In September 2016 after a particularly tricky time, Dominique and I were sitting in the Virgin Lounge in Edinburgh considering the next steps for our company, Wunderlife
Two years earlier we had come together as complete strangers, with just a spark of an idea and a passion to start our own business. What followed had been lots of fun and even more hard work, but we had hit a wall.
We needed to generate more buzz about our product, the Brug, make improvements to the design and secure the funds to manufacture it. When our friend Will Ford of Arcido suggested crowdfunding, we only knew a little bit about it, but being out of our comfort zone was the new normal. We’ll figure it out, we thought. How hard can it be?!
Nearly five and half months later, on 28 February 2017 we finally launched our crowdfunding campaign for Brug v2.0 on Kickstarter. ‘Launch’ sounds like a beginning but we felt we were crossing the finishing line in a marathon!
Almost a year on from that day when we started to think crowdfunding might be the answer, it feels good to reflect on some of the things we learned.
Don’t even think about embarking on a crowdfunding project of your own until you’ve spoken to at least three or four people who have done it before you. The internet is awash with crowdfunding information and advice. But, relying completely on Google is likely to lead to overload, confusion and will quite possibly put you off before you get started! Entrepreneurs are generally a friendly bunch and happy to help each other out so use your networks to find someone who can give you the low down on their own experience. A big shout out here for Will and Sorcha O’Connor who generously shared the ups and downs of their own crowdfunding projects for Arcido and Sealblades over a few cups of coffee and several emails!
There are two main types of crowdfunding. Research them both and decide early on which one is right for your business.
With equity-based crowdfunding you are offering your ‘crowd’ a chance to invest small amounts of money in exchange for shares in your business. With rewards-based crowdfunding your ‘backers’ are pre-ordering a product that hasn’t yet been made. This is the approach we took. You showcase your idea, and if people like it they ‘back’ the project in exchange for being the first to own the product, hot off the production line. It’s an excellent way to fund your manufacturing but also a way to test your idea and gain all important ‘market validation’.
Excuse the truism but I can’t emphasise this enough. You will hear of people planning and launching their crowdfunding campaign in a month or less. I’d recommend starting a minimum of three months before your launch date. You need to be thinking about your budgets, costs and financial targets, and deciding what rewards you will offer. If you have a product, how and where you will get it made? Then you need samples for bloggers and journalists and all the creative assets (a film, photography, drawings and copy) to sell your project off the page.
Probably the most underestimated element of crowdfunding that you must plan for is building your crowd. As Sorcha writes in her blog; 7 things I wish I knew before we did our Kickstarter campaign, “If you build it they won’t come”. It’s not enough to simply launch a campaign and expect the pledges to roll in. There are hundreds of new projects launching on Kickstarter alone every week. Some never raise more than a few pounds but the most successful reach 30-100% of their target in the first 48 hours. There are two lessons here:
First, set your target low, enough to cover your basic costs, and aim to finish the project overfunded.
Secondly, have at least 30% of your target lined up to be pledged as soon as your project launches. If people see your project succeeding they are more likely to support it and the crowdfunding platform is more likely to show it to other potential backers.
Now is not the time to be shy! We had dabbled with social media before starting our Kickstarter, but were by no means experts. Elle Tucker and Eve Laird at Rude Communications were brilliant at helping us to design and deliver a highly targeted social media campaign leading up to our launch, and while the campaign was running.
We learned that if, like the Brug, your product has potentially broad appeal, then planning your content around themes and using different hashtags is a brilliant way to see which of these markets are most likely to ‘bite’. It won’t necessarily lead to more pledges, but it all helps to build your ‘social proof’ and test which of your messages get the best response. This in turn can be used to inform your future marketing activity.
They will always be your biggest supporters and with crowdfunding it’s no different. Get comfortable with asking friends and family to back you and share your campaign. This is a great way to bolster your confidence and get your campaign off to a flying start, which in turn helps to bring other backers to your campaign.
After friends and family your best prospects are people who habitually back crowdfunding campaigns. Get to know them! What websites and blogs do they read, who do they follow? Look for similar projects to your own and learn from how and where they promoted their campaign. If you’re running a rewards-based project, think seriously about offering worldwide shipping to reach as big an audience as possible (the vast majority of Kickstarter supporters are US based) and work hard to keep shipping costs reasonable.
Running a crowdfunding campaign can be emotionally, mentally and physically draining. There will be days when you are high as a kite only to come crashing down with stress or exhaustion. Plan for how you’ll handle this. Talk to your family and friends, line up a weekend away (even if it’s once your campaign has ended), fill your fridge, book a massage or schedule regular fresh air and exercise. This could be a great time to take up meditation or yoga!
Crowdfunding is not an easy option but good research and preparation is more than half the battle. There are no guarantees but if you get this part right your campaign might just set your business on the path to real success.