Wendell Berry once wrote of “modern salesmanship and modern technology” that it was “yet another way to make people pay dearly for what they already have”. Crowdfunding seems to be an example of technology finally giving something to the little guy that he never had access to before in terms of venture capitol and investment.
The concept of online crowdfunding popularly landed on the scene around 2008, with Indiegogo and Kickstarter quickly taking the reigns as the top two most popular of such sites (there is also Crowdfunder, Razoo, MedStartr, Smallknot, Rockethub, Gambitious and GigFunder but we will not focus on these just yet), and they have now become an accepted venue for artists in search of funding to complete their art without having to compromise.
With the recent JOBS Act signed by President Obama, these crowdfunding websites will now be able to offer investors equity in exchange for contributions in addition to the more general “perks” we’ve become familiar with, giving these sites even more value and relevance going forward. So, if you’re considering starting a crowdfunding campaign to raise money for a charity, or for a new short film, or a fun way to exterminate flies, you should carefully consider which platform to use and how best to leverage it for your exposure, though in the end, it’s the good ideas that are well presented that take off. So first and foremost: have a good idea.
Setting Your Goal:
It’s easy to get carried away and ask for too much money, because “while I’m asking, I may as well get THIS much”, but the truth is that a lower goal generally makes the campaign seem more inevitable, since we don’t like to back a loser. The psychology can be much different between asking someone whether they’ll help you reach your goal that is so far 10% funded, and asking someone to help you after you’ve been 90% funded already.
A recent example of the inevitability effect is the app.net crowdfunder (was run privately, without a Kickstarter or Indiegogo page), which looked as though it would fail until Daring Fireball and a few other influential bloggers began spreading the word. As soon as they did, the funding snowballed and everyone jumped on the bandwagon, donating $50 for a one-year membership and dibs on their handle, including yours truly.
One strategy we have tried and suggest is to raise 20-30% of your goal the first few days after launching through family and friends, then going out and doing any PR, social networking, blogging, and radio you can manage after you have at least that first 30%. The key is that once you ask people for money, they’re going to see how successful it already is, and on the internet a campaign never goes away – whether its successful or not a static page will exist there forever once you decide to start a campaign, so be smart and don’t just blast your social media pages about it everyday after you launch. Try to make a plan. Generally, our advice for how to be successful in social media marketing is something like this.
Don’t try to make the new Facebook or PS3 unless you can actually do it. There have been a number of successful campaigns for new products that got dragged down by manufacturing delays and bad book-keeping or luck, leaving the funders little to no recourse (raising the question of whether funders are entitled to refunds or have just given “donations” to help someone reach for their dreams; seems to be the latter so far). Even if your goals are not product-related, keep it to something within your capabilities.
Indiegogo versus Kickstarter:
Kickstarter made a bigger impression when they landed on the scene, but despite the name being a verb (and a good one) I prefer Indiegogo for the following reasons:
- Indiegogo will give you help and suggestions if you reach out to them and ask for it. Kickstarter’s process is much more sterile, requiring you to submit your page as an application, then they decide whether to allow your project or not. You cannot fund something open ended with Kickstarter, such as kickstarting a business or non-profit, in fact there is no cause or charity funding allowed. And, the process doesn’t include speaking to a real person.
- Indiegogo allows for flexible funding, meaning that if your project is not successful you still get to keep what you’ve raised. Indiegogo takes 4% on fixed campaigns and 9% on flexible. Kickstarter takes a flat 5%. Also, if you are running a flexible campaign on Indiegogo you can immediately receive funds sent via Paypal. Another reason it seems to favor the indie musician or film-maker who needs the money right then to keep creating. Kickstarter holds the funds until the end when it disburses them (if you reach your goal).
- Indiegogo has a pretty much “anything goes” approach, which equally has its controversies, but like YouTube, allowing anything to be submitted levels the playing field while still allowing the cream to rise to the top (and still has need for moderating). Furthermore, like YouTube, Indiegogo has an algorithm that makes the most “active” (views, comments, perks claimed, number of shares, etc) campaigns be featured on their homepage. Kickstarter hand-chooses their favorites and features them on their homepage. I prefer the logic of algorithms.
Writing Your Campaign:
The most crucial step is writing out the description of your story, why you are passionate about this project, and why people should help you reach your goal. Making a video around 2-3 minutes long that can put a face on the campaign is also key. You have to create or tell a compelling story in those 3 minutes. Tell us why you are passionate about what you’re doing. People are donating to you, not your project (the idea may be what inspires them, but you are the one they’re trusting to pull it off with their cash).
You need to be transparent, humble, and approachable. On your perks, don’t shoot for the stars. People realize you’re doing this to raise money, so the perks should be reasonable and as creative as you can make them. You can make donating worth someone’s while without promising to fly out to them and write five songs about their dog for $500. Make the perks something you can actually deliver on.
If you need more advice, there are articles and books written by successful crowdfunders, such as It Will Be Exhilarating, which you should definitely check out. Do as much research as you can, and if you need more help feel free to reach out to Corduroy Branding’s social media department at firstname.lastname@example.org