In light of the failures — or half-failures — of some recent high-profile crowdfunding campaigns, we recently took a look at how backers can assess risk to avoid getting screwed over on Kickstarter.
The natural follow-up question:
What was different about the success stories?
To find out, we tabbed five of the most successful campaigners in crowdfunding’s (admittedly brief) history to figure out how you, too, can make your million-dollar idea a reality.
The world’s got problems. Solve ‘em.
Adam Sager, founder of Canary security systems, raised $1.9m on Indiegogo. His advice: “Your responsibility is to produce a solution to a problem” and “you need to be able to tell people right away how the product is going to solve a real problem that they have.”
Be in the moment
Your concept should also vibe with the zeitgeist. “If your idea is too far ahead of its time, you’ll have to spend resources telling people why they need it,” advises John Van Den Nieuwenhuizen, creator of the Hidden Radio, a wireless portable speaker that raised more than $500,000 on Kickstarter.
No homework, mo' problems
Continually research competitors and the market and refine methods. Phil Bosua, who raised $1.3 million on Kickstarter to launch the Lifx LED smart bulb says, “Every hour of planning you do before the campaign saves you 100 hours of work after it.”
And says Van Den Nieuwenhuizen: “Once my partner and I had a design we liked, we submitted it to some design blogs. The response was very positive, with people asking how they could buy it, and all we had at that point was a rendering. We made our first prototype with a trip to the hardware store. It took us a year of looking in the U.S. and Asia to find the right manufacturer. But by the time we launched on Kickstarter, we were literally ready to begin production if we got the funds.”
Relying solely on crowdfunding platforms for capital is a foolish move. Marc Barros, serial entrepreneur and creator of the Moment smartphone lens campaign, generated more than $100,000 in just its first 28 hours on Kickstarter, but he came loaded. “We spent about $80,000 to get to the Kickstarter stage, with prototypes, samples, and additional engineering support to help solve our problems,” he notes. In terms of mass market dreams, Barros cautions, “You should think about needing $500,000 to get from the idea stage to shipping a final product. Whether you raise that from your backers, investors or supply partners, that’s about how much you need to make and ship.”
It’s all about appearances. Take pains “to make your team visible,” says Canary’s Sager. Don’t just tell the story of the product — tell the story of the people behind it as well. “Let potential backers know who you are. Trust is a big part of crowdfunding.”
Community is priceless
Acquire feedback from your friends and backers with surveys, and always leverage positive momentum from press. Using social media and email-marketing is a no-brainer. “We prepared 100 personal emails each to send out when we launched the campaign,” says Airtame’s Jonas Gyalokay, who managed the highest-ever-funded European Indiegogo campaign. “We made sure each one was personal and had a good dose of humility, while stating how important this project was to us and our lives. And of course we ended with a strong call to action.”