This year, crowdfunding is expected to surpass venture capital as the main source of funding for startups according to a study by Massolution. Through its various forms including reward, donation, equity, and debt/lending, the crowdfunding industry is expected to surpass venture capital infusions into new companies depending on how you splice the data and which trends you look at.
It is undeniable that crowdfunding is a major opportunity for many entrepreneurs getting their new companies off the ground and into the hands of early adopters.
I took a look at two different successful crowdfunding campaigns: one for the Hidrate Spark Smart Water Bottle which concluded with over $627,000 in funding on Kickstarter and one for Ample Meal: Optimal Nutrition In 1 Minute which is currently live and raised over $70,000 in its first two days and over $92,000 total thus far. Using these two case studies, here's 5 strategies you can use if you're crowdfunding to beat your goals in a matter of days.
1. Gain the support of an accelerator, investors, or both before launching a campaign.
Hidrate is an alum of Techstars Boulder, while Ample Meal is currently finishing its time in the current San Francisco-based 500 Startups batch. Both companies received angel funding and went through one of the top three accelerators in tech before deciding to launch their crowdfunding campaigns. This helps for many reasons, including social proof of their ability to deliver on time, as well as connections to press, early backers, and influencers who can help the campaign succeed. Rather unfairly, companies like Hidrate and Ample that go through prestigious accelerators end up performing best because they take the entire campaign more seriously and with the proper mentorship needed to scale the success of any launch.
2. Customer Development.
Connor Young, CEO of Ample Foods, Inc. knows exactly for whom he is developing Ample Meal. As a former CrossFit gym owner and startup entrepreneur who has lived in personal development breeding grounds like hacker houses, he has been able to create all the copy, design, and presentation of Ample during his campaign to speak directly to ideal customers, be they other gym owners who wish to buy his product in bulk and resell it at a markup, young professionals who bought the similarly-pitched Soylent but wish for a healthier and more optimal option, or biohacking nerds who enjoy experimenting with their diet. Similarly, Hidrate went through an entireTechstars-led week of customer interviews, brainstorming, and watching live users use their prototypes to determine the messaging, perks, and emotional heartstrings of their campaign. Customer development allowed each campaign to speak directly to the niche of customers they are trying to serve in a high-converting way.
3. Stretch goals
Part of why both of these campaigns are and/or were successful is their strategic use of stretch goals. For Hidrate, this meant unlocking new perks ranging from different colors for their water bottles that were not previously available to new app updates. These stretch goals both entice current backers to increase their engagement and support during a crowdfunding campaign while increasing momentum by making for an additional story to share with press and social media. For Ample, it looks like they have not yet announced their stretch goals, but should be doing so any day now in order to capitalize on this strategy that is utilized by most successful crowdfunding campaigns.
4. Valuable high-priced perks.
Having highly valuable and high-priced perks can allow a campaign to rake in serious support in a short amount of time. If you take a look at Ample, more than 75% of the $70,000 they were able to raise in their first two days (and $85,000 in their first week) came from the sale of "Lifetime" supplies. To date, $69,000 of Ample has been sold to 14 backers of these perks, which is almost three quarters of their total support. Not only that, but this is scalable should Ample be able to find out exactly how to cater to these types of customers and attract them as backers in the remaining few weeks of their campaign. It is a big reason why they beat their original
5. Developing Community.
Crowdfunding campaigns that are able to convert backers into community members who stand behind a company can tap into the real support of the "crowd" that comes with crowdfunding. Not only have these initial backers pledged their financial support to you, but in order to see you succeed, they will be willing to share your campaign on social media, recruit other friends to get involved, and develop your messaging in partnership with you if you develop a platform in which they can do so. For Ample, this meant creating a private Facebook group for all backers in order to connect them to one another and continue the conversation around the campaign. For Hidrate, developing an app that connected users of their product converted community in an effective manner while adding more value to the initial offering. Either way, developing community is the best way to tap into the true power of crowdfunding.
Crowdfunding can be a great way to bootstrap your company in its early days while creating a community of early adopters to learn from that will support and amplify your work. Using the case studies of the two campaigns mentioned above, you can apply these five strategies to your current or future campaigns to beat your crowdfunding goals in a matter of days.