Crowdfunding is a fast-moving target these days, with niche sites emerging, a growing ecology of support services, the emergence of equity funding, and more. After talking to makers who’ve both successfully launched and backed projects, and to those in the crowdfunding business, we put together this collection of tips, tricks, and helpful resources for makers considering launching or backing projects.
Tips for Project Creators
Here are a few hard-won, often overlooked lessons in launching a healthy campaign, as told to us by successful project creators.
Learn the Space Before You Launch Into It
Do research, lots of it, before launching a campaign. Look at all of the platforms, compare strengths and weaknesses, talk to those who’ve launched on those sites. Back a number of projects. Bookmark campaigns that appeal to you, how they’re being executed, and think about whether you can emulate them.
Do a Video, But Keep It Short and to the Point
Doc Popular, a musician and comic book author who’s created six successful campaigns and backed nearly 350 others, says: “Keep your videos short.” This was a sentiment we heard from many other successful project creators. Videos are very important for most crowdfunding campaigns, but creators get carried away with them. They really are an ad and people have short attention spans. A three-minute video is fine for most projects, and when you look at the viewing stats on the back end of sites like Kickstarter, don’t be surprised to find that the majority of people only watch the first minute or two.
Be Fun and Informative with Your Backer Updates
Doc Popular, and many other project creators, take pride in keeping their backers updated during the entire funding process and beyond. “I want them to feel like they’re part of the process, so I share progress pics and ramblings as often as I can. I may even try to set calendar reminders to share some bits of news way after a project has ended. If I make a mistake along the way, I like to share it early and honestly with my backers. There may be some complaints, but it’s better if I deal with it early on rather than just avoid talking about it until things get out of hand.” I did my own successful Kickstarter campaign in 2013, to raise money for my memoirs, Borg Like Me, and I also took great pains to keep my backers in the loop and entertained via regular campaign updates. Many backers told me it was their favorite part of the campaign and they looked forward to seeing my updates in their mailbox.
Be VERY Careful with Your Rewards
Shing Yin, who’s successfully launched four projects, cautions makers not to get carried away “offering up secondary products and lots of weird stretch goals. A successful crowdfunding campaign is about delivering exactly what you said you would, not delivering everyone a bunch of extra buttons and T-shirts.”
Sam Brown (Make: contributor, game designer, and tech educator) has heard this tendency to over-promise and underestimate rewards referred to as “Kickstarter hell.” He adds: “If your campaign sells 20,000 units of a reward, and it takes you a mere six minutes to box that reward, create the mailing label, apply it, weigh the package, and print and apply postage — if you multiple that by 20,000 rewards, that’s a full year’s worth of work for one person.” Aka Kickstarter hell.
Realistically Calculate (then Recalculate) Reward Pricing
Make sure that you don’t go crazy on too many rewards. John Dimatos, former senior director of design and technology communities for Kickstarter, says that 5–7 backer reward levels are the most common in successful campaigns, with the most typical pledge level being the $25 range, with a $100 tier level frequently delivering the most funds to a campaign.
Also make sure to nail the true price points of all of your rewards. Be very thorough when calculating actual costs, including packaging, postage, and anything else that goes into fulfilling the rewards. And labor!
Tip: The most cost-effective rewards are virtual: ebooks, apps, and other digital products that cost little to fulfill.
Develop with Your Backers
Many of the most successful crowdfunding creators, especially those that regularly use crowdfunding as an integral part of their business model, let their backers in on the process of developing the final product (or in defining and developing stretch goal rewards). Recognizing this, many crowdfunding sites are constantly adding tools for better creator/backer communication, offering emailed updates, project page discussion, and live video streaming and chat on project pages. The more you engage your backers in the actual creative development process, the more invested they’ll be in the final product.
Have a Deep and Well Thought Out Marketing Plan
This is probably one of the most overlooked aspects of crowdfunding. You put so much time into launching and maintaining the campaign, it’s easy to forget that you have to give equal time to getting the word out on the campaign before launch and over the course of the entire campaign. Many creators plan an upfront media effort, and maybe one towards the end, but they fail to try and keep heat on it throughout the funding period. I thought I had a decent plan for my book project, but I could have used three times as much exposure.
