Interest in crowdfunding has been on the rise in recent years, and in the last couple of months we’ve seen two major crowdfunding milestones boosting its appeal even further. First, President Obama signed the JOBS Act, effectively legalising equity crowdfunding in the US. Second, a single project raised, through crowdfunding alone, over US$10 million. With new projects being added to Sponsume everyday, we thought it would be interesting to interview users whose projects made it to Sponsume’s Hall of Fame, and share with the readers the lessons drawn from these highly successful crowdfunding campaigns.
We interviewed Steve Bryne of Hamish Henderson Archive, a project which raised a whopping 234% of the target goal (and a total of £4,670) on Sponsume; Axelle Carolyn whose project, The Halloween Kid, raised £7,347, 184% of the target; and Elly Condron of Go Traviata, which raised £6,000 (£1,000 more than targeted). Below we present some of the pearls of wisdom that Steve, Axelle and Elly accepted to share with us, alongside some general advice from past experience.
1. Nobody’s going to throw money at you!
If you browse through Sponsume’s archive and look close enough, you will find a few projects that raised a grand total of... £0. The creators were under the misconception that it is sufficient to set up a campaign page and launch it and the funds will roll in. Well, crowdfunding doesn’t work that way. Believe it or not, very few people wake up in the morning asking themselves who they are going to give some of their hard-earned money to. Your project will not be discovered and will raise little unless you’re willing to put in time and effort.
According to Steve Byrne the biggest misconception people have about crowdfunding is that “if you put a project up, people will find you and give just like that. I’ve seen many projects be launched and then sit stagnating, because the person hasn’t done their background work, hasn’t built up an existing network, and expects the money to roll in, without being on top of the project every day to make sure it keeps cutting through the clamour of everyone’s daily data overload.”
Before reading on, you need to accept that running a campaign is demanding and needs a lot of hard work. However, that shouldn’t discourage you - if you’re willing to put in the effort, crowdfunding can be a fantastic way to raise the funds you need to bring your idea to life.
2. Do your prep work
Now that we’ve established that preparing your campaign doesn’t boil down to producing a compelling video and writing a great biography (which are of course still vital parts of a campaign), let’s look into what else you should do. Try the following thought exercise: imagine that you launch a 30 day campaign on Sponsume. What do you do right after the campaign goes live on the site? What do you do on the following day? And the day after that?
When preparing your campaign you should lay down the infrastructure that will make your project a success after it’s launched.
Build your fan base
One key element of your prep work is building an audience you can address once the project is published on Sponsume. Byrne clearly states “Our success lay in having a strong group of interested people which we had cultivated for a significant period via our Facebook page prior to launching our project.” He goes on to say “a creator should avoid launching a project without doing groundwork first to build up a constituency of interested parties.” Byrne’s project aimed to secure the future of Hamish Henderson’s archive (a well-known public figure in Scottish folk music circles), so his project’s target audience was well defined and indeed he and his partners managed to build up a good number of followers on social networks.
The Halloween Kid’s target audience was a bit different to Byrne’s: horror movie fans. Nonetheless, that project also was a big success. “We were targeting a specific audience, which made it easier.” says creator Axelle Carolyn. “Don’t create your page and just expect it to generate views all by itself. You need a “fan” base to advertise your Sponsume page to. It’s all about using social media in a clever, efficient way.”
Online social networking sites such as Facebook and Twitter as well as dedicated websites, blogs and forums have made it easier than ever to find your target audience and engage it. However don’t rule out doing some actual legwork. Byrne and his companions went to festivals and other events where they expected to meet their target audience, and passed flyers or made announcements about their project. Elly Condron and her colleagues planted posters and flyers in key areas for their target demographic. Once you know who your target audience is and where you can find it - go and meet it there, online or in the real world.
Google your way to online influencers
During the planning stage you should also research and list the websites and blogs frequented by your target audience, and try to form some sort of working relationship with the people behind them. Once your page is live, pitch it to them, show them why your project is of interest to their readers and of value to their site. Another way to drum up interest is to identify the key figures (the influencers) in the sphere you’re targeting and approach them online. Let them know who you are and engage in conversation with them prior to launching your campaign. Twitter is a great way to do so (by looking at their ‘followers’ count you can gauge their reach). According to Greg Vincent, Founder of Sponsume: “one tweet from one of those influencers can have more impact than a full page article in a national newspaper”.
Set up media contacts
Try to find contacts in the media and have them report on your campaign. Make it easy for them to understand what it is and why it’s worth reporting. While shooting for the stars, don’t dismiss local media either. Local press is starved of quality news and many projects have a local dimension that needs to be exploited (e.g. the Hamish Henderson Archive or GO TRAVIATA). It’s easier to get in touch with reporters in the local press, and perhaps your story may give momentum to your campaign on social media.
A common trap project creators fall into is going loud right after launching the campaign and when it is nearing its end, but doing very little in between. Successful project creators keep their foot on the gas pedal throughout the entire project life span. Think of videos, photos, news, milestones or any other new content you can add to your campaign page throughout its entire duration. Plan appealing updates and angles to the story that you can unveil as you go along.
