Crowdfunding Do's and Don'ts
As with any business venture, there are a lot of moves critical to your success, plus ones that can easily torpedo a solid idea. Here are some of crowdfunding's major do's and don'ts, gleaned from innumerable campaigns.
- Set your launch date several months out. During this time, garner support for your project, reach out to journalists and build a presence on social media. If you launch without doing so, there will be no immediate buzz about your project, and you'll never have enough time to create one before your campaign ends.
- Factor shipping costs into your planned rewards. Many people running reward-based campaigns are shocked by the postal fees when it comes time to send out their promised rewards to supporters. HSW writer and podcaster Christian Sager, who has three successful Kickstarter campaigns for comics under his belt, says he knows of campaigns completed years ago that still have never sent out their rewards because they underestimated shipping costs. Those donors are certainly not likely to support another campaign from you, or possibly anyone else.
- Keep your campaign short. Thirty days or less is ideal [source: Berkeley Sourcing Group].
- Keep your supporters updated. Tell them if you've started writing that novel, tested your prototype or scheduled Fido's surgery. If you update every few days, you're statistically likely to raise 100 percent more money than campaigns that don't [source: Lee].
- Time your campaign to finish near the end of the month. Many people have paychecks coming in then, says Sager. If you've got money in your pocket, you're more comfortable investing.
- Think crowdfunding is as simple as slapping a video online. Sager estimates he spent nearly 40 hours per week during each of his three campaign runs, mostly on promotion and marketing, and communicating with donors and potential donors. If the funds aren't coming in at the rate you need to succeed you may have to think of new strategies or videos on the fly.
- Freak out if it looks like you won't reach your goal. Typically the bulk of your funds roll in during the first and last week of your campaign [source: Kuo].
- Think you can't go back to the well. Lots of people crowdfund successfully numerous times over. According to Kickstarter, those who ran one successful campaign and tried a second have an impressive 73 percent success rate. By the time someone has four successful campaigns under his belt, his chance for meeting his goal on a fifth project is 91 percent [source: Gallagher and Salfen].
- Relax if you hit your goal. You've got to send out your supporters' rewards, if you've run a reward-based campaign, thank everyone and complete your project.
Author's Note: How Crowdfunding Works
I haven't tried crowdfunding yet. But my brother suggested we start a campaign to pay for pricey therapy that could help our daughter, whose knee was ruined from a pain pump that should never have been used on it. (Suing is not an option; the pump manufacturer went out of business from previous lawsuits, and the statute of limitations ran out on going after the surgeon.) We'll see!
More Great Links
- Alkon, Cheryl. "'Crowdfunding' sites pay medical bills, raise hopes." USA Today. Jan. 18, 2013. (Aug. 1, 2015) http://www.usatoday.com/story/news/nation/2013/01/11/crowdfunding-medical-expenses-fundraising/1786039/
- Andrus, Aubre. "The truth about crowdfunding: 5 debunked misconceptions." Mashable. April 22, 2015. (July 29, 2015) http://mashable.com/2015/04/22/crowdfunding-misconceptions/
- ArtistShare. "About Us." (Aug. 1, 2015) https://www.artistshare.com/v4/About
- Barbara, Hellen. "6 Potato Salad-Tested Crowdfunding Tricks That Work." Entrepreneur. Dec. 29, 2014. (July 30, 2015) http://www.entrepreneur.com/article/241262
