As of writing, up to 70% of projects fail to reach their crowdfunding goals.
Crowdfunding can be successful when you know how to do it correctly. When you don’t, it can fail miserably. This, of course, makes sense, but how is it that you succeed with collecting large sums of money from Internet users on Kickstarter and Indiegogo? The best way to do so is to avoid the ways most people fail at crowdfunding.
Fail #1: The Lack of a Competitive Edge
Kickstarter and Indiegogo is a site where new ideas go to thrive. This isn’t an Amazon.com or an eBay.com where existing ideas are sold. When you’re trying to sell the same old product or service everyone else is, no one is going to want to contribute funds to your idea. You’re already outnumbered, don’t have a name to your brand, and the only way to compete is through lowering price (and decreasing your margins) so the chances of you succeeding are low.
The way to sell your product is by identifying how unique it is to your audience. Since you are offering something no one else is, people will want to take advantage of it.
Fail #2: Disorganized
The campaign must be organized and show you’ve spent a lot of time preparing it. Sure, this haphazard and disorganized campaign look might have worked 10+ years ago at the inception of Kickstarter and Indiegogo, but no more. Products must illustrate that they are beyond the idea phase, projects must be well-organized with high-performing individuals in charge of each piece, and campaign pages must look polished.
If backers believe the campaign was thrown together in a few minutes, they will be less likely to take it seriously.
Fail #3: The Campaign Message Is Inconsistent
Oftentimes when I talk to entrepreneurs about their ideas, they explain it in about 10 different ways. My challenge to you, dear reader, is to make sure that your product has an “elevator pitch”.
An elevator pitch is a concise, pre-prepared speech that explains what your product is and does. Your product must have an elevator pitch that has been tested and refined throughout your pre-launch period so that you know exactly what to tell potential backers when they arrive on your crowdfunding page that will hook them.
Beyond your elevator pitch for the product, the campaign must have well-defined, clear goals and a straightforward strategy to achieve them. When backers don’t understand what you’re trying to do and how you’re going to do it, they won’t have enough faith in you to support your endeavors.
Fail #4: A Complicated Campaign
My 7th grade Humanities teacher, Mrs. Kramer (side note: one of the things I remember about her is that she is a huge Green Bay Packers fan), always reminded us about KISS – keep it simple, silly. Although very straightforward at the outset, a lot of entrepreneurs have trouble making sure this actually happens.
At its core, a successful project is summed up in this simple image:
Find your audience, capture them, have conversations with them, and send them to your campaign page.
For the in-depth guide on setting up and launching a campaign, be sure to grab the 80+ page handbook.
Fail #5: Undefined Audience
I can’t say this enough: you need to find your audience.
Kickstarter and Indiegogo isn’t the mass market, it’s a launch platform for products that solve specific problems and people who head there are looking for innovative ideas that they can’t find elsewhere.
Knowing this audience, it’s no use to say that your product is for “everyone” because that isn’t a true category to market to. The best projects hone down to a very specific group of people (called a niche) and speak directly to their passions, wants, desires, and fears.
If you’re trying to pitch to people who aren’t interested in your product, you’ll fail every time.
You must know who the right type of audience is for your campaign.
Fail #6: Unrealistic Funding Goals
Funding goals should be realistic.
You don’t want to overshoot or undershoot, or you’ll end up either not having enough money to do what you want to do or scaring off backers.
If you have an email list of 1,000 people for a $20 reward, you probably won’t hit your $500,000 listed goal on Launch Day (if at all). In this case, change your funding goal so that it makes sense with your project and objectives. Everyone wants to raise $1 million, but not everyone can and that’s OK because not every project needs that amount of funding.
Raising $100,000 and above requires a lot of upfront investment (in marketing). If this is what you are aiming for, make sure that you either have the investment to fuel that, or change your funding goal.
Know how much you need to implement your plan and stick with that number.
Fail #7: Ineffective Marketing
If you build the campaign, they will not come. Yes, this is a play on an American saying, but very much more true to how products are received and thrive.
To succeed with a Kickstarter and Indiegogo project, you must build the campaign and also effectively market it to your audience (see #5 above for more details on this).
