A while back I wrote a post comparing Kickstarter to Indiegogo that has turned out to be the most popular post on this blog. Apparently people are very interested in advice on crowd funding :-)
Since that post I have contributed to more campaigns on both Kickstarter and Indiegogo, as well as running a crowd sourced fundraiser independent of both platforms, and I have a new batch of insights you may find helpful if you are considering starting a Kickstarter campaign. Keep in mind that, while I will be using the label "Kickstarter" these tips apply pretty much across the board for crowd funding.
Here, in no particular order are ten of the top mistakes you should try to avoid when using crowd funding:
1) Putting a lot of work into your pitch (video and essay) but then just sitting back and waiting for the money to roll in.
- Making your pitch is only the beginning. Your project is sure to die on the vine unless you have a coherent plan for publicizing it. A terrific tutorial on publicizing a Kickstarter campaign can be found here.
2) Forgetting that, in most cases, the majority of your money will come from people you already have relationships with.
- No matter how well you publicize your campaign you will find that your most generous and engaged donors are people you already know. Family, friends, co-workers, colleagues, etc. Make a list of these people before you launch your campaign and be brutally honest with yourself while assessing how much each person is likely to support you - both financially and with spreading the word.
3) Assuming that others will automatically have as great a passion for your project as you do.
- Just because your friends like you doesn't mean they believe in your project. Work hard to explain your project in an exciting and engaging way. You want your support network going that extra mile for you. Convince them your project has a solid vision and that they can count on you to follow through with it.
4) Asking for 100 % of your project budget via Kickstarter
- Have other backup sources of income lined up in case you don't make your goal. Consider using Indiegogo if you need a flexible funded campaign rather than the traditional "all or nothing" Kickstarter campaign. Click here to re-read my explanation of the different kinds of campaigns.
5) Neglecting to factor in fees charged by Kickstarter and Amazon Payments
- Read carefully the page on Kickstarter that explains all the fees and the percentage that Kickstarter takes of your project total. Be sure to add those fees into your total "ask" when you set your Kickstarter goal. It's an awful feeling to think you've raised all the money you will need only to find you have come up short at the end of the fee process.
6) Not putting enough thought into backer rewards.
- Be sure to offer the best backer rewards you can think of - things that your backers will be excited to receive - but don't overdo it by offering rewards that cost you a lot of money to acquire. Reward items should be donated, or things that cost you very little, whenever possible.
7) Not factoring in the time and money needed to fulfill backer rewards
- You can break your budget with shipping costs for heavy items or items that need special handling or special packaging. For example: I had to invest in poster tubes that well exceeded the cost of printing the posters. They were also expensive to ship. I also had trouble navigating the Kickstarter spreadsheets and wound up creating my own reward tracking system. There are now companies that specialize in fulfilling backer rewards. If you plan to use one, remember to add this expense to your project budget. Click here for an article on such companies.
8) Not having a backup plan to accept donations from payment sources outside of Amazon payments
- This was a real headache for me personally when I used Kickstarter. There were backers that wanted to support the project but, either they wanted to pay me by personal check, or wanted to use a credit card or paypal or other payment method besides Amazon Payments. Not only is Amazon the only way to process Kickstarter payments, Kickstarter has very specific rules that prohibit you from "paying yourself" to reach your goal. Which meant that I could not accept personal checks and then transfer them to the project. When I contacted Kickstarter support about this problem I received the following advice: "You should probably find a friend with an Amazon account who would be willing to process payments on your behalf." I take this to mean that I should have accepted the personal checks and paypal donations personally, found a friend with an Amazon account, written him/her a check for the total amount, and let him/her make the total donation for all those other payments.
9) Not using social networking
- This seems like a no brainer but you are doomed to fail if you are not already using facebook and twitter and other forms of social networking in your regular life. If you are planning a project a year from now and don't currently use social networking, make your accounts NOW and get busy forming relationships.
10) Not understanding the best level of engagement needed with backers or the proper number of updates.
- One of my pet peeves when I back a project is being inundated with project updates. Choose your number of updates - and requests for backers to keep sharing your project with other potential backers - carefully. Too few and you won't create excitement, too many and you will alienate your backers and they will start hiding you from their facebook feed and deleting your emails. I personally feel as though requests for sharing should be posted 1 to 2 times a day - with updated funding totals - but actual "updates" should be saved for really important news. No more than 9 big updates in a 30 day period unless your update news is truly earth shattering.
This post has been long but I hope you will find it helpful as you set off on your crowd funding journey!