(Source: Shopify) ultimate guide to crowdfunding by petaahoo

CHAPTER 1

Introduction

You need capital to start a business. How do you get the funds to buy inventory, launch a marketing campaign, and set up shop? In the last few centuries, businesses have nearly always relied on their immediate networks. Funders may include an uncle, a noble, or a local bank. There are few alternatives for those without a big pile of cash. Things started to change a few years ago. Entrepreneurs and artists started to receive funding in small amounts from a great number of people often outside of their network. Instead of getting one large loan from a bank officer, entrepreneurs solicit the funding directly from the public, in large part from people whom they do not know. As a result, you may see something like 1000 people giving $30 each instead of a $30,000 loan from a single bank officer. This is called crowdfunding. Think of it as a â&#x20AC;&#x153;Pennies from Manyâ&#x20AC;? model. Projects are typically funded on crowdfunding platforms, the two most popular being Indiegogo and Kickstarter. Each platform operates sets different rules. Some allow you to keep all the money you raise, while others will only give you the money if your project is fully funded; some are pre-dominantly focused on creative projects and business ideas, while others are more suited for personal ventures.

In short, digestible chapters, this guide helps you to plan out which platform to launch on, create the best campaign page you can, and plan the transition to an enduring business.

Crowdfunding for Your Projects, and Interviews with Success Stories First we discuss the sorts of businesses and products that are particularly suited for crowdfunding. We share case studies of the most successful products launched by crowdfunding, and feature in-depth interviews with four successful businesses to get their insights on how to build a good campaign, how they engage with their audience, and how theyâ&#x20AC;&#x2122;ve kept the momentum going in their business. First, Bill Trammel of Catan Boards, which raised $361K, over 1400% of its $25K goal to produce designer Catan boards. Second, Mariquel Waingarten of Hickies, which raised $159K, over 600% of its $25K goal to produce specialty laces. Third, NOMAD, which ran successful campaigns on both Indiegogo ($172K of a $50,000 goal) and Kickstarter ($162K of a $50,000 goal). And finally, Flow Hive: Indiegogoâ&#x20AC;&#x2122;s most successful funded project with $5.3 million in pledges.

Our Guide to Crowdfunding Our guide begins with an introduction to crowdfunding, which includes a guide on how to build the foundations for an enduring business. Then it gives an overview of the different platforms, featuring especially Kickstarter and Indiegogo, and compares different platforms in a table. Each of these platforms each have different fees, funding models, and audiences; each platform makes more sense for certain projects more than others.

How to Optimize Your Campaign Crowdfunding is hard, and certainly a great deal requires luck. But there is a science and a method behind most successful projects. We take a purely empirical approach to show you how to optimize your video, landing page, rewards, and the optimal length of time for your campaign. Instead of citing other resources to tell you how to optimize, say, your video, we offer advice directly from Kickstarter and Indiegogo, and present raw data on videos of the most-funded projects from both Kickstarter and Indiegogo. We hope you find this useful. CHAPTER 2

The Benefits of Crowdfunding

March, 2014 was a big month for crowdfunding and for crowdfunded products. In the beginning of the month, Kickstarter announced its one $1 billionth pledge. 5.7 million people have backed around 130,000 creative projects on Kickstarter. In mid-March, the major feature film Veronica Mars was released in theaters, after 91,000 backers provided $5.7 million to help support production costs. And later in the month, Oculus Rift, a virtual reality display, was acquired by Facebook for $2 billion dollars. It had completed its crowdfunding campaign for $2.4 million in September, 2012. By now all of us have heard of something cool about crowdfunding. Perhaps you know that since 2010 crowdfunding has contributed more funds to artists than the National Endowment for the Arts did. Or you may know instead the projects funded on various platforms: the Nikola Tesla Museum, for example, or the Pebble Watch. Perhaps you’ve contributed to help a personal cause, like the bus monitor who was bullied, or for the recovery after Hurricane Sandy. Maybe you’ve heard of the most ambitious crowdfunding project ever: the Ubuntu Edge phone, which aimed to raise $32 million on Indiegogo, and which ultimately reached $19 million in funding. There’s a good chance that you’ve seen a movie, listened to an album, or played a game that was made possible by crowdfunding. Crowdfunding can be used to great success to bring to life artistic projects, products for sale, and personal ventures like fixing up a restaurant or hosting a special party. There are especially interesting possibilities for entrepreneurs to launch products with crowdfunding.

Why Crowdfund? The benefits of crowdfunding a product are many. The most important include: Getting a following Done properly, crowdfunding gives you not only the capital you need to start your business on a sound footing, but also an already-committed audience who have stuck through thick-and-thin with you from the very beginning. You’re also likely to get followers on social media as well as online coverage. Few other businesses can claim to have a dedicated following before they sell their first product. Getting funding without going into debt Don’t forget of course the fact that you’re going to get funding from your fans who may be anywhere in the world. Got a great product idea or artistic project for people with similar interests? You need not go to your local Chase branch, hat in hand, asking whether you could possibly receive a loan to start selling online. Instead, you’d be connecting to people like you in places like Norway and New Zealand. And even if your project fails to sufficiently take off, you still may benefit in another way. Getting market research We don’t mean only the experience you’ll get running a campaign or engaging on social media, though both are useful skills. Crowdfunding is a relatively cheap way to conduct market research. Crowdfunding is very useful as a way to reduce business risks. Say you have come up with a product that you think is going to sell. When would you like to know that you’re wrong: After you’ve built the buzz, contracted out the manufacturing, and started taking orders; or after you’ve built a page on Indiegogo and found that people just aren’t that interested? Crowdfunding is a great way to test the market, to figure out whether the product you want to sell really has potential. You’re going out directly to your fans and customers to see if anyone is willing to pay for a great idea. Do you see now why we’re excited about crowdfunding? Keep reading to find our recommendations for picking products and for running a good campaign. CHAPTER 3

What Can I Crowdfund?

