8 content marketing fails: why some content marketing campaigns fail to deliver
Why The Majority Of Crowdfunding Campaigns Fails
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Transcript of Why The Majority Of Crowdfunding Campaigns Fails
Why the majority of Crowdfunding
campaigns fails
Elena Mikhaylovawww.CrowdfundProductions.com
Davinci InstituteSeptember, 2014
Current Success Rate on Kickstarter is below 44%.
For the majority of other platforms it is even lower.
Most campaigns fail Even before they go live on a
crowdfunding platform
The main reason – lack of preparation
How long does it take to get ready?
It Depends: On your funding goal On the size of your social network On your expertise On your resources (time, team, money)
Six weeks to six months
Why Crowdfund Marketing Beta-Testing, Crowdsourcing Pre-Sales, Customer Engagement Market Validation for the Next Funding
Round
4 Types of Crowdfunding Donations – money is provided for worthy causes, non-profits or
people in need. There is no expectation for return.
Rewards – money is given in exchange for “perks”. The most popular one is the copy of the product to be created as a result of the CF campaign.
Equity - funds are invested in exchange for the company’s shares or participation in the future profits.
Debt (P2P and P2B) – funds are provided in return for interest payments.
Is your project a good match for rewards crowdfunding?
B2C Reasonably affordable for general public Easy to understand value for large groups of
people Can create strong emotions/connection/”cool”
image Can build a community around the project
PlanningWhat: how lucrative is your product/project?
When: season, how much time do you need
to get ready, how long is the live campaign?
Who: your target group/groups –
demographics, geography, lifestyle
How: marketing channels, influencers
these websites provide free or inexpensive solutions for independent fundraisers:
SelfStarter – free open source software to build your own crowdfunding website. The latest famous project, Tile, raised $2.6M in July from almost 50,000 backers,CrowdHoster – an application hosted by CrowdTilt; currently. The most famous success story – Soylent.me campaign which has raised over $1M,CrowdfundingSite.net – license plans start from $129 or $328 per year,IgnitionDeck – WordPress framework, starting from $79 for unlimited websites,Mimoona – Plug&Fund app, three monthly payment plans,ITPrism.com – crowdfunding open source software for Joomla; free and PRO versionsCelery – platform to accept and manage pre-orders on Wordpress, Tumbrl, Shopify and other websites; 2% per transaction plus PayPal fees.http://www.crowdfundproductions.com/kickstarter-alternatives/
Top Mistakes Not doing your homework: research other projects,
their perks, video, media, comments, etc. Not building your crowd in advance: nothing can
be more miserable than a creator launching the project and waiting for the crowd to rush with the money. Fake fans/followers/pledges
Not preparing your media outreach, spamming your network
Not having three plans Not making a budget and sticking to it. Decide
if your goal is mostly fundraising or marketing. Not getting feedback for your perks in
advance
Planning - Perks Importance of small perks Most popular Depends on your target group - amount Depends on your target group – lifestyle Geography – shipping costs, taxes
Planning - Budget An Avg. Successful Project on Kickstarter –
below $10,000 Necessary Minimum/Stages How much can you REALISTICALLY raise? - 30%
Rule How much do you need to raise (on top of your
project costs): platform fee (4%-9%), payment processor fee (3.9% -5%), cost of production, packaging and shipment for your perks, marketing costs, canceled pledges, returns, taxes
Kickstarter• Founded in 2009 in New York City• Available for US, UK, Canada, Australia, New
Zealand and Netherlands residents, • Creative projects in 15 categories• All-or-Nothing Funding• Almost 7M Backers• 80 projects – raised over $1,000,000• Most successful project – Coolest Cooler–
over $13M
Kickstarter (cont.)• Approval process • Projects only• Prohibited uses (including causes or personal
needs)• Fees: 5% Kickstarter plus Amazon payments
(US) or Credit Card fees -3-5%. Zero, if the project failed.
• Must have rewards• Donations between $1 and $10,000 (in the
US)• If a project succeeded, the money usually is
available in 2-3 weeks after the end of the campaign
Live Campaign: Common Mistakes
Video – too long, not to the point, doesn’t tell a story
Description – too long, not enough visuals, doesn’t create trust (timeline, budget)
Talking about yourself instead of the benefits for potential backers and partners
No plan for stretch goals Lack of updates, communications with the backers No plan for keeping a momentum Spamming
What do you need to say?• This is our product• This is how you are going to benefit from it• Call to action• This is our story (how/why we came up with the idea)• This is how it works• This is how we are going to use the funds• This is the timeline• This is our team
http://www.crowdcrux.com/red-flags-to-avoid-crowdfunding-scams-and-con-artists/
Live Campaign: Common Mistakes (cont.)
Not monitoring and adjusting your action planOutsourcing, dropping off your communications with the backers after the end of your campaignNot understanding campaign dynamics. Strong start by your own connections - the Kickstarter community -media coverage - strangers. The more backers you bring – the stronger will be support from the crowdfunding platform itself.
Money raised: strangers vs your own connections
More than 80% of all Kickstarter campaigns raise below $10,000
The smaller the amount you are raising, the more you depend on your own network
Up to $5,000 – 80-90% from your connections$30,000-$50,000 – 20-40% from your
connections$100,000+ - 10-15% from your own
connections
Post CampaignCampaign and Data Analysis
Communications with backers and mediaPerks fulfillmentYour Campaign
Hasn’t Succeeded Until You Deliver The Perks
To Every Backer
Contact meWebsite: www.CrowdfundProductions.com
Email: [email protected]
LinkedIn: www.linkedin.com/in/elenamikhaylova1/
Skype: Alive_Digital
Twitter: @Alive_Digital