Crowdfunding Checklist: Step 2, Creating a Plan
So you’ve got a great idea for a crowdfunding campaign?
Do you know how to set everything up?
If you don’t, don’t worry. In step two of our series on creating a successful crowdfunding campaign, we’ll take a good look at some key tactics and tools you can use to make sure your campaign smashes through its goals and creates legions of happy fans.
The first thing you should do, before you even set up your campaign on Kickstarter or Indiegogo, should be to create a story around whatever it is for which you’re trying to raise money. Crowdfunding is somewhat like angel investing or early-stage capital raising for ambitious startups, in that the story you tell about your product, service, or production can encourage people to back you.
However, unlike angel investing or seed funding, you won’t just have to convince a small group of people that you’re doing something awesome -- you’ve got to convince hundreds or thousands of people that they should support you financially. That amplifies the importance of the story you’ve got to tell. If you want to create a new device, think about how you might present that device to an auditorium of interested early adopters. If you’re putting together a new board or card game, you’ve got to convince gamers around the world that your ideas are worth their time and money.
What makes you unique? What’s special about your offer?
How will it help or entertain or excite an audience? You may spend a good deal of time fine-tuning the story behind your idea, but that’s a good thing. A crowdfunding campaign without a compelling story is far more likely to be ignored than embraced.
Once you’ve got a story, you’ve still got a long way to go. It’s highly unlikely that you’ll be able to put together a great campaign on your own, and Indiegogo has found that campaigns managed by teams tend to raise three times as much money as campaigns run by one person. A great team will enhance your strengths and cover your weaknesses with their own strengths. If you’re a product design genius, you might need an engineer to make sure the guts of your product work well. A game designer without a good artist is like peanut butter without jelly. And no matter what kind of campaign you want to run, you’ll be starting at a serious disadvantage without a knowledgeable marketer or two helping you maximize your visibility and exposure.
A story and a team will give you major advantages over the average crowdfunding project, but they’re only the first essential steps towards launching a great campaign. You should have a solid promotional infrastructure in place before your campaign goes live, and that means you’ll need things like a website, a set of social media accounts for your campaign’s brand, a polished presentation for your product that includes things like teaser videos and pictures, and the beginnings of an outreach campaign that can generate interest before you raise your first dollar. We’ll cover many of these essential elements in greater detail in later installments of this series, but for now, it’s enough to be aware that having such elements will be worth the effort.
Here’s one critical question -- how much is all of this going to cost?
It’s easy to get swept up in the excitement of putting together a crowdfunding campaign, but the one thing you absolutely have to figure out is how much is all of this going to cost?
If you don’t understand the numbers behind your project, you can easily find your campaign spinning out of control. Even the most successful crowdfunding campaign can ultimately fail if its targets are unrealistic and the pricing of its tiers aren’t in line with the costs of developing and producing the products those tiers promise your backers.
The internet is rife with stories of crowdfunding “success stories” that imploded due to poor cost management after completing what initially seemed like enormously successful campaigns. Fidget Cube raised $6.5 million but suffered delays and quality issues from a poorly done prototyping. The campaign for a palm-sized drone called Zano raised $3 million but issues with components and core technologies left most backers with barely-functional flyers -- if they got anything at all. Coolest Cooler ran the second-best Kickstarter campaign ever. After a $13 million campaign, its creators wound up needing to raise another $15 million just to keep their operation going. And then there’s Pebble, the company behind three of the five most successful Kickstarter campaigns ever. It wound up selling off parts of itself to FitBit and discontinuing support for its products after raising roughly $43.5 million from three massive campaigns.
You won’t know exactly what your costs will be before you’ve started assembling a plan for production, but there’s a wealth of information online that can get you started with some ballpark numbers. If you want to make a cool attachment for iPhones, try to figure out what similar iPhone accessories cost. If you’re creating a board game, you’ll have to get a handle on the costs to produce a board, any unique pieces, and all the printed materials that’ll be included with your game -- among other things. Crunching the numbers on your idea will go a long way towards keeping your campaign in the black if you raise everything you need.
Now you’ve got your promotional story, you’ve started assembling your team, you’re at least beginning to brainstorm your marketing plan, and you’ve crunched some numbers to make sure you can price your campaign right. You’re a little closer to crowdfunding success, but there’s still a long way to go.
Stay tuned for the next installment of our series, where we’ll dive deeper into the marketing plan you’ll need to put together to generate interest in your campaign.