Crowdfunding may be the most influential marketing campaign you ever do.
In order to crowdfund successfully, you have tell people that not only do you exist but that you have something they may well be interested in. Traditionally marketing was about shouting out to a huge audience in the hope that at least some people may listen. But now, with social media becoming more and more sophisticated targeted marketing with a reward can reach exactly the right people.
However, that is working under the assumption that people want what you are offering. So, before you start on your crowdfunding journey ask yourselves the following things:
What makes your idea/ product/ service so different from anybody elses?
Who is going to want it? Are they a future customer? What do they look like? What brands do they like? What is their name? Do they have any children? Don’t fall into the mistake of ‘everybody’. Though you may truly believe that everybody could benefit from your product/ service or idea – focus on either one or two ‘ideal customers’ to begin with.
Now get into that persona’s head – and think about how they might think about your product. What messages might they want to hear? Do they want to hear about trust, reliability, pricing?
Now, what will help them to truly care about what you are producing, and not only care but actually put their hands into their pocket?
Though intensive, a crowdfund will not only help you to identify your customers, it helps you to identify with your customers and vice versa. That can only be a positive thing and one that can sustain your growth in the longer term.
While we wish every great idea that turns to crowdfundng reaches it’s target, the reality is that you probably won’t hit your target. On kickstarter it’s only around 40% of projects that become fully funded and on Indiegogo the rate goes down to only 13.68%! (on the flexible funding option)
In our experience the key factor has been peoples lack of capacity. They simply don’t have the man power to have at least three people or around 15 hours to devote to working on the campaign every single day. Crowdfunding is not a last minute ditch to make some quick cash. It all comes down to your level of preparation, 3-4 months should put you in the right frame. During that time try and increase your social media presence but make sure it’s an engaged following where people and chatting, commenting and liking.
So here are some tips.
On launch day already have 10%.
2/3 of the way in have something new to say/ new angle
Your rewards have to entice and be worth the value your putting on them as well as relevant and of course fun names help!
Have a capacity of at least 15 hours per day to spend on the Crowdfund
In the articles I’ve linked to below they contribute the success to;
- making sure you have a video- people like to see who’s behind the great idea for trust and reassurance
- Your social media presence pre launch- they showed that the number of your facebook friends is related to the success rates
- To try and get featured on the homepage- though this is pretty much up to the platform to decide
- Setting your campaign to be 30 days not 60- You’ll get tired and bored just like your fans/customers
For more stats head to http://www.indiewire.com/article/indiewire-compares-crowdfunding-platform-success-rates or http://www.appsblogger.com/behind-kickstarter-crowdfunding-stats/ .
L should always be for Love!
It defeats evil on a regular basis, has the majority of songs dedicated to it and if you’re lucky its what gets you up in the morning ( your love for your job that is). In crowdfunding there’s a lot of love, you’ve got to love the product/service your pitching and getting other people to love it too. People want to believe that what you are going to do with their cash is going to make a tangible difference to their world and they need to see the passion and conviction from you that will then lead them to connect emotionally with you and they will naturally want to help you out. It’s what gets them to dig their hands in their pockets.
It’s pretty tough trying to fake love so if you’re not being authentic you’re going to have an uphill battle on your hands. And if you don’t believe in what your doing you’re certainly not going to convince anyone else.
Plus if you’ve got these peoples love then you have to take care of it, to turn it into loyalty (another appropriate L word). You might want to do another crowdfund in the future and if you have used their money and not thanked them for it or shown them what you’ve been able to achieve with it they are unlikely to feel like giving you more. Brewdog are currently on their third equity crowdfund and they couldn’t have done it without an extremely loyal fan-base they’ve nurtured.
The Glasgow Chambers of Commerce recognised the emerging trend of businesses turning to the crowd for funding and wanted to know what the scene was like in Scotland.
At the end of June 2013 the GCC received the hotly awaited report by Twintangibles detailing the crowdfunding market in Scotland.
What was a little surprising was the massive under-utilisation of Crowdfunding in Scotland. In the UK, crowdfunding was worth £200m and so if you were to take 8% of that- as Scotland is 8% of the UK population- you would expect to see about £16m being raised. However there is less than £1m being funded this way. In looking for reasons of this Twintangibles left this open to speculation.
Why aren’t there more platforms and money being raised in Scotland?
Well Scotland is starting its own platform crowd. We have the recently released SquareKnot that is a really flexible platform allowing businesses to choose between a combination of equity,reward based and peer to peer crowdfunding. Then there is reward platform Bloom VC which launched back in 2011 just after our own platform launch (please click here to read further). Next month will see the launch of ShareIn, an equity-based platform based in Edinburgh focusing on tech and bio-tech.
If we look across the water to the more high profile campaigns by Obama, Veronica Mars, Zach Braffs and Smosh they have allowed crowdfunding to become more commonplace in America. Whereas in Scotland the highest profile campaign we have is BrewDog and their excellent Equity for Punks campaign -although strictly speaking that was a public IPO.
