How to run a successful crowdfunding campaign: Gas-Sense
George Edwards is the founder of Gas-Sense, an innovative way to track how much gas is left in a canister and transmit to a smartphone or tablet - ideal for campers, those in mobile homes, or barbeques. Gas-Sense successfully used crowdfunding to launch their product, and here's what George learnt about creating a campaign that smashes its target.
Crowdfunding is just starting to become mainstream, and I'm delighted that London is reportedly the crowdfunding capital of the world! It can be a rock solid launch platform for a product and a great way to avoid giving up large chunks of your company to angel investors or getting into debt. In January this year, Gas-Sense successfully crowdfunded our first product launch - here are my top 10 tips.
1. Be open to suggestions
In my opinion, one of the most valuable parts of crowdfunding is the feedback you get from your market – so don’t ignore it! You can start to understand their concerns, their interest in different features and aspects of your product, and use that insight to develop your offering. That being said, retain your vision - you can’t please everyone and making lots of modifications can increase production timescales and lead to cost rises.
2. Communicate your brand and personality
Crowdfunding is a bit different to conventional sales. People want to know you and your brand, they want to know the backstory, why and how you are doing what you are doing. Be open and genuine - these online communities are very understanding and will respond far better if they know the bigger picture.
3. Keep your eye on the ball
It’s important to put in the hours. Make sure you have a full PR launch plan before you start (see no. 6), answer all of the comments quickly, and be prepared to put in a stretch goal or a new reward tier. Online communities can move fast and if an issue develops, you need to address it quickly before it snowballs.
4. Go data mad
There are a huge number of statistics available online, many from the platforms themselves. They look at the best time to post, what media to include, and what length to run the campaign for. Whilst you don't want to go overboard, you want to make sure you are giving yourself the best possible chance at success. For example we used data to decide that the campaign should be 30 days long, have a video, and provide rewards for pledges around £25.
5. Do your research
Before you start, make sure you have found all of the similar projects to yours, look at their websites, their videos and their pages. Look at the blog posts and journalists who wrote about them, and any other info you can gather. Try to understand why each project was successful or unsuccessful, and apply any trends that develop to your campaign. You can even reach out to the journalists to see if they would be interested in covering something similar. It is also worth studying the big ticket campaigns – the ones in national media for funding millions of dollars - and looking at the critical aspects of why they were a success.
6. Implement a full scale PR launch
As you launch, there needs to be a buzz. You want lots of backers quickly - this can help get you onto the featured section of a platform homepage, and this will bring big rewards. You need to identify a number of relevant journalists, ideally build a relationship with them, and get them to cover the launch. This will likely be much easier and effective with niche publications. You also need to spend ideally a few months before the launch building your social media following and getting them to engage with the idea of the campaign. You have to find your audience and make sure they are on your page, whether that means playing to an audience browsing hundreds of projects on a crowdfunding site, or a niche forum or Facebook group.
7. Implement quality visuals and tell your story
There is plenty of research that says campaigns with a video are up to 85% more likely to be funded. As I mentioned earlier, you need to get across who you are and why you are doing this, as well as what your product is. We used a production company that usually makes videos for charities, so they are experts at finding the human side to a story and getting it across. Similarly, I spent some time getting studio shots of the product. That being said, do keep your costs down as it is easy to spend a lot of money!
8. Choose the right platform for your project
There is a lot of discussion about which crowdfunding platform in the best. Indiegogo, Kickstarter and GofundMe are the biggest, but there are probably 30+ other big established platforms for specific niches, often with far more targeted communities and less competition. You need to look at where your potential customers are. Also consider the fees they charge and their typical funding model, or failure to meet target rules. Some platforms only take a commission of 5% plus 3% card fee if your project is fully funded. Some may take 15% whether or not you reach you goal. Some platforms allow you to sell debt or equity, while others only allow rewards and pre-orders.
9. Plan your reward levels carefully
People will typically back one of the middle band of rewards. Think how you can use these attractive levels to get your products into the market and spread your brand. The most popular pledge amount is $25, and the average is $70. Having 5 or 6 big pledges in a campaign can really help meet your targets, and certainly got us over the line.
10. Run the numbers
Make sure you have worked out all your costs and a contingency fund, and that your funding goal reflects this. Do some proper cash flow analysis to build the campaign into your business plan. Make sure you can deliver if you make exactly your goal, all on the least popular funding tier. Similarly, if your project goes so well, are you protected against a “success disaster”? Do you know how to deliver a million units in your publicised time scale?
The one thing to remember is that it is a very competitive marketplace, where 62% of projects fail to meet their funding goals, and the results are very public. If your campaign fails, it will be out there on the internet for ever and can have an impact on your ability to raise money in the future and on future sales. Don’t let that put you off, but do your research and make sure you give yourself the best possible chance of success!