- Barnett, Chance. "Top 10 Crowdfunding Sites For Fundraising." Forbes. May 8, 2013. (July 29, 2015) http://www.forbes.com/sites/chancebarnett/2013/05/08/top-10-crowdfunding-sites-for-fundraising/
- Berkeley Sourcing Group. "FAQ: 10 Things You Should Know For Your Crowdfunding Campaign." (Aug. 2, 2015) http://www.berkeleysg.com/crowdfunding/faq-10-things-you-should-know-for-your-crowdfunding-campaign/
- Bug-A-Salt. "Bug-A-Salt 2.0." (Aug. 1, 2015) http://bugasalt.com/
- Clark, Bill. "The History & Evolution of Crowdfunding." Mashable. Sept. 15, 2011. (Aug. 1, 2015) http://mashable.com/2011/09/15/crowdfunding-history/
- CrowdfundingBlog. "How Crowdfunding Sites Make Money." (Aug. 2, 2015) http://www.crowdfundingblog.com/blog/how-crowdfunding-sites-make-money/
- Crowdsourcing. "2015CF: The Crowdfunding Industry Report." (July 30, 2015) http://www.crowdsourcing.org/editorial/global-crowdfunding-market-to-reach-344b-in-2015-predicts-massolutions-2015cf-industry-report/45376
- Desta, Yohana. "GoFundMe stops donation campaign for Baltimore cops charged in Freddie Gray's death." Mashable. May 2, 2015. (July 29, 2015) http://mashable.com/2015/05/02/gofundme-baltimore-cops-freddie-gray/
- Freedman, David and Matthew Nutting. "A Brief History of Crowdfunding." Freedman-Chicago. June 22, 2015. (July 29, 2015) http://www.freedman-chicago.com/ec4i/History-of-Crowdfunding.pdf
- Fundable. "The History of Crowdfunding." (July 29, 2015) https://www.fundable.com/crowdfunding101/history-of-crowdfunding
- Gallagher, David and Jeremy Salfen. "By the Numbers: When Creators Return to Kickstarter." Kickstarter. March 24, 2015. (Aug. 2, 2015) https://www.kickstarter.com/blog/by-the-numbers-when-creators-return-to-kickstarter
- Grant, Kelli. "Crazy Crowdfunding: Bug Gun, Squirrels and More." CNBC. June 19, 2013. (July 29, 2015) http://www.cnbc.com/2013/06/19/Crazy-Crowdfunding:-Bug-Gun,-Squirrels-and-More.html
- Hern, Alex. "Why brands like Pebble keep coming back to Kickstarter." The Guardian. March 24, 2015. (July 29, 2015) http://www.theguardian.com/technology/2015/mar/24/kickstarter-why-brands-like-pebble-smartwatch-come-back-for-more
- IndieGoGo. "BugASalt - The Final Push." (Aug. 1, 2015) https://www.indiegogo.com/projects/bugasalt-the-final-push--3#/story
- IndieGoGo. "Suits for Wall Street." (Aug. 1, 2015) https://www.indiegogo.com/projects/suits-for-wall-street#/story
- Kickstarter. "Potato Salad." (July 30, 2015) https://www.kickstarter.com/projects/zackdangerbrown/potato-salad/description
- Kickstarter. "Stats." Aug. 2, 2015. (Aug. 2, 2015) https://www.kickstarter.com/help/stats
- Kuo, Emily. "The Dos and Don'ts of Crowdfunding: A Recap of the Crowdfunding Panel at Internet Week NY." Crowdfund Insider. May 29, 2013. (July 29, 2015) http://www.crowdfundinsider.com/2013/05/16295-the-dos-and-donts-of-crowdfunding-a-recap-of-the-crowdfunding-panel-at-internet-week-ny/
- Lee, Ellen. "The Do's and Don'ts of a Successful Crowdfunding Campaign." Intuit QuickBooks. Oct. 1, 2012. (July 29, 2015) http://quickbooks.intuit.com/r/crowdfunding/the-dos-and-donts-of-a-successful-crowdfunding-campaign/
- Null, Christopher. "6 Kickstarter nightmares, and how to prevent them." PC World. Nov. 5, 2012. (Aug. 2, 2015) http://www.pcworld.com/article/2013400/6-kickstarter-nightmares-and-how-to-prevent-them.html
- Salinas, David. "Is Kickstarter Right for Your Business?" Entrepreneur. March 31, 2015. (Aug. 1, 2015) http://www.entrepreneur.com/article/244487
- Sager, Christian. Email exchange. Aug. 1, 2015. (Aug. 2, 2015)
- Zipkin, Nina. "The 10 Most Funded Kickstarter Campaigns Ever." Entrepreneur. March 30, 2015. (Aug. 2, 2015) http://www.entrepreneur.com/article/235313