After working for months to years on your great idea, it’s time to bring it to market. But where is that money for manufacturing and sales support going to come from? With the advent of crowdfunding, entrepreneurs have more access to capital than ever before, but there is a lot more to crowdfunding than just making a great video and page.
Here’s what I learned from four successful campaigns and raising over $2 million in crowdfunding:
1. Have a real prototype. This is a must for launching your crowdfunding campaign, and I don’t mean just a piece of plastic that your end product will look like. I mean you should have a functional prototype to prove the technical feasibility to your backers and yourself. As press and the public become more savvy to vaporware crowdfunders, it’s essential to show that you have the goods.
2. Don’t blow your budget on the video. Many campaigns spend a lot of money on the video, but this is not necessary. It’s much more important to focus on having a clear and compelling pitch on the video rather than focus on make the video seem “cool.”
3. Focus on distribution. Focus on how people are going to find out about your campaign. It’s a good practice to map out exactly how the first 100 backers are going to find out about your campaign; then map out how the next 1,000 backers will find out about your campaign. It’s important to understand what key assumptions your team is making about the crowdfunding campaign.
4. Make sure the price is right. Don’t just randomly price your perks; make sure you are pricing to consumer demand and that your prices will maximize the revenue for each backer.
5. Add upsells. Finding new backers is hard during a campaign, but selling more to your existing backers is a much better path to success and enables your backers to invest even more in your project, which will make them even more likely to tell their friends.
6. Update me! Plan out daily updates during your campaign — and plan out plenty of content in advance. Backers want to hear from you and be involved in the process.
7. Customer Q&A. Expect a lot of inbound comments and questions during your campaign. Make sure that you put into place a basic email ticket system like Zendesk so that you can handle every customer question that comes your way. Your responsiveness to their questions will pay off.
8. Give people a deal. One great way to make sure people talk about your campaign is to give out a deal. People love to talk about great products they just got an exclusive deal on. Give your backers a deal they can tell their friends about.
9. Referrals are key. Every campaign should have a strong referral program where you reward your backers who invite their friends to the campaign with free perk upgrades, free product, and more.
10. Set the target right. Success brings more success. Set a target goal that you can hit within the first 24 hours. This gives the campaign a feeling of success and will help sustain momentum throughout the crowdfunding campaign.
Chris Herbert is CEO of TrackR.