It will be interesting to watch out for further research in this area as it could be a number of things- Are Scots just wary? Do we have smaller disposable incomes in the first place? Have they not come across a campaign that moved them? Is it a cultural thing that we’re a bit more reluctant to donate to business?
There are many possible reasons it could be but crowdfunding seems here to stay and as many organisations that hand out grants are looking for innovative ways to fund raise and banks can see it as proving a product or venture has real consumer potential, small businesses need to start getting in touch with the motivations of their customers or else they will be missing out on some serious cash.
This is a great Ted talk by Brian Solis – who you might remember from a previous post on the Conversation Prism. It looks at how technology, in particular social media is affecting capitalism and suggests a Generation C. What’s your relationship with customers like? He advocates that business is not so much business to consumer or business to business but people to people.
Our friends who make fabulously nutritious pizzas have asked for our help with an idea of theirs. They desperately need a new van to keep up with demand at events for their pizza’s and to be able to go to new events. They thought crowdfunding would be a great way to help them reach their goals, so we have helped them prepare everything that they will need prior to their launch last week.
Whilst they have featured in the TV series The Entrepreneurs, that showed the ups and downs of getting their product to the wider market, and won many awards such as The Scottish EDGE, Best New Product and have also been acknowledged as a business with the highest impact, yet they still face tough challenges. As their blog shows they have had a particularly bumpy ride with their past sampling vans.
Like any crowdfund, there are several challenges faced and the key here is ensuring the tone of voice is appropriate. This is a highly visible start-up and they have their products in several supermarkets. However, they are still a start-up, and finding smaller amounts of funds for new projects is a massive challenge. Remember Nucoco? We crowdfunded £12,000 for their branding and packaging for the same reasons.
SoLoCo have helped with their campaign strategy, rewards and social media strategy up until the launch. Eat Balanced have taken it on from there, and I think they have hit exactly the right tone of voice, producing fun imagery to show what the funds can buy. It won’t be easy, but it is one to watch. I wish them well!
If you would like to support them and get your name on their new van – or spend a day with the Eat Balanced team and Professor Lean tasting pizzas, click here.
What’s under your feet? Could you be living above an undiscovered Roman settlement?
Archaeology Scotland are celebrating an important time in their calendar- Scottish Archaeology Month- and to kick it off they are planing a dig of national significance. The residents of Fairmilehead are being asked to explore a square metre of their gardens to dig for evidence of Roman habitation. Due to conflicting historical maps a group of archaeologists believe that a temporary Roman Settlement could have set up camp in this area. These findings would fill in the missing piece of a trail of roman settlements found across lowland Scotland.
The dig is mostly funded by the Heritage Lottery Fund but for Archaeology Scotland to really do everything they want for the weekend they need to raise an additional £1500. SoLoCo is helping by giving them the tools and knowledge they will need to engage with their existing membership as well as by reaching out to new members to explore community archaeology; skilling up people interested in the past with the know-how to find hidden treasures in their own back garden, without needing a huge team of archaeologists behind them.
Contributors to the Roman Quest weekend will be taught how to dig and identify remains, they will also be invited to the end of weekend party and will get the chance to see what has been discovered and what those findings mean. And for those who fund £150 they can participate in a private dig with a Roman historian at their side.
The more households who can participate, the more information they can gather for the archaeologists and historians. If you live in that area, or know someone who does and want to join in then please contact Dianne Laing at Archaeology Scotland.
If you would like to contribute to the fund and join the after dig party, just click here!
If your stuck on which crowdfunding platform to choose, the UK Crowdfunding Association (UKCFA) was established in 2012 and has a voluntary code of practice so you can be assured that your money is safe. They go beyond the rules imposed on them by the financial authorities and it gives you more piece of mind as it’s designed to protect those participating in crowdfunding. Members even allow you to have a cooling off period if you decide your donation was misspent.
There are 12 founding members but Trillion Fund have some great youtube videos explaining who they are and the different types of investment available for crowdfunds- the difference between donation, loan and equity. Here is a wonderful video on what crowdfunding is.
Each founding member has a slightly different target market so they can harmoniously work together in this national association;
– Is focused on renewable energy projects.
Bank to the Future
– Raise finance not just by donation/reward/P2P/Equity but a combination of these methods.
-Specialises in social venture crowdfunds.
– Innovative crowdfund platform that began from a story about an egg.
– Is an equity only platform.
– Utilises a reward based crowdfund platform to also call for peoples time and skills.
– Equity based platform for social and environmental businesses.
– A not-for-profit investment platform.
– Specifically for game developers.
– Best for start-ups.
– Connects individuals to existing companies for investment.
– For educational fundraising.
-Renewable energy focused in supplying low carbon energy projects.