Crowdfunding Campaigns Part 2: Running
on Feb. 25, 2014, 11:50 a.m.
Okay, so you have your plans all set, you have your product mostly done and you have a crowdfunding profile all written up. The next thing to do is run the crowdfunding campaign itself. Welcome to 30 days of work (assuming a standard run of 30 days for the campaign).
All things being equal, though, this step of crowdfunding is a lot more straightforward than the planning stage, but it still has its pitfalls. Some things to keep in mind include:
- You will have spent a long time going over every word of your profile, making sure everything is correct and that all the information is there. Understand, however, that not everyone is going to read so closely - after all, they're likely a lot less invested in your project than you are. So prepare yourself for some questions that have obvious answers on your profile. Just smile, answer the question and ask yourself if you can make the answer more obvious for the future.
- People are going to cancel their pledges. In any crowdfunding campaign of a significant size it's going to happen sometimes. Some people change their minds. Some people realize they don't have the finances they thought they did. Checking the profile during a campaign can be addictive, and seeing that your pledge total went down is a bit of an emotional letdown. Don't get too hung up on why people are canceling, unless you're getting consistent feedback point to a reason on your end.
- Part of the appeal of crowdfunding campaigns is that they are more personal than standard retail purchases. Backers get to see the developers talk about their products, get to interact with them and ask them questions and get to make an impact. Don't undersell the personal appeal. And listen to backers, their opinions make or break the project.
- Many backers also expect frequent updates and feedback on the state of the campaign. This shows them that the developers are invested in their product, and listening to feedback. I recommend making an update or two a week during a campaign. This rate if updates can slow down after the funding period ends.
- Most campaigns will have a burst of pledges early. This will cause various crowdfunding trackers like KickTraq or KickSpy to project trending numbers far above what they will likely actually be. So don't get carried away with too-high expectations early in the campaign. Most campaigns are going to slow down significantly over the second and third weeks. Be realistic.
- Similarly, most campaigns get a second wind of backers at the very end. Don't lose hope in the third week when pledges have slowed down to a trickle. It's best to watch several campaigns on the trackers beforehand and get a feel for the typical changes in pace of funding over the course of a campaign, this way you can have informed expectations.
- Even the best made cost estimates are not going to survive the funding period fully intact. I highly recommend regularly taking stock of your individual pledges, estimating the cost they will take to fulfill and the among you've been pledged. Don't forget to take into account the cut that Kickstarter/Amazon will take, and don't forget to leave yourself a buffer - some things will cost more than estimated.
- Use these real world estimates when setting stretch goals. This way you don't over promise. Also remember that hitting a stretch goal means you have more money to work with, but it also means you have more costs because you have more pledges to fulfill. This can often mean you have deceptively little extra money to work with, depending on your costs.
- When allowing add-ons to pledges you won’t often know exactly how many add-ons are chosen until the end of the campaign, when backers fill out their surveys. This means you won’t have an accurate estimate how many you’ll need to produce. Keep this in mind when pricing your costs for them.
All in all, running this part of the campaign is a lot of logistics work, coupled with customer relations and on-the-fly planning. You have to roll with the punches and do the best you can to reign in your expectations. When it's all done you'll hopefully have your funding. Then it's time to move on to an even more difficult part of the crowdfunding: fulfilling all the pledges in a timely manner. And that will be covered in a future post.