8 Crowdfunding Tips from the Expert who Launched Pono with Neil Young
The myth: If your project is brilliant enough, visitors to sites like Kickstarter and Indiegogo will find it and fund it. The reality: Successful crowdfunding results from a careful strategy that begins months before the campaign is announced.
That lesson comes from Alex Daly, founder of Vann Alexandra, a crowdfunding consulting firm. Daly came to her crowdfunding expertise somewhat accidentally. In 2012, she was trying to raise grant money for a documentary about the beloved New York radio station WFMU. Someone suggested she try Kickstarter, which turned out to be a natural fit. In all, she's guided 11 crowdfunding campaigns, and all of them met or exceeded their goals. Neil Young's campaign for the Pono music player raised more than $6 million. She's been called the "Crowdsourceress" in the press.
Along the way, she's learned a lot about what makes a crowdfunding effort take off. And she's willing to share some of her her best tips:
1. Start three months out.
That's a minimum, Daly says. Six months is better. Spend that prep time building an audience for yourself and your project. One of the best places to start is by building a large social media following, she says. "That's why celebrities are catching on to crowdfunding, because they have hundreds of thousands of followers on Facebook and Twitter."
But that's not the only way to build an audience, she says. See if you can tap into an organization's social network, such as one for your school or company or other group. "Social media isn't the only way," she says. "One successful project didn't have a big social media presence, but they had a mailing list with more than 2,000 names."
2. Influence the influencers.
"This is a little trick," she says. "I have my clients make a list of influential people they know, or have a connection with. Always, within six degrees of separation from you there is someone who has a huge following. Make a list of 10 to 20 of those people and then ask if they'd be willing to tweet, post, or send an email about your project to their network."
3. Tell a good story.
Yes, people fund projects because they like and want the final product, but what really engages funders is an irresistible story. "What is something about your project anyone would be attracted to?" Daly asks. "Be relevant, accessible, and universal. Tell the story and the idea that brought you to it."
4. Invest in a good video.
"If you're going to put your money into anything before the launch--other than hiring me--hire a videographer," Daly says. Keep the video under three minutes, and a minute or two is ideal, she adds. "We all have short attention spans."
And she suggests trying to create a video that will stand out from the crowd--many videos just feature the project owner talking earnestly about what he or she is planning to create.
5. Choose rewards with care.
"If people are willing to donate to something that doesn't exist yet, be generous with your rewards," Daly says. "That's the only tangible thing they'll get."
The most effective rewards, she finds, are those that make a funder feel like part of the project. For one of her film projects, funders could insert a subliminal image into the film for a donation of $100, and many took her up on it. For other projects she's offered a high-level reward of a producer credit or flying a funder to the set, an in-home barbecue lesson, or (for a documentary about strippers) a pole dance tutorial.
If you're funding a consumer product, clearly one of your rewards should be a discount on the product or the product itself. But you should still strive to make funders feel like insiders. "Add a little stamp with the number, or engrave it and personalize it," she suggests.
6. Start with "love money."
Before your campaign begins, get commitments from your friends and family members to make contributions as soon as your campaign goes live. "They should be ready to contribute to make it look successful," she says. "A lot of sites--if you do really well in the first 24 to 72 hours, they'll put you on the front page."
You should have 20 to 30 percent of your funding goal locked in this way before you start, Daly adds. If you can't come up with enough solid promises to reach that amount, she recommends lowering the goal instead, and hoping you'll surpass it as successful campaigns often do.
7. Be communicative.
"People want to know the person behind the screen," Daly says. "If they have questions, answer right away and be honest with your answers."
This is especially important if your project falls behind schedule. "Don't have radio silence," Daly says. "If something's late, say, 'I'm so sorry we're delayed, here's a photo of the factory where the item will be built.'"
8. Kill failing projects quickly.
You will nearly always know within the first week whether your crowdfunding effort will be successful or not, Daly says. It's almost unheard-of for a project to start off slowly and build later. Successes are successful right out of the gate.
What if you launch a campaign and it has a bad first week? Consider pulling the plug, Daly says. Rather than let it finish unfunded, "Cancel it and start again."
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MINDA ZETLIN | Columnist | Co-author, The Geek Gap
Minda Zetlin is a business technology writer and speaker, co-author of The Geek Gap, and president of the American Society of Journalists and Authors.