So you want to CROWDFUND?

Markus Sandelin

linkedin.com/in/banton

By now, everyone has heard of crowdfunding.

It’s become a thing. An overnight success and everyone wants to get on board.

Estimations suggest that it will surpass the venture capital industry in 2015.

Just like all other new things, it’s not new at all. You’re just slow to pick up on things.

The history

Back in the 17th century, some old dudes were making books.

Back then, it was really complicated to make books.

So, some old dude came up with the idea of praenumeration.

It only took a century for this to pick up, thanks to the web being really, really slow back then.

Subscriptions became the norm in the 18th century.

One dude once published a series of books and always paid the current one with the next books’ money, until the last book was due to come out.

In 1884, the Americans wanted to put the nice gift from the French to a big pedestal, but had no money.

Then this dude, called Pulitzer, used his newspaper to ask people for money.

125 thousand Americans responded with an average donation of $1 or less.

Some bands have been doing it on the web since the mid-90s and one guy even got financing for his movie before Y2K.

The first platform for crowdfunding, ArtistShare, came out in 2003 and more followed. They were mostly for music and art.

Today’s big boys started not too long ago, Indiegogo in 2008, Kickstarter in 2009.

In 2010, there were 283 platforms of crowdfunding. In 2012 that number doubled.

The industry in 2010 was moving around $880 million, in 2015 it is estimated to grow to $34 billion.

At the end of 2014, crowdfunding had added 270,000 jobs and injected more than $65 billion into the global economy.

It even allowed artists to earn something.

The largest crowdfunding campaign ever, video game Star Citizen, has raised more than $92 million.

But what crowd funding really is pre-selling your stuff or ideas. Mostly stuff, as people don’t want to pay for ideas.

The recipe for a successful campaign

So you have a sweet product or an idea you want to bring to life?

There are a few things to take into consideration.

On average, 37% of projects succeed to source funding.

People from 24 to 35 years are most probable to back a project. Over 45? Lost cause.

Men are more likely to risk their money on a project.

It also increases the investment potential if the backer earns a $100,000 or more per year.

So, if we’re talking about 23-45 year old rich dudes. Guess what type of projects get funded most?

Yes, you’re right. Toys

and games.

I’ve been pre-buying toys and games for about 5 years now.

Thanks to the awesome power of statistics, we have deducted some basic rules of success.

10 steps for glory

1. Have a product people can afford

The sweet spot for a successful price is around $20-$70.

Products in this price range allows easy perk addition in customisation, exclusivity and quantity.

2. Don’t make your

campaign too long

The most (30.7%) of successful campaigns last between 30 to 39 days.

3. Keep your campaign active

Doing regular updates for your campaign increases your success rate by 126%.

4. Start strong, finish strong

42% of campaign funds come in the first and last 3 days of the campaign.

Plan to maintain mid-campaign momentum.

5. Plan for the whole campaign duration

Create a daily marketing plan for your campaign.

Adding new perks after launching the campaign will increase your success rate greatly.

Adding less than four perks after launch greatly decreases your success rate.

Having a day-to-day marketing plan increases incoming money by 180% compared to haphazard fuckery.

6. Don’t do it alone

Campaigns with teams succeed three times more likely and make 38% more money.

7. Do a video

A personal video describing your campaign will make, on average 4 times as much money as one without.

FOUR TIMES

Having a video also doubles your chance of succeeding with your campaign.

8. Don’t over-reach

Since there are so many projects making millions, why shouldn’t you?

If you get past the 40% goal, people will stay 31% longer and back 22% more likely.

You can always expand.

In fact, 78% of campaigns that reach their funding will raise more than their target.

A guy asked for $10 to make a bowl of potato salad. He got $55,492.

9. Share, share, share

Average successful campaign has only 193 likes and 57 tweets, so it’s important to keep sharing

On average, e-mails convert at 53% making them superior to any other form of sharing.

The number of Facebook followers help a lot as well, 10 followers put you at 9%, 100 at 20% and 1000 followers take you over the average at 40%.

10. Profit

11. You’re just getting started

Fail or succeed, you have to handle it well.

So, remember, if you want to succeed, you should have all of these:

A video, a tone-of-voice, a listed product name, a project icon, graphics, logos, customer service, a prototype, an accurate price, photos and a marketing strategy.

Thank you!

Markus Sandelin

linkedin.com/in/banton