This is a late blogpost, because the event actually took place on 29 October 2013. I think it’s relevant again, because my friends from the Open Tech School Berlin wanted to raise funding through an Indiegogo campaign for their Hackership program. If you’re a hacker/programmer, check it out, participate and donate. If you’re a tech business person, check it out and donate, it’ll be good for your “looking for a CTO” karma.
The panel featured Slava Rubin, CEO and Co-Founder of Indiegogo, and Thomas Herzog, Innovestment – crowd investment platform. (I am so sorry I forgot the names of the other two present in this panel). It is hosted by Christoph Raethke, founder of Berlin Startup Academy.
Here are my notes from that day, a little scatterbrained but I hope it would create some helpful points for someone who wanted to start a crowdfunding.
Why do people actually give money
There are four basic reasons people want to give money through crowdfunding:
- They care about the person or the cause.
- They want one of the perks mentioned in the campaign.
- They just want to participate.
- They want profit (which only applies if it’s a crowd invesment).
Are your funding request satisfy one of the four?
There’s no specific limit to what your causes are because it’s currently very diverse. It’s ranging from things like charity, building furniture, games, companies, and artistic things.
But it’s not all about money
If you’re a company, doing a crowdfunding campaign is actually not all about money, it’s more to do with:
- Market validation, because you could see how many people who will actually buy your product, or give you money for your service.
- Extra promotion, because you could get more awareness for your campaign through indiegogo newsletter, or people talking about it, buzz is a buzz.
- Test marketing.
It’s not just transaction, but also building customer relation (because you know who actually cared about your product).
What you need to do to raise money
These are the common aspects of successful campaign. You don’t have to follow them, but these tips will definitely give you better chance :
- Have a good pitch, make a great video (most successful ones have this)
- Proactive, keep updating your campaign. 93% of successful campaign has perks, averaging around 3-8 perks.
- Have an audience that cares.
- Team of more than 4 people has 70% more success chance.
- If the campaign raise 25% in 5 days in less, it has a more successful rate of raising the fund.
Promoting your campaign
What’s a good campaign when nobody knows about it? Surprisingly (if you’re more into social media like me), the most effective way for spreading your campaign to people who would fund your campaign are:
Yes. In that order.
Source of funding
The source of funding usually comes from 1/3 your network, 1/3 network of network, 1/3 indiegogo network.
Indiegogo is democratizing the process, anyone could make a campaign. In this sense, it’s also an automated system, indiegogo is not there to promote your campaign.
There’s only two types of mistake people do in campaigning
- Not educated: then it’s indiegogo’s fault
- Educated but just not put it to work.
If you follow the strategy, you’ll have 100% chance of winning your funding.
Strategy you’d need to have
- Video strategy, how to approach people. It usually followed this pattern. The optimal length is 2-3 minutes. The first 30 sec and last 15 sec should especially made for indiegogo. First 30 sec: “Hi this is campaign… for indiegogo….” 2 mins 15 sec what it is exactly you’re working on, last 15 sec, “thank you and share”.
- Perk strategy, what kind of perks you offer and how it is influencing the campaign.
- Update strategy, should you putting in new perks or some secret strategy.
- Press strategy, organic natured, influencer strategy.
- Host community, people who would bring in more money.
If you don’t know who’s funding you on day one, don’t launch – Slava Rubin, CEO of Indiegogo
It’s is better to do your research and get a list of backers first before you launch your project and hoping it will magically get funded by some rich leprechauns. Also be sure to focus on authenticity and engagement, no sale and beg.