When you’re a maker of stuff, crowdfunding is a great way to test whether your product has legs before you spend a great deal of time (and money) creating something no one actually wants.
As a ‘maker’, trying to fund new designs from soloist cash flow is pretty tricky. Which means the problem we all face is: how to find a chunk of money to give a new idea a go?
For me, crowdfunding seemed to be the answer.
(For those new to the term, crowdfunding is usually enabled by an online platform where you can present a project and ask for backers, usually many people pledging small amounts that allow you to reach your funding goal.)
There is an amazing array of projects to see on these platforms: publishing, films, performance, music; thousands of projects running at any one time ranging in quality from the really lame to the really corporate, worth hundreds of thousands of dollars.
Here’s how it works in rough terms:
- You establish a campaign for your project using the inbuilt templates within the platform.
- You set a target budget that will allow you to achieve your project (in my case, I was crowdfunding production of a new piece of climbing equipment I’d designed).
- You present your idea to potential backers in words, images, and video on the platform.
- You offer incentives/rewards for people to back your project (in the case of product design it is usually one of the items you are producing).
- You set a period for your campaign to run, (around 30 days is recommended).
- If you reach or exceed your funding goal by the end of this time, the project is funded.
- Money is then drawn from the backers’ accounts (they register it when they pledge), fees are deducted (5% to Kickstarter plus 3 to 5% in handling/card fees) and the remaining amount is deposited into your account.
- Then it’s your responsibility to deliver what you have promised to the backers: go into production, dispatch all your rewards, and communicate with backers throughout this process.
If you don’t reach your goal no money is drawn from your backers and the campaign is over.
My experience with launching a Kickstarter campaign
I’ve been designing and producing furniture for over ten years. New products have always come from commissions (rare) or bootstrap funding, with quite a few expensive failures in the early days. So the possibility of funding new ideas this way made good sense to me. I also considered it a good way to market test those ideas.
From my passion for rock climbing (a relaxing pastime less risky than small business!) I’d come up with a piece of equipment that was a leap ahead of the existing tool for that task. Given this was outside my core business I thought crowdfunding would be the way to do this with little capital.
It’s been about two years since I came up with the design. After a secret proof of concept prototype worked I was keen to go further and began to formulate how to proceed. I must mention here I have an industrial design degree and a clear idea of product development and intellectual property from past experience. So at least I had all that learning behind me!
After talking extensively with a friend about his Kickstarter campaign (one that didn’t get funded) I used that experience and advice to build a plan which was roughly this:
- Create a brand, and build a blog around it. As the product I was going to crowdfund was climbing related, I used the blog to engage with the online climbing community by offering useful information via original and curated content.
- Establish a social media presence and work to grow it, primarily via Facebook and Instagram.
- Test the response and practice making(and talking on) video by offering a few products.
- Prototype and develop the new tool.
- Start the IP process via a provisional patent with the help of a patent lawyer friend
- Launch a ‘learning’ campaign on Kickstarter for another climbing product to expand the network and brand (because they do say your first campaign always fails)
- Launch my second campaign, this time for the product I really wanted to crowdfund.
It’s probably taken about a year to get all this done while juggling other commitments.
The most critical bit about the above involved expanding my network of connections. After all, a good idea that no-one knows about is unlikely to get traction.
How did I expand that network of connections?
- Blogging was easy as I’m genuinely interested in climbing and keen to offer useful content.
- Reposting content from other climbing sites I liked led to a connection with a great US site, one that proved to be invaluable to my campaigns.
- Climbing forums were another great arena but I was careful in walking the line between outright promotion and contribution. I had a lot to learn about forum life as I’d not spent much time in any previous to this project!
All this work established an online personality that was genuine, engaged in climbing, and not too self-promoting.
My first ‘learning’ Kickstarter campaign was mostly a trojan horse. It was for a product design that I quite liked and actually used in my own climbing but I didn’t want to start out with my strongest design and fall short. That first product got to 22% of its funding but taught me a lot about Kickstarter: the basic operation of a campaign and the feedback I got about what and how I presented.
I also made a couple of real connections in climbing media from that first campaign and these proved invaluable the second time round. Especially when I was lost in my 100th edit of the campaign and getting nowhere!
My second campaign stepped up several notches with a professionally shot and edited video. It’s important to know that your campaign video needs a proper story arc (even though it’s only three minutes) and clear expression of the product.
This second campaign video also included more of me as a character which I believe is important to backers who are deciding to support you or not. The resulting video was much superior to my own phone-shot stuff the first time round where I’d just focused on the benefits of the tool which was pretty daggy.
Another thing that’s important to know is that crowdfunding is highly competitive these days with big companies using Kickstarter as a proving ground to test the market for new products.
What this means is it can be quite hard to get seen. My current project barely registers in the projects selected to feature on the Kickstarter lists. And even though I’m half way through and almost fully funded, my 83 backers are low compared to 1500 for other projects.
It also seems that US projects feature well (perhaps because Kickstarter in Australia is relatively new).
Happily I’m not dependent on the listing feature on Kickstarter as I’m accessing a very defined market who like to talk about gear. Most of my backers came from outside Kickstarter (you can see this kind of data on your campaign dashboard).
So I’m currently half way through my second campaign (99% funded as I write) and getting excited about going into production. Here are the points currently front of my mind if you’re looking to launch your own successful crowdfunding campaign:
- Get support in making your campaign, it’s a big task: filming, editing, proofreading, images, social media … I was lucky to get help from friends.
- Spend a bit of time reading the guides and forums for your platform as you build your campaign.
- Think through your budget for delivering on promised rewards carefully: include fees and shipping costs as these all come out of your goal amount.
- Build your network before you launch your campaign and keep it going throughout.
- Networking includes engaging in the Kickstarter community and backing other projects, just $5 will connect you.
- Get feedback on your campaign, you can send a campaign preview link to friends before you go live.
- Take a little break before your launch (you submit your campaign for approval and once clear, you have the option to launch anytime). I went straight from approval to launch already tired from all the late nights editing.
- Clear the decks of other work for a period. I’m struggling with a backlog of orders in my furniture making business while trying to run the campaign.
- Understand that it’s a lot of work to get to launch, then it scales up with promotion and being responsive to your backers. Be ready to go with ideas for updates and getting the message further out.
- Ignore the Kickstarter parasites offering you mass exposure for a price: you’ll get these every day but you need to sort this yourself direct with your market because, as tempting as they sound, I expect they would be too broad as well as extremely annoying.
My product idea is proving to be a strong and is gaining a lot of momentum with both media and retail interest. I hope to report again later this year with the story of production and fulfillment and the steps into ongoing distribution or partnering with a bigger company.
In the meantime – if you’re thinking of launching a Kickstarter campaign yourself and have any questions for me … go right ahead and ask them below!