Crowdfunding is becoming ubiquitous and success stories like the Coolest Cooler, Pebble, or An Hour of Code for Every Student impressively demonstrate how this new wave of funding for startups, creative ideas, and causes via the crowd can be used to turn dreams into reality. Undoubtedly the most successful crowdfunding campaign of all time, Star Citizen has raised over $88 million dollars at the time of writing this post and shows no signs of slowing down.
Crowdfunding is democratizing access to capital and with all the encouraging news stories, who wouldn’t want to launch a crowdfunding campaign today to fund the next big thing the world has been waiting for? How much easier does it get?
The flip side is that for every successful Kickstarter campaign, two fail and in the case of Indiegogo it gets worse: About 9 out of 10 Indiegogo campaigns fail to reach their goal.
The biggest difference between Kickstarter and Indiegogo is that Indiegogo will allow people to raise money for virtually anything, while Kickstarter is a much more restrictive platform when it comes to funding models offered and the types of projects it accepts. Kickstarter’s single funding model is “All or nothing” which means campaigns that do not meet or exceed their goal get nothing. This approach seems to attract higher quality campaigns than Indiegogo’s “Keep whatever you raise for whatever you want” model.
What the media doesn’t cover is how much work actually goes into running a successful crowdfunding campaign and how crucial the pre-launch preparations are. Oftentimes, a false sense is created, suggesting that choosing a popular platform like Kickstarter or Indiegogo is all it takes. I’ve talked to many crowd funders whose biggest worry seemed to be their choice of platform, whereas there are many more important decisions to be made.
On average 9 out of 10 contributions to your crowdfunding campaign will come from your own efforts. The rest is traffic from the platform to your campaign page which only makes up about 10%. This means that the remaining 90% need to come from a carefully planned and executed plan of action on your part, regardless of which platform you decide to use.
Think of your project as a satellite and your crowdfunding campaign as the rocket that will take your satellite to where it needs to be so it can do its job. Now, before you press that launch button to ignite tons of liquid nitrogen to shoot your satellite into orbit, you will want to carefully plan and test in advance, so that the trajectory of the rocket and all other intricate details are in place, allowing your satellite to be successfully transported into space. You only have one shot, if you burn the fuel and the rocket misses its target and your satellite isn’t deployed, you’ll have to start all over again.
The point (and #1 reason why campaigns fail) is that it is pretty much impossible to make improvements or compensate for the lack of preparation once your campaign has launched. Success in crowdfunding is in preparation. Don’t let excitement get the better of you and don’t launch before you are ready or you’ll skip important steps to success.