Are you looking to launch a project and need over $100K in funding?
The dire statistic is that only about 3,7% of projects have raised over $100K.
Beyond that, even less than 1% of projects amass over $1M in funding.
How do you raise money with crowdfunding?
What separates these campaigns from the other 99%?
There are five factors that create the foundation for a smashing success. Let’s review them to make sure you hit all five.
1. Product solves a mass-market need
Any successful campaign starts with the product. To raise $100K or more on crowdfunding, your product must solve a problem for a large enough group of people. In other words, not only do you have to create a truly helpful product that solves a real problem, but you also have to make sure that the problem spans a large group of people.
Browse through Kickstarter in their “most funded” category and see for yourself what types of products actually get funded.
Scroll through the projects that didn’t get fully funded on Indiegogo and Kickstarter. When looking at the vast majority of projects that don’t reach their goal or have very low funding amounts, it’s easy to see that many of them weren’t great products to begin with.
If you’re wondering how to validate your product idea before launching on crowdfunding, check out my other article here.
2. Product is correctly positioned
Positioning is how well you communicate the value of your product to your target consumer.
Communicate the value — do you know the feature that makes you stand out above the rest of your competition? This can be anything from colors to materials to portability and is different across all products and industries.
Target consumer — do you know the audience that most needs your product? Know if you’re targeting stay-at-home parents with two-year-old children or working women who commute 30 minutes or more to work.
The most successful campaigns have gone through rigorous testing to lock down the positioning before they even launch their campaign.
The most effective way to do this is to run Facebook and Instagram ads during your pre-launch phase to get people to sign up for your email list. This is your opportunity to test different marketing messages and different audiences.
3. Product is promoted in the right channel
The message medium must match the audience. Understand that audiences get information in different ways. No one in your audience group will know your product if you’re trying to reach them on a different channel.
One tip: I recommend using Facebook and Instagram due to the sheer number of people on the platform and the detailed level of audience targeting you can do there. Beyond the campaign you can use your learnings to determine other channels that will work for your product.
4. Product is priced correctly
Getting the pricing wrong can completely kill your campaign. Here are factors to consider when pricing your product:
Research your market — look at similar successful Kickstarter/Indiegogo campaigns and how they priced their product. It isn’t reasonable to price your product at $1,000 if a successful competitor prices at $100.
Understand your costs — before coming up with your pricing, make sure you understand how much it will cost to create each unit of product. Price your product so that you come out positive.
Test your pricing — during your pre-launch phase, it’s helpful to ask people to put down a deposit to reserve your product at a certain price. You can test different price points during this stage to see what resonates the most with your audience.
One more tip: if you are unsure of your pricing going into your campaign, it’s easier to start with a lower price option. It’s normal on Kickstarter/Indiegogo to have price tiers “run-out” and get more expensive over time. This way you can incrementally go up to see which prices people are willing to pay.
5. Large marketing budget
Almost every campaign that has raised over $100K+ has spent money on marketing. Right now the most spend goes into digital advertising and the most effective platform is Facebook (including Instagram).
See my other article to determine how to budget for your campaign.
Advertising is the most consistent source of traffic for large campaigns. It also creates a positive effect on all other sources of traffic. For example, consistently driving backers to your campaign through ads will help you stay high in the rankings on Kickstarter. When this happens, you will organically get more traffic from Kickstarter’s community (when you make money, Kickstarter makes money).
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