Let’s break this one down a little bit more, shall we?
For one, marketing is attention. When you think about marketing in this way, you open the door to a lot of possibilities.
The more attention you can get for your idea, the more people will be excited about your product.
The more people are excited about your product, the more they’ll be willing to engage and provide feedback.
The more people know about your product, the more likely it is that they’ll tell their friends, family and acquaintances about it.
And the cycle continues!
So how do you get attention?
In short, there are two ways to get attention
You can pay for attention.
This comes in the form of the advertising and promotion that you do. You can pay for banners on Google, you can pay for Facebook ads, you can pay for reviewers to promote your project to their audiences. These are all ways for you to get attention and direct it to your project and what you do.
You can also not pay for attention.
The best marketing is direct, personalized and relationship-forming. This can include taking the time to talk in depth with someone at a trade show or striking up a conversation with a fan on Facebook.
At the end of the day, the more attention you get for your project, the more chances you’ll have of it succeeding.
Fail #8: Unattractive Rewards
Backers don’t invest just for the sake of backing. They want something valuable in return. This is why it’s crucial that your campaign’s rewards are attractive enough to make backers pay attention and want to get in on the action.
Creating your crowdfunding rewards might sound like an easy task. However, the true test that separates a phenomenal campaign from the rest is how you set up your rewards. You must set it up so that visitors who come to your page immediately want to back your project and there are 5 strategies to use to make this work.
Fail #9: Inexperience
This is a hard one for newcomers to the crowdfunding world, but don’t worry; just because you’re new doesn’t mean you’re destined to fail. Before launching your campaign, be sure to seek a mentor (get in touch with me here!), connect with other previous successful crowdfunders, and learn everything you can about the ins and outs of crowdfunding.
I recommend you start in these ways:
- Get the Crush Crowdfunding Handbook
- Listen to the Crush Crowdfunding Podcast
- Read A Crowdfunder’s Strategy Guide: Build a Better Business by Building Community
Fail #10: Bad Timing
As they say, timing is everything. Here are the key points to keep in mind when choosing when to launch your project.
1. What days are people checking emails?
When you launch a campaign, you’re looking for people to click on your email. It’s the biggest driver of Day One success and the culmination of your pre-launch efforts. Through your email, your subscribers will see that you’ve launched and then click to your campaign to support you. Tuesdays are days with very high email open rates.
2. What time are people checking emails?
I’d also recommend launching projects bright and early in the morning, around 6am PT/ 9am ET. Why? As you know, email lead generation is huge for Day One success of a campaign. By launching it early, you’re sending emails to inboxes right when people are checking it.
3. Are there holidays coming up?
During holidays people are off doing their own thing with friends and family and typically away from their computers. Imagine Christmas holiday – people who celebrate it are off doing their own thing with their families rather than checking in on Kickstarter and Indiegogo campaigns.
4. Are you ready to launch?
This one is a biggie! You should have gone through months of preparation to put a plan in place.
- Does your audience know you’ll be launching on a certain date at a certain time? If not, it’s time to tell them and hype them up for the launch!
- Do you have people ready to back on your first day? Enough that you meet at least 30% of your crowdfunding goal within 24 hours?
- Do you have people ready to write about you? More people writing about you = more eyes on the page = more potential for people to convert into backers.
- Do you have methods to get the word out to people? Again, the more people see your page, the more opportunity you have to convert them into backers.
- Do you have a means to encourage people to share? Make sure people who love your product (and have backed you) have the means to share about your project!
Failing Is Disguised as Success
Popular culture really frowns upon failure. However, I firmly believe that failure isn’t such a bad thing because you learn from it.
You will probably have a misstep here and there during your project, but the best thing to do is ensure that you are prepared. Do this by learning, reading, listening and watching as much content as possible before jumping in. Sign up for an account in the various crowdfunding campaign platforms and start backing projects.
At the end of the day, if you are unsuccessful the first time around, don’t be discouraged. Some of the most successful campaigns on crowdfunding are relaunches after a dismal first go at it. If this is you, be sure to set yourself up for success the second time around.
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