
$ project goal
The offer
136 backers, $5K goal, $47/person
Pledge level Reward
$5 A thank you note + copy of biochar study and inclusion of your name in study
# backers $ raised from
pledge level
12
$60
8
$80
$25 Small bag of Black Revolution (enough for 4-5 potted plants) + study
38
$950
$35 Same as $25 level but you get your order first
36
$875
$50 A medium bag of Black Revolution (enough for 8-12 potted plants) + study
13
$650
$100 Five small bags of Black Revolution (enough for 20-25 plants) + study
7
$700
$150 50-lb bag of Black Revolution. Enough for several raised beds.
7
$1,050
1
$1,000
$10 Small Black Revolution burlap sack with printed logo + study
$1,000 Bulk order (500-lb) of Black Revolution delivered anywhere in the Continental
US.
Where’s luke?
Where’s Luke?
“We can build distributed
biochar production
facilities inside 20'
shipping containers. This
means we can send
production equipment
directly where the
demand exists.”
The hidden
costs of
successful
campaigns
Average $32/pledge
Source: https://www.kickstarter.com/projects/starcommand/star-command-sci-fi-meets-gamedev-story-for-ios-an?ref=live
Pledge-reward structure
Pledge level Level name
$5 Redshirt
Midorian
$25 Ambassador
Starship
$100 commander
$ Raised /
# Backers level
97
$485
Reward
MP3 of game soundtrack
Game promotion code, upcoming
DLCs, exclusive room, stickers, phone
backgrounds + above
T-shirt, poster, map, + above
954
$23,850
97
$9,700
2
$2,000
In-game character likeness, credits, +
$1,000 Fleet Admiral above
Totals
1,150
$36,035
Pledge level and number of backers
954
1000
900
800
Number of backers
700
600
500
400
300
200
97
97
100
0
2
$5
$25
$100
$1,000
Pledge Level
“$17,000 more than we wanted!”
$
$
$
$
$
$
$
$
$
$
$
37,000
(2,000)
(3,000)
(10,000)
(6,000)
(2,000)
(3,000)
(4,000)
(1,000)
(1,800)
4,200
Raised in KS campaign
Pledges never materialized
Fees from Kickstarter and Amazon
Reward fulfillment costs
Game music composer's fee
Poster design artwork
Presence at PAX East trade show
Lawyers, accountants, professional services
iPad units needed to test game
Taxes (30%)
Disappeared on daily costs and incidentals
Solution humbly suggested: Use a business model canvas
Make sure costs and revenues are “congruent” and that revenues > costs
Which character is your crowdfunding
campaign?
Who’s
Jane
Jensen?
Link to Kicktraq
Number of Backers by Pledge Level
$10,000
$5,000
$4,999
$1,500
$1,000
$515
$500
$265
$250
$239
$224
$215
$200
$115
$102
$101
$100
$99
$51
$50
$30
$16
-
200
400
600
800
1,000
# backers
1,200
1,400
1,600
1,800
2,000
5. Funding goal
How much money to you really need?
• Exposure and interest
• How many people will want your offer?
• How many people will view your campaign?
• Can you scale your offering in terms of more valuable rewards for higher
pledges?
• Other considerations:
• Are you testing a concept to validate a new product or service?
• Do you need cash to start up a new venture?
• Are you trying to build a “following?”
6. Promotions
Steve blank on customer development
Source: http://worxsolution.com/what-is-crm
Layer new
features
Value
attributes
Upsell
Engage
Referrals
Awareness
Purchase
Evaluation
Source: http://www.theingproject.com/blog/why-is-crowdfunding-a-powerful-marketing-tool
How you can promote
• Use your early backers to
promote your campaign (they
want you to meet your funding
goal or they get nothing)
• Social media!
• Customized landing pages
targeted to different customer
segments for a/b split testing
(launchrock.com)
• Use Google Analytics and
Adwords
Kickstarter tells the creator the exact
order backers pledge in.
What you can do: Promotions
1. How many people do you know? (email, social media, offline, etc.) and
who can you count on to contribute? The people you know will help pool
the initial funds and give your campaign the momentum it needs. Think
about how you will get in touch and interest them in your campaign.
2. Use the business model canvas to determine your channels and
customer relationships
3. Use a personalized email –the average contributions amount through
email is about 20% higher than for contributions through other sources.
4. Use social media platforms – about 22% of the funds raised by a
campaign come from people clicking on social media posts – direct traffic
to you campaign site with landing pages and posts to social media –
make a special Facebook page for your project
What’s next?
The reality of crowdfunding
"If you think crowdfunding is easy, guess again: It's
definitely not. It's actually pretty scary because you
have to be prepared to put yourself out there on
display [for the public]. It's the Internet and you
have to expect mixed feedback.”
- Jane Jensen, Pinkerton Road: A Year of Adventure
(but also) The reality of crowdfunding
“Most videos are just someone telling their story
straight into the camera. You can spend days
shooting and editing, or you can just knock it out
with a couple friends on a Saturday. It doesn't have
to be perfect, it just has to be you.”
- How To Make an Awesome Video, Kickstarter Blog
Free resources
• IndieGoGo crowdfunding tips
https://www.indiegogo.com/crowdfunding-tips
• Crowdfunding Bible http://www.crowdfundingguides.com/The%20Crowdfunding%20Bible.pdf
• Kickstarter Blog - https://www.kickstarter.com/blog
• FundMeFundYou – http://fundmefundyou.com/crowdfunding101/
Campaigns cited in this presentation
• Black revolution
• Jane Jensen’s “a year of adventure”
• Luke Iseman shipping-container-to-off-grid-house
• Star Command