Crowd Funding, be it Kickstarter or Indiegogo, or any other form of independent publishing, has become a way for small start ups to get their product out there. Some projects are good, others are bad, some make their targets and others don't, but there is no denying that Kickstarters have become a way to circumvent some of the barriers that have been placed in the way of independent growth in the past. So this week we’re going to have a guest post from the lovely guys over at Albino Dragon on the benefits and pitfalls of running a successful campaign, take it away Erik.
After having raised over $350,000 on Kickstarter (with a project that is still open), I get a lot of questions about what it takes to make one successful. Here are the top twelve things that we've learned along the way.
1. Kickstarter is a community - Don't just launch a project without becoming a part of it first. Back other projects and see what you do and don't like about what they are doing. What rewards excite you and what makes you want to open your own wallet? If others are doing something similar, reach out to them, maybe there is a chance for some cross promotion so that you can help each other. And most importantly, solicit your own backers for feedback. Many of them have an idea of what they expect your final product to be so take the time to bring them into the design process if at all possible.
2. Know your numbers - You should know what everything is going to cost as best you can before launching. This includes production, shipping (including supplies, fulfillment, etc), at what price point your margins go up and you start to enjoy economies of scale, and advertising. Don't just guess, because if you're wrong and you just barely hit your target, you're going to have to make up the difference out of your own pocket. Don't forget those Kickstarter and Amazon fees either.
3. Shipping - I hit on this a lot and for good reason. This can sometimes be more costly than the production itself. Know your shipping costs. If you run a successful project, especially one with a lot of international backers, it could end up costing you a lot of money in the long run. Make sure you know what size package you need to ship each reward, how much it will weigh, and what carriers you will need to ship (some countries you have to use a specific carrier).
4. Advertise - Make sure you do this BEFORE you launch your project. People should be anticipating the launch so that they are ready to open their wallets when you begin, not finding out about it halfway through the project. You don't want to wait until you get to the mid-project slump before you start getting the word out. Talk to bloggers, reviewers, post in forums, anywhere anyone will listen before you launch your project. Keep running ads on appropriate sites to keep getting eyes on your project. We really like Kicktraq.com because every user on there is looking for a Kickstarter project to give their money to.
5. Quality - If we were a big corporation with a mission statement this would be in there somewhere. You may run one project and trick your backers into pledging for a substandard product and save yourself a few dollars, but you'll never see them as a backer again. We always spend a little more on quality products so our backers feel they got their money's worth.
6. Goal - Put it too high and it will seem unattainable. Too low, and once you fund, there isn't an incentive for anyone new to come on board. Make sure to have some stretch goals built in there to keep giving your backers a reason to get the word out and stay engaged with your project.
7. Stretch goals - I generally hate these. Put them in too early, and you just end up lowering your margins for no good reason. The point of the stretch goal is to get backers excited about the project so that they'll push hard to get something extra. Too often I see where I'm asked to basically just give something away for free just because we've already funded. If you can find ways to add value without cost, then you want to do this as much as possible, but be wary of adding anything without thinking it through completely. Remember that if you have to send something extra, there are fees and additional shipping eating into that.
8. Transparency - Or what most people call it, being honest. If you make a mistake, admit it. If you don't know, say you don't know and go find out. People can tell if you are genuine and as soon as they find out that you aren't, they will turn on you. We have always been open about our costs, how we do things, and why. It's gone a long way to strengthening that trust with our backers and many times it's led to suggestions that have helped us improve our processes.
9. Trademarks - Make sure that you've researched any chance that you might be sued for the name or product that you are putting out there. Most small projects will never have to worry about this, but if you happen to become a big success, it will make you a target for anyone that thinks they can get some extra money out of you. Even if you think you're in the clear after some searches, it pays to have a good exit strategy if things get heated (changing the project name, etc).
10. Passion - This should probably be much higher on the list because it's so important. Pick a project that you are passionate about! If you're not, how can you expect anyone else to be? If you are excited about what you are doing, you'll be able to get other people excited as well.
11. Experts - Every once in awhile I come across a guy that thinks he has all of the answers on how to run a Kickstarter project. More often than not this guy has either never run his own project, or hasn't made much money beyond friends and family. Even now, I would not consider myself an expert by any means as the landscape is constantly changing. So if someone volunteers to take your time and/or money using this moniker, I'd run the other way.
12. Success - Once you're successful, everyone wants to talk to you. I'm flooded every day with questions from project creators wanting to know why their project isn't doing well. Most I answer, but most of the time their campaign is failing for two reasons: it's either boring and/or they haven't put much work into it. It's pretty obvious who has done their homework and who hasn't. I don't have a secret formula. Actually I do, but most people don't want to hear it. It takes hard work, time, and a little bit of luck. If you're not willing to submit to these three, chances are you're going to fail.
There are probably a lot of other pieces of advice that I could give, but these are the biggest and most important from what we've seen across seven projects so far. I hope that you find this helpful and that you'll contact me someday if it's helped your project in any way.
by Erik Dahlman, Albino Dragon