Build Buzz, Soft Launch, and Early Bird
Many of the more successful campaigns, campaigns that I’ve gotten most excited about, are ones that began to build a buzz long before the actual campaign launch. For several of these, I eagerly anticipated the launch date and was excited to grab an “Early Bird” discounted pledge level the moment the campaign went live. Many creators do a soft launch with early bird pledge levels. They will announce the launch only to their customer base and “friends and family network,” and then do most of the big PR push 24 hours (or so) later. This way, there’s a run on early bird offerings from an excited base. Then, when everyone else shows up, the campaign has already put up some decent numbers on the scoreboard.
Consider Maker-Optimized Crowdfunding
We hear plenty about Kickstarter, IndieGoGo, and GoFundMe, but there are other crowdfunding sites and online communities with crowdfunding components optimized for makers and similar market small-fries. What too many creators in the maker tech domain, especially first-timers, fail to understand is the significant complexity of bringing a high-tech product, even a modest one, to market. To address this, sites have emerged that, besides helping to raise money for projects, assist you in getting your projects into production and building your market.
Probably the most successful and fully realized of these sites is Crowd Supply. Where Kickstarter doesn’t want you to think of them as a store, Crowd Supply might be offended if you don’t. Started in 2013, this Portland, Oregon company has served some 150 makers to date, creators like Star Simpson and her Forrest M. Mims III Circuit Classics boards, OnChip’s Open-V open silicon microcontroller, and Andrew “Bunnie” Huang’s Essential Guide to Electronics in Shenzhen. Crowd Supply carefully curates the projects, looking for products that “add something new and exciting to the world.” Once a project is chosen, they endeavor to assist from planning and funding through development, manufacturing, and sales. They’ve also drafted a Proclamation of User Rights that they require projects to adhere to.
Baqqer is not yet as well-known as Crowd Supply. Like a lot of domain-specific services, they aim to “offer a singular experience for makers,” as Baqqer founder (and former Make: staffer) Dan Gailey puts it. They seek to build a true maker community around the process of developing, funding, and supporting interesting projects. “One of the most important things you can do is to build a community around the things you love,” says Gailey. Baqqer is still very small, and it remains to be seen how many such niche communities are sustainable, but it’s heartening to see services emerging specifically targeted at makers, tech culture, and small-run high-tech products.
Tip: You may find a better solution for your goal with an alternative to crowdfunding, like Patreon, Selfstarter, and Ethereum.
Consider Certification Programs
To address the issue of whether creators and projects are of sound mind and sound design, certification programs have popped up. This is a third party entity with considerable experience in tech develop and manufacturing. They examine a pending product and its funding campaign, the manufacturing timeline, and put their seal of approval on it if they like what they see. Two such programs for makers are Dragon Certified and Arrow Certified. Dragon is a fee-based program; Arrow Certified (in partnership with IndieGoGo) is free to creators whose projects are approved. Arrow also sets aside “flash funding” (currently $1,000,000) to pledge in Arrow Certified campaigns.
Tips for Project Backers
We talked to makers who’ve backed numerous projects and asked for some tips on crowdfunding that may not be as widely shared.
Be Honest with Yourself About Your Risk Tolerance
There is always some degree of risk in crowdfunding, so don’t forget about the speculative nature of what you’re doing. It’s a lot more fun if you have realistic expectations. Don’t pledge a lot of money if the project doesn’t seem sound and if you’re not willing to risk losing the money that you pledge.
“It’s still the Wild West out there,” says Make: contributor and prolific crowdfunding backer Kent Barnes. “Buyer beware. Kickstarter, IGG, and other sites need to pick up their game and figure out how to make crowdfunding safer for backers. If they don’t, more fraud and scams are going to creep in over time.” Doc Popular adds: “I’d like to see accountability become the next big trend in crowdfunding, maybe even by only offering creators part of their funding until their project is completed. That may be a little harsh, but as more people feel burned by one bad experience, it’s going to fall upon the crowdfunding community to find ways of rebuilding that trust and reliability.”
Look Critically at What You’re Backing
Ben Joffe from HAX, the well-known hardware accelerator: “Read between the lines of project descriptions and videos. You’ll be surprised how much you can figure out. It’s not uncommon to see that, despite all of the details, there is no proof that the creators actually created anything themselves, generally a bad sign. Sometimes, even the feasibility of the project is clearly questionable.” Do your homework. Use your gut. As Joshua Lifton of Crowd Supply says: “If it seems too good to be true, it probably is.”
