We crowdfunded our hardware startup. It was an amazing and exhausting experience. We did our homework before launching the campaign and did most things right. You want the list? OK, here’s what we knew we had to do before the launch:
- Cool but authentic video
- Working prototype
- Communicate our mission and passion
- Create cool reward categories
- Get the message out on social media
We also knew going in that there would be a ton of engagement with backers after we launched. Also, that this is actually the prime benefit of crowdfunding since you get direct, unfiltered feedback from people who actually want your product and are rooting for you to succeed. Exhausting, but awesome.
There are a number of things we didn’t know and didn’t find in any crowdfunding articles or blog posts. Maybe they exist, but we didn’t find them. Or, perhaps, we didn’t know to look for them. Anyway, if you’re considering launching a crowdfunding campaign, you might want to consider the following:
Who Who You Know Knows
We’ve all heard it, you know it’s true, but it’s not the whole story. But every time you want to break into something new you’ll be told that it’s not about what you know, it’s about who you know. If you don’t have any contacts you don’t stand a chance. But that’s not the whole story.
Yes, people who have an established network have a distinct advantage. Do you have thousands of likes on your Facebook page? Tens of thousands of Twitter followers? A massive number of e-mail opt-ins on your list? Well then, you have a mighty network that you can tap into when you’re ready to launch!
What if you don’t have a network? How long does it take to build a large following? How much does it cost to find a shortcut?
Well, you do know some folks. They know other folks. And so on, and so on. Even if you don’t have a massive network you might know some people who have a decent sized network. They might know people with larger networks, and so on, and so on. That’s kind of how networking, you know, works.
You, too, can go out and get to know people. IRL or online. Even if you don’t have anything you’re looking to get funded, there’s no reason to not start building your network now. Like right now. Exchange name cards, e-mail addresses, and twitter handles with somebody now. Comment on something online. Get involved. Be real.
The key – which would have helped us lots – is understanding it’s not just who we knew. But it was the people that the people we knew knew that pushed us over the top. Get that?
Don’t sell yourself short because you don’t think you have a network. Build one starting with the people you know. It’s who who you know knows that will help you grow.
How to Shoot An Awesome Video
The crowdfunding videos these days are giving Hollywood a run for their money. Steadicam video, boom mic, professional actors, cool background music, and even 3D animation. If you had the money for that kind of production you wouldn’t need to crowd fund your project. Amiright?
So now you’re faced with a conundrum. Do you blow your budget on the video in the hopes that a slick vid will attract backers, or do you keep your powder dry and put up the awful video you just shot and risk potential backers questioning your ability to deliver a quality product?
We all know the real answer is to do it yourself using every trick in the book to save money while creating the best quality video you can. If you are not a professional videographer then here are some things you need to look out for when shooting your project vid.
Flattening everything to 2D increases the prominence of everything in the background. If it looks bad in camera, it will look worse on screen. Play with the focus by putting it on the subject and blurring the rest. When scouting locations for your shoot make sure you take into consideration foot traffic, since everybody walking in the background will be in your video.
You need to determine the best time of day to shoot. You want the best light coming from the right direction. If you have to change angle due to the direction of the sun, for instance, then you might have the wrong background. This is true when shooting indoors, as well. While you might think the quality of light is good, it might still be too little for the video. Instead of trying to buy or rent lighting equipment, just be sure to seek out a well lit place for your shoot.
Unless you have a boom mic that can follow you around and record great sound everywhere, then you’re going to have to get creative. Background noise and chatter can ruin your take. If you can’t control sound where you want to shoot then consider doing a voiceover instead. Shoot the video and then add the voiceover in post production. Most home video software these days can handle that. All you need is a good USB mic, I recommend the Blue Snowball, and a room with lots of heavy curtains to stop the echo. You can also use blankets and towels to deaden the echo if your room is too ‘live’. It makes a huge difference, so if you have to record the voiceover holding a towel over your head then don’t be ashamed. Nobody will see you and I won’t tell them your secret.
Another differentiator between good and great videos is studio quality makeup, even on dudes. Take a look at the great videos and nobody has shiny foreheads. We had our shiny brows proudly displayed for all the backer-world to see. It wasn’t the end of the world. However, if you want to look better on camera, don’t want to spend a lot of money, and don’t have any makeup artist friends that can help you, then you need to get your MAC on. Use the MAC Blot Film to absorb oil. Great for on-set touch ups, as well. You can also use MAC Matte, which is a shine controlling creme. If you want to go all out you can use some foundation. But you’ll have to go to the makeup counter for that so you get the right shade. A quick google search on makeup secrets of the Hollywood Stars will turn up all kinds of cheap and effective tricks.
I already mentioned the Blue Snowball. You can use almost any HD camera these days to record video. Just be sure to have image stabilization. For not a whole lot of money you can get a Steadicam Smoothee mount or something similar. If you are doing a lot of panning shots this could be a good investment. Just realize you’ll need to spend some time learning how to use it before the shoot.
