of the week!!
Are you planning to run a crowd funding campaign? Are you fascinated by how some kickstarter projects are racking up 100s of thousands of dollars? Are you planning to launch a crowdfunding campaign? Any yeses?? Then you will find this article interesting.
My name is Alex. I did a crowdfunding campaign for a simple hardware product called Tangle. If you are having troubles with tangled earphones Tangle is the product you need to get. You will also find Tangle interesting if you are looking for a new marketing tool to engage your customers. Anyway here is the link to the campaign. Yes we did not raise the full amount.
This is how the product looks like.
Looking back I realize that I was so naive and I did not realize a lot of things that needed to go in a crowdfunding campaign. But the good side is .. I know them now, so do you.. if you get to the bottom of the article
We assumed that if we put up an awesome campaign video that showed the value to the customer, people will come flocking to us – Wrong.
The one thing that I think we got right is that we got a pretty decent video pitch about the product. We have been watching kickstarter videos after videos and we thought we nailed it. But this is what we missed.
1) We had a lousy marketing plan.
We approached news papers and bloggers to cover us after 15 days of starting the campaign. Remember we were thinking that a good video and we are done with marketing ! I had also written a post on therodinhods during the campaign.
I was lucky to have the opportunity to visit the world makerfaire in New York. There is when I understood the concept of early stage marketing for crowdfunding products. There was 2 products that caught my attention. One is DIWire (The campaign is live and the already raised their money) and Smart Jars – There were many awesome projects/ products at the makerfiare, but these products caught my attention because they were pre-kickstarter. They have not launched their campaign yet, but they were aggressively showing their product to the people and telling them that they are launching soon. Infact Smartjars was even giving away samples. I got 2 samples for free. 🙂
What struck me is the benefits of showing your product at makerfaire.
- There are lot of people who will see your product working. People do make purchase decisions in fractions of second but a lot of times they make purchase decisions after seeing a product a couple of times. The earlier you get to showing your product to people the better
- You get feedback on your product. Most importantly you get feedback on your pitch.
- Media gets to see your product. Just like customers even they take time to decide to write about you. Exception being if you are raised $100,000 in a day… We are talking about strategies to get there
Both these companies had a successful crowdfunding campaign.
2) The psychology of people – part 1
The thing about crowdfunding is that people notice how much % of the campaign you raised. Let me guess – You must have taken a look at my crowdfunding campaign – Tangle and thought “What a looser, He did not succeed in the campaign” or in a more gentle way “Hmm this product did not succeed in its crowdfunding campaign” 😛
We would have done better if we had set our campaign at $1000 instead of $5000. Because then first impression of people would have been “Ohh they had a successful campaign” Its takes a while for people to look at the amount. Pebble watch raised 10 million. we raised $1000 but we would both have had the same first impression 🙂
3) The psychology of people – part 2
As an extension of the earlier point, do not launch your campaign until you have a solid plan to reach 40% of your funding goal in 1 day(Aim for that atleast). The point is that I noticed that even if someone(some stranger who is browsing though kickstarter/indiegogo) is convinced after seeing your video, when he sees that your product has only raise 10% after 15 days, he would think again. At the same time imaging if the same stranger likes your product and sees that its 50% funded in 15 days, just think about difference in thought process. Remember your campaign is successful when you raise money from people who your dont know. This point is the most important point. If you dont know exactly who is going to buy your product on day one to reach 40% of your goal then your campaign is in trouble. This first 40% can be your friends and family but they should be all pumped up and ready on the day of your launch.
4) Keep the money that you want to raise as low as possible.
Particularly if you are doing it for the first time. My thought was there is a lot of people who are raise a ton load of money.. I should be able to do a modest $5000. No!!! Your logic should be as small as possible for you to successfully do it. Look at a campaign of a friend of mine. He asked for $1889 and he raised more than $100,000
Brick pi asked for $1889 but raise more than $100,000
Remember people tend to first think about the success/failure then the % raised and then the magnitude. The magnitude is only relevant to your bottom line. For the customer the %raised is more important.
5) Pitch only one and one value in the campaign.
Notice how we were pitching Makeystreet and Tangle. You will find Makeystreet interesting if you are a hardware hacker and is looking to find parts for your new awesome project/product (set A). You will find Tangle interesting if you have troubles with messy earphones (set B). Our assumption was that the set of people who would be interested in the campaign will be set A union set B. But the people who were interested in the campaign ended up being set A intersection set B, which is an extremely small number of people. Think about it – the reason it is set A intersection set B is because if you are not really interested in one of them, you are like what the hell, these guys looks shady .. This could be a debatable point but I think it makes sense to focus on one value proposition.
Looking back now, we realize how lousy a marketing campaign we did. We will do it better the next time for sure. Now with this article you should do atleast better than us. Thats the bench mark that we set for you if you are planning to do a crowdfunding campaign.
If you think you are creative and love tinkering with stuff – You need to go to the makerfaire.
Its happening in India !! for the first time in ahmedabad on Jan 4-5. its a really cool event where a lot of hackers and maker come and show their stuff. Lots of robots, cool fashion stuff, 3D printed stuff…. If my words does not convince you I am sure these pictures will – my album from makerfaire New York.
Some shameless marketing for Tangle 🙂
That is how Tangle looks in print. Its more awesome in your hands. You can get them from www.getatangle.com.
Here are some examples of some custom Tangles that we made for branding purpose
If you want to use Tangle as a branding tool for your event, drop me a mail at email@example.com.
Would love to hear feedbacks on how we can do better.
Alex J V