3. Establish trust
Some people may be reluctant to back a project because they’re afraid their money will go to waste - either because they fear you’re going to take their money and run, or because they’re not sure how competent you are to actually execute and deliver on what you promise. You have to be trustworthy and soothe their concerns. The first concern is easier to address - a rule of thumb says that putting your face on the campaign page (best example: appearing in the video pitch) and clearly stating who you are is a great way to alleviate any concerns of a scam. These days, once you put something online it stays there forever, and nobody would want to have the word “scammer” or “fraud” come up when googling his name.
4. Now, what about concerns regarding your competence?
The Hamish Henderson fund has roots spreading as far back in time as 2003, and Byrne had been involved with it for three years prior to setting up the Sponsume campaign. The team behind The Halloween Kid is experienced and accredited. Try looking up Axelle Carolyn (Writer/Director) or Neil Marshall (Producer/Editor) online for example, and not only will you be convinced that they’re perfectly able to bring their project to life, but you’ll also realise they wouldn’t have put their reputation on the line if they weren’t. As Axelle herself puts it: “some think there’s a danger for contributors that they’ll never see their rewards and that the campaign runner will take the money and run. But if a campaign is created through a reputable site, such as Sponsume, and the project is well presented, convincing and run by people you know or have heard of, these risks are really minimal”.
Capitalizing on personal reputation or association to an established institution are just a couple of ways to build trust and credibility. Scan through Sponsume’s successful projects and see the ways in which each project creators managed to reassure backers.
5. Build your dream team
The success stories we’re discussing in this post, as well as many other successful projects on Sponsume, often have a team behind them (but not always). There are a number of advantages to launching a campaign as a group rather than an individual, some of these are:
- Division of labour - Setting up and running a crowdfunding campaign is demanding, and having people share the workload is of great help.
- A greater skillset and plethora of ideas - We can’t be great in all things in life, and forming a team means a variety of skills that can come together to achieve great things.
- Larger networks - More people on board means more friends, fans and followers to appeal to when you’re building your audience.
- Credibility - Remember that ultimately people contribute not because they want the Sponsume campaign to be successful, but because they want the project itself to come to life and be successful. A team is often perceived as more credible than an individual.
6. Get funding early
It took The Hamish Henderson Archive a couple of days to hit its target, and The Halloween Kid only needed three! Securing a large portion of your target early can have a very positive impact on your overall chance of success. A potential backer finding herself on your project page will be more inclined to contribute if she sees that many users have already jumped on board. If things play out well, early contributions can snowball to a massive success.
It’s easy to suggest you should get funding early, but it’s not as hard as you may think. We’ve covered building up your network and fan base - so before launching your campaign try to personally reach out to your more avid supporters (in particular, family and friends you feel are likely to contribute either way at one point or another), and ask them to show their support as the campaign launches on Sponsume.
Here’s a graph showing how The Hamish Henderson Archive campaign progressed over time. You can see it got off to a good start and kept pushing on after the first few days, as we suggested earlier:
7. Engage. Cultivate. Repeat.
Don’t be shy posting about your project multiple times on Facebook and other social networks. With so many of their friends posting their own updates, it’s easy for those who care (or might care) to miss out on your announcements. People forget. You need to keep engaging with your audience and keep cultivating people to take action (don't spam however as spamming is not just wrong but is ultimately self defeating).
Byrne: “you have to...push it [your project] out in as many positive and meaningful ways as you can, without harassing people, to make them want to be a part of it”. He adds “we kept highlighting various incremental targets throughout, via Facebook and Twitter, such as “it’s £980, can we make £1,000 before the day is out!”, or the number of contributors etc. We also used little bite-sized bits of info and photographs relating to our project that kept folks’ interest going. We also updated our video part-way through the campaign, once we had beaten our target, to encourage people to keep giving.”
You should also approach the kind people who have already contributed to your campaign. You can attempt to turn those backers into your campaign’s ambassadors. Ask them to spread the word about your campaign. Keep in mind that people like to belong and enjoy being on a winning team!
All about the money?
There are other reasons and more advantages to using crowdfunding than merely raising funds. Some of these are:
- Validating your idea - Crowdfunding lets you test the validity of your idea by seeing how many people express interest in your project and want to see it materializing.
- Tapping into the wisdom of the crowds - A decent number of backers can help you validate and improve your idea. By communicating with your backers (via the project page’s Comments section or in any other form) you are opening yourself to a plethora of ideas, suggestions and feedback.
- Pre-selling your product - By using the reward vouchers you offer your backers, you can effectively pre-sale your product. Imagine you’re producing a film and know in advance all the tickets for the premiere were sold out!
- Word-of-mouth marketing - Crowdfunding can be seen as a highly cost effective way of reaching a broader audience and getting the word out. It has a galvanising effect on the public that would be difficult to replicate via social media alone.
- Creating your own luck - You never know what’s going to happen if your project picks up speed and the word gets around. Suddenly, opportunities may present themselves. It may be rich sponsors, skillful volunteers, people willing to lend you some expensive equipment, service providers offering heavy discounts for a credit in your film titles, or any other unexpected help that may push your project forward.
I hope this post gives you some things to think about and consider before you launch your Sponsume campaign. There is no magic formula you can replicate and guarantee success. You need to plan ahead and see what works for you and your project.
Please feel free to share your thoughts, comments, and insights from your own crowdfunding experience in the comments. I look forward to hearing from you!