Bring plenty of batteries or have a way to recharge batteries with you. Have a tripod? Bring it.
You’ll want to see how the video looks on screen after each take. Bring a laptop so you can quickly review takes. What looks great on the camera preview screen could look terrible on your laptop. Also, what looks terrible on the preview screen could actually be great on the computer. It’s best to be sure, and laptops are pretty light these days.
Make sure to have a storyboard of your video laid out. If you don’t want a script at least have the major bullet points of each scene written down. If you’re going to have still shots and graphics between live action scenes put those in the story board. You’ll want to plan the transitions ahead of time. A little bit of up-front work mapping this all out will save a lot of time in post.
Most video editing software, even the free stuff, can do amazing things. You can create pan effects, enhance video, stabilize shots, and even touch up the audio. It’s not going to be perfect, but you can make some serious improvements. I used Keynote to create graphics for the transitions and voice over segments of our video. I also created some animations using Keynote by exporting the presentation as a .mov file, then importing it into iMovie. Pretty slick, don’t you think?
It would have been nice to have all this information in one place before we started filming. But you’re reading this so you do have this info in one place. No excuses! Get going already.
When you’re talking to somebody about your dream you can always find the words. It comes out naturally and passionately. But when you start to write you tense up. What comes out strikes you as spammy infomercial claptrap that you yourself wouldn’t back, so why would anybody else? Doubt creeps in. Now you’re whole enterprise is at risk because you can’t find the words.
Break out your voice recorder, aka smartphone. Start blabbing away like you would to anybody else you’d be pitching. Once you’ve unclogged the mental blockage write down the main bullet points of what you were babbling on about. This is your skeleton. Flesh it out by expanding on the points and you’re done. What you have now is passionate, authentic, and straight from the heart. That’s what people connect with. Not the informercial-speak that we’ve been so inundated with that it has infected our own writing.
Look at that, another excuse demolished. Now get to it!
Preparing the Launch
Should you advertise? Should you get a PR firm involved? Should you reach out to influencers?
Well, how much money do you have? You’re going to take a pretty big risk if you pay all that money out hiring pros and don’t get any results. Or worse, break even and then don’t have the cash to actually deliver. So, yeah, you’re going to have to roll your own and keep costs to a minimum.
Take a look at publicize.co, that’s .co not .com. For a mere fraction of the $10k/mo with 3 month minimum you’d get from a full service PR firm you get the tools you need to roll your own, plus the advice on how to use them.
After you learn the ropes, who should you contact? Look for press about similar products. See all those press links in other campaigns? Follow the links, find the name of the reviewer, and reach out to them. It’s not that big of a deal.
Now, there’s a reason that most PR firms demand a 3 month minimum. That’s because it usually take 3 months to start seeing results. That should be a pretty big hint for you on when you need to start working on PR. Did you guess 3 months before launch? Great. Now do it!
Advertising can work and it can backfire. Here’s a little secret that you might not be able to find anywhere else. It’s not uncommon for the advertising cost per sale to be the same – or more – than the cost of what you’re selling. All the gurus selling info products will teach you everything about Cost Per Click, Cost Per Conversion, and how to optimize your Call To Action. But if your margin is $20 and you're paying $20 per conversion then you’re losing money. Sure, you might only be paying a couple dimes for each click, but does that matter if you are losing money on each sale? Not one iota.
Be prepared to spend a lot more per conversion than you were expecting. Especially at first. You should set an amount up front that you’re willing to spend. If it’s less than $5k you probably should spend it on something other than ads.
You want to have a sizable enough initial ad test to determine what your cost per sale is and if that number is sustainable. If your advertising costs are within limits then go ahead and add more fuel to the fire. If it’s not working out, then you need to stop advertising. Seriously. Stop it.
Which ads work best? There’s Google, Facebook / Instagram, and Twitter.
Unless you have a minimum $10k to blow on ads you probably won’t be able to get some hotshot to manage your account. Like our PR friends, these folks also like to have a three month commitment so they have time to optimize the campaign. So that number is probably closer to $30k.
So, you’ll be rolling your own. The ad platform that works best really depends on the audience you’re trying to reach. You can use any of the online tools from Facebook, Google, or Twitter to define your audience and get an idea of how much it would cost to run a campaign. It’s also a great way to see what the potential size of your total market is, where they are, and what they like.
If you have the money then it’s worth testing each one. If you don’t then you’ll need to make your best guess and be ready to stop advertising if it doesn’t work. I’m not going to make any recommendations on this one, but if you guess Facebook and make ads with lots of great photos, then you may have guessed wisely.