Use Small Pledges to Support and Follow Many Projects
Kent Barnes engages in crowdfunding in a way similar to many people I spoke with. He’s backed nearly 600 projects, but for many, he only pledged the minimal amount. “By pledging at the entry level, usually $1, I get the project updates. This way, you can follow the campaign and decide to raise your pledge later if you like where the project’s going. I like the idea of helping, micro-financing, cool maker projects. It’s a wonderful way of bringing new ideas to market and giving the money directly to a person with a bright idea.” Of Kent’s backed projects, 50 were unsuccessful (didn’t reach their project goal) and 16 were cancelled or suspended.
Regular Make: contributor John Edgar Park has backed 10 projects online to date, all eventually successful except for one. “I think it’s wonderful that people, particularly creative people, have the opportunity to offer highly personal, unconventional, niche projects,” says Park. “Crowdfunding offers them some assurance that they’ve correctly gauged their audience, and it feels like a way to serve the long tail with relatively low risk. Crowdfunding allows people to create quirky and charming games, odd gadgets, and the like, without losing their shirts.”
Pledge to Access a Pledge Manager
Many projects these days employ a pledge manager, third-party software designed to handle the often-complex rewards fulfillment. After a successful campaign, when rewards are ready to be shipped, backers are invited into a pledge manager, and at that time, can upgrade to a higher pledge level to receive higher rewards. By backing a project at a very low level (sometimes even as low as the $1 “tip”), you can often gain access to the pledge manager. This way, you can see the entire arc of the campaign, see how many stretch goals were unlocked, and see if you still have confidence in the campaign before you invest in a significant backer level. Some creators even spell out at what level you have to pledge to access the Manager. If you’re unsure, ask the project’s creator.
Get Involved with the Project
All of the major crowdfunding platforms allow you to engage with project creators. If it’s a project you’re excited about, get in there and help shape the final product by joining the community of backers that grows up around most projects. Project creators love this kind of input, it will help them to make a better product, and you will feel a real sense of investment in that product.
Learning How Things Work Through Project Funding
One interesting side benefit to crowdfunding is that it can be used as a learning process for those interested in small-scale manufacturing and how things are made. Doc Popular writes: “I think crowdfunding gives consumers a lot more insight into the products they buy. One of my favorite Kickstarter projects was for kevlar socks. The creator had done his homework, gotten quotes and leads on manufacturers, but when he went into production, he ran into one problem after another. He was good at sending out updates and now I know more about how socks are made than I ever thought possible (and the difficulties of working with kevlar thread). I felt terrible for the creator, but was glad I backed the project. Now I know more about the garments in my life and what goes into making them.”
Judging a Project’s Viability
Small manufacturing facilitator Dragon Innovation created their Dragon Certified program to help provide more confidence for backers of tech projects. The idea was to create a seal of approval process from a respected source so that project backers at least know that some entity within the industry has scrutinized a potential project’s mechanical, production, and market viability.
Also to help assess the viability of hardware projects being launched through crowdfunding sites, crowdfunding legal reformer, father of the “crowdfunding exemption movement,” and former Make: Executive Editor, Paul Spinrad, has proposed the idea of a volunteer project vetting board. This group would look at proposed crowdfunding candidates and fill out a survey of pass, fail, maybe, and notes of their assessment.
Kickstarter is fond of reminding people that they are not a store. Crowdfunding is about product development and developing a market, a user-community, not just customers pre-ordering your products. As Ben Joffe of HAX, told Make:, “For us, Kickstarter is an ‘awareness enabler.’ If a campaign goes well, it can not only finance you, but also attract your investors, distributors, staff, media, and other good things.” Ben continues: “We see Kickstarter as a tactic, not a company strategy (i.e. long-term success it not tied to crowdfunding results). We had companies do modestly well on Kickstarter then go on to become highly successful afterwards (e.g. Makeblock and Next Thing Co.). Inversely, success on Kickstarter doesn’t mean everything will go well and doesn’t ‘prove’ a market beyond innovators and early adopters. Real success is when a startup not only ships what it promised, but goes on to establish scalable sales and distribution.”