Have you heard the news?
Crowdfunding is sweeping the entrepreneurial landscape, empowering creators to bring product ideas to life by sourcing funds from a community of backers.
And the undisputed leader in the crowdfunding space is a platform called Kickstarter. In this article, we’re giving you a step-by-step guide for raising money on the site so that you can capitalize on the huge opportunity it presents for your start-up.
Let’s dive right in!
Step 1: Solidify Your Project Idea
No matter how great the idea is, it has no value until you can transform it into a physical product that other people can use. Kickstarter only allows you to raise money for projects that have a definitive goal that will result in an end product.
These projects must also fit into one of their categories: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater.
In addition, your campaign cannot raise money for the following: causes (red cross, bills, etc.); websites including e-commerce, business or social networking sites; bath, beauty, and cosmetic products; electronic surveillance equipment; eyewear (sunglasses, prescription glasses, and others); firearms, weapons, knives, weapon accessories, and replicas of weapons; medical, health, safety, and personal care products; or infomercial-type products. Projects cannot offer financial, medical, or health advice.
These guidelines will help you narrow in on your crowdfunding project idea. It might be the case that Kickstarter is not the best crowdfunding platform for you. Check out some other platforms related to gaming, music, and non-profits.
And if you’re looking for additional guidance during the prototyping phase, make sure to check out this video.
Step 2: Begin Planning Your Campaign
Before you begin, you should know that running a crowdfunding campaign can be a full-time job in terms of social media promotion, going to networking events, contacting bloggers, answering questions/comments, and reaching out to friends and family.
You should begin by identifying your target customer base and beginning to brainstorm the kind of information they would want to know about your product. Take a look at other successful and not-successful Kickstarter campaigns in your project category and get a feel for how they word their call-to-action, structure their rewards, and format their all-important pitch video.
Ask yourself: what kinds of questions were asked on these Kickstarter campaigns? What rewards did really well and what reward tiers didn’t see as much traction? Did the project owners do any interviews where you could learn about their marketing strategy?
Every week, I talk with creators who have pulled off wildly successful campaign on my podcast: Crowdfunding Demystified. Make sure to use that in your research process!
Step 3: Create Marketing Materials and A Marketing Strategy For Friends and Family
Your friends and family are going to be the first contributors and evangelists for your latest life endeavor. Segment your personal network into:
- Close friends/family,
- People you are friends with but are not in constant contact with
- People you are friendly with
- Acquaintances
Draft specific message (Facebook/email/LinkedIn) for each group that you will use to reach out to every individual, depending on which segment they fall into. Be sure that when you send these messages in the future, you will follow up with each message (especially friends/family) with a text message or call to thank them or remind them about your campaign.
Now that you have identified a base of early supporters, you need to begin to create reward tiers that will allow them to show their support.
Step 4: Reward Tiers for Early Adopters
Keep in mind that although you think your product is innovative and awesome, most people in your close network may not be the ideal customer, but will be more than willing to support you in your latest endeavor.
As can be expected, close friends/family may be willing to pledge the amount of money to receive your actual product. Friends outside of this segment are a little bit more tricky.
You should structure your reward tiers so that that even these individuals can contribute to your campaign, even if it is only a $5 pledge, and at least receive a personal thank you. At the very least, for people who are not willing to contribute, you should ask them to tweet or share your project from the buttons below your video, as this can configure into the Kickstarter algorithm that ranks popular projects.
Most people also have one or two individuals in their life that would be willing to go above and beyond for your campaign. These are the “life savers.” I would recommend you save asking for their pledge until towards the end of your campaign after you have exhausted the rest of your social network and marketing efforts.
Step 5: Reward Tiers for Potential Customers
Now it gets exciting! You are crafting the rewards for people that you may not know and that may find your site through social media or through your pre-launch phase. (This is an extremely important step — one that can make or break the success of your campaign).
These people may be genuinely interested in your story or your product. Please keep in mind the following Kickstarter guidelines when designing your incentive system: Projects cannot resell items or offer rewards not produced by the project or its creator, creators cannot promise to donate a portion of funds raised or future revenue to a cause, projects cannot offer rewards in bulk quantities (more than 10). No contests, raffles, coupons, or lifetime memberships.
Since rewards are so unique depending on your project’s category, I would recommend studying other campaigns and getting creative!
Remember, most pledgers want a say in the creative process or some type of tangible reward. For creative campaigns, for example, offering to have a character named after them or for their name to be written into a song could be a great way to involve them in the creative process.
Step 6: Tally Up The Costs
It’s all fun and games until numbers get involved, right? You’re flying along, excited about the project, and now we gotta roll out the spreadsheets. Please remember that attention to detail NOW, coupled with a sense of realism, will pay dividends in the future.
The worst thing in the world is to successfully raise money on Kickstarter and end up actually having to pay out of pocket to cover costs because you didn’t budget appropriately.
I’ve seen it happen! It’s not a position that anyone wants to be in, and it seriously deters your passion for seeing the project through to completion.
Give every single cent of of your fundraising goal a name and destination. I would even recommend building in a 5% buffer in addition to any profits that you are hoping to secure. Every single reward and order fulfillment will have economic and time costs. Be extremely clear about what it will take to fill the promises you are making, especially if you should end up raising MORE than your fundraising goal.
What is your cost of goods? The video? Marketing? If you ended up raising 200% of your fundraising goal (don’t we all hope that will happen), would you still be able to fill these orders? Preparation goes a long way!
Step 7: Develop A Marketing Strategy
No matter how great your idea or product is, without marketing, it is nothing. Let’s be honest, the greatest idea does not always win. The best marketed idea ALWAYS wins.
Unfortunately, developing a marketing strategy is beyond the scope of this article, but don’t worry, we’ve got some great resources for you:
How to Market a Crowdfunding Campaign
The Ultimate Crowdfunding Marketing Strategy
Incredibly Effective 3-Part Kickstarter Marketing Strategy
Conclusions
I hope that this article was helpful for you as you navigate the waters as to what it’s gonna take to launch your crowdfunding campaign.
First and foremost, you gotta do your research. Check out these awesome resources we have for you:
- Subscribe to the CrowdCrux email newsletter for weekly insights directly to your inbox.
- Visit our Youtube Channel for all the best insider tips, tricks, and secrets.
- Check out the Crowdfunding Demystified Podcast and this book for interviews with wildly successful creators who have run six-figure campaigns.
- The Kickstarter Launch Formula book and/or course that gives A to Z processes for launching your campaign.
Looking for personalized support?
Book a coaching call with me! Working with a crowdfunding marketing agency vastly increases your chances success, and our experienced team is ready to go to work on your campaign!
Good luck with your project. CrowdCrux is here to help, should you need us.