Social Media Outreach
This is where we put to work the people you know and who 'who you know' knows. Talk to your network. Ask them directly if they know anybody you should talk to regarding the pending launch of your NewCo Widgets, or whatever it is you’re doing. You’re looking for press contacts, reviewers, influencers, YouTube stars, instagrammers, etc.. Not just folks with a following, but people who would actually really like what you’re working on. Then you can check out their reviews and see if they are a good fit for what you’re working on. Warm intros are the best, so if you can get an intro from somebody in your network you stand a better chance of connecting. Otherwise you’ve got to send a cold e-mail or cold call them. You need to do it, so best to prepare what you want to talk to them about. Have some talking points ready just in case.
While you’re reaching out, you’ll also want to start posting on your own social media accounts. Whatever you got, put it out there. Be active by engaging other people and companies on social media. You’ve got something to say, so say it there. Worried that people might not like what you have to say? Good! A little controversy is always a conversation starter.
When should you start? If you guessed that your Social Media efforts should start at the same time your PR efforts did then you are ahead of the game. It takes a good long while to build a following. If you haven’t started, start now!
We’ve just discussed that you need a three month head start on PR and Social Media before your launch. So when do you expect to launch? You want to make sure that the launch date, along with scheduled campaign time – average 30 days – doesn’t conflict with any major calendar events.
For hardware startups there’s an additional worry. You need to make sure that you can manufacture in time to deliver when promised. If you are trying to source a manufacturer just before the holiday season then you’re going to have a bad time, mmm-kay? You’ll spend way more than you thought, will deliver late, and you may be forced to make compromises in your design just to keep delivery dates within reason.
I bring up the calendar issue because many would-be crowd funders want to launch within 30 days or less. They have an immediate need for funding and don’t have three months to get everything set up for launch. They are at a cusp. If they don’t get their funding soon they’ll have to go back to their day jobs. So it’s launch now or the dream dies.
Sorry, but you need to make your own call on this.
We’ve all been told to follow our passion and the money will appear. Deep down we know there’s more to it than that. I’ve outlined much of that ‘more’ above. There’s a lot of homework involved and it takes longer than you think.
It’s entirely possible you could cobble together a campaign in a couple weeks and be wildly successful. That takes a lot of luck plus an established and active network. If you’ve got the fire in your belly and won’t take no for an answer then you’re going to do what you’re going to do.
If you take a step back and look at the big picture, then maybe you can improve your chances by looking at the calendar and picking your moment. Give yourself time. Do those things that everybody talks about but never gets around to doing. You may need to nominate an accountability partner to keep you on track. If you’re really starting with nothing then you need to take the time and do it right.
The Campaign Dominates Your Life
Once the campaign launches you will have little energy to actually get any work done on your actual project. You’ll be busy managing the campaign. You are now in constant promotion mode. Reaching out to everybody, thanking every backer, asking people to spread the message. If you had planned on actually building your product during this time then you can forget it. It’s all consuming. Especially emotionally. It’s intense. The good news is that this means you’re probably going to have a successful campaign.
This brings us to the question about length of campaign. Thirty days is about right. Running this marathon for more than a month is a big ask. Fatigue will set in, and then you are still managing the campaign when you really need to get going on your project. Ye be warned.
Post Campaign Project Management
Depending upon which crowdfunding platform you used you will have access to different tools. Some are full featured, others are pretty bare bones. If you’re a genius with spreadsheets then it shouldn’t matter which one you use. But if you’re not, then you may want to consider using a service like that offered by BackerKit. If you’ve backed projects before you may have received an e-mail from BackerKit after the campaign successfully ended. They are a startup that helps creators manage their project.
We didn’t have that so we had to do a lot of manual entry and reentry of data about our backers. Plus, the format of the data we received wasn’t in the easiest format for us to use. Instead of getting a single conformed sheet, we received a different file for each level of backer. We just rolled up our sleeves and created a single master file, but it was a pain.
Then we needed to reconcile this information with the format requested by our shipping agent. Not a big deal, but something that we hadn’t anticipated. Then there was all the issues pertaining to taxes, duties, and tariffs throughout the world. Again, not a big deal, but time consuming.
There is no ‘set it and forget it’ option. So even though we had some top flight consultants helping us out there was a lot of management overhead required. This was taking time and kept us from working on our project.
Fulfillment and management of the project is a full time job. Somebody on your team needs to be put in charge of this otherwise it won’t get done.
Other Lessons Await
What we’ve tried to do here is encapsulate most of what we know in as little space as possible. There are some other lessons that would-be crowd-funders will learn that we haven’t discussed. The true meaning of these tidbits of wisdom really only make sense when you jump in and do it. We tried writing them down but there was no way to get the point across without going into some long and rambling story. Suffice it to say we learned the true meaning of many of the clichés that abound in the startup community. We thought we knew before, but we only had an inkling.
Then only way to really know is to get out there and do it. What are you waiting for?