You’ve read about what it means to be successful. Now it’s time to consider whether you have a good product. The Pennies from Many model doesn’t imply that you’ll get a lot of pennies. While crowdfunding is a terrific way to fund a product, you shouldn’t believe that strangers will be throwing lots of money at you just for having a campaign. We crunched some numbers, collected from the Kickstarter’s statistics page in August, 2014: 57.61% of all 159,054 projects on Kickstarter have gone unfunded. Of all unsuccessful projects, 74,597, or 46.90%, were not able to surpass 20% of total funding requested. 16,191 projects, or about 10% of all projects, were not able to attract a single dollar in pledges – they raised precisely $0. Sixteen thousand people couldn’t get their mom to kick in a single dollar. We’d like for that not to happen to you. And even when you’re fully funded, you can still fail by not developing the product with the funds you have. If you’re persistently late or don’t deliver, then your community can turn; at that point you’ll have not fans but haters. Certain founders have faced threats and harassment after they kept missing their own deadlines for delivering rewards. Finally, you can’t forget that crowdfunding is only the first step. You’re trying to build a business, and crowdfunding is supposed to be a substitute for a loan. Running a successful campaign is a means to the end of creating an enduring business.

Crowdfunding is no cakewalk. It’s not just uncertain not just on Kickstarter; no other platform is quite as transparent as Kickstarter, and it is by most accounts the platform with the highest rates of success. But don’t be afraid. It’s not all a matter of luck. The skill of running a campaign can be mastered. You’ve just got to pick the right product.

What kinds of products work best for crowdfunding? Picking the right product to crowdfund is the most important part of the crowdfunding campaign. And the most important part of picking the right product is finding something that deeply appeals to a particular audience. First of all, you should be crowdfunding for a specific product, not to start a store selling many products. There’s a reason that you only find products, not stores launched on the biggest crowdfunding platforms. People want to back tangible products, not a cool idea for a company. If you want to get your business started with crowdfunding, then you have to campaign with your best product, be it a toy, an electronic, or a craft. You may try to build a store for related products later, but you should only branch out after your product has really taken off. You should also be targeting your product towards a particular community. Think about it. A great deal of the appeal of crowdfunding is being connected directly by the users who will eventually become your customers. You’re bypassing the local bank to reach users directly because the bank doesn’t understand the product and the number of people who want the product. But in order for there to be fans in the first place, your product has to be something that they can’t pick up at Walmart, and not easily found online. There has to be a community that craves your product for a problem that’s not being solved right now. If there’s no dedicated community for a product, then there’s no deep reservoir of revenue to really tap into. There are lots of communities that you can target. Think in terms of niches: perhaps there’s an annoyance plaguing anyone who knits; maybe squash players have a persistent unmet need; air travel is still pretty uncomfortable.

Ideally, it helps if you’re dying to get a product yourself. Chances are, there are people just like you who need exactly the same thing. Go out there to develop the prototype and tap into that need. Special note for those launching with Kickstarter: If you choose to launch on Kickstarter, be aware that its rules are more strict. In order to host a campaign on Kickstarter, you must already have a prototype set up; it does not allow you to feature photorealistic renderings of your product. So if you want to launch on Kickstarter, prototype first.

Inspiration Here are a few products funded by various platforms that tap directly into the needs of a community, just to get you thinking. lüft offers breathable outerwear made with special membranes that’s perfect for skiers. QardioArm is a discrete, stylish device to measure blood pressure. Brydge is a keyboard that turns your iPad into a laptop. ProGauntlet, a swordfighting glove that’s particularly suited for historical European martial arts. FlyKly Smart Wheel is a motored pedal-assist that lets you bike without breaking a sweat. These are pretty zany products, right? Well, they’ve all found their community to reach their funding goals. Don’t you have a great product that you want the world to use? Well, go out to develop a prototype and crowdfund it. Need more inspiration? You can always explore current projects on Indiegogo and Kickstarter to see what’s working out now.

Summary Not everything works to be crowdfunded. The best products are the ones with a community of people who deeply wants it. We discuss in future chapters how to build a campaign around this product, including the importance of prototyping, shooting a video, and creating compelling landing pages. CHAPTER 4

The Importance of Planning

A successful crowdfunding campaign gives your business a remarkable head start. You know for sure that your product has a market; you’ve already got a loyal base of supporters who have trusted you enough to put money before a product is rolled out; you’ve got tremendous experience running marketing; and you’ve obtained funds without compromising on your idea or going into debt. Don’t squander these advantages. Plan ahead properly.

The Campaign As you’ll read in later chapters, the campaign is not something that you can put up overnight. Every successful campaign requires a good video. In a sample of the most successful design and technology projects on Kickstarter and Indiegogo, Shopify has found that the average page has 3500 words of text and 20 high-quality visuals. And don’t forget that you should have a prototype of your page prepared. Three of the four successful project creators that Shopify interviewed reported quitting their previous jobs so that they can put together the campaign page on a full-time basis. None of them took fewer than a month working full-time on their campaign before they launched. Spend time creating your video, your visual assets, and your page. Don’t forget also to spend time deliberating your rewards and your timeline. Luckily, this guide provides guidance on optimizing each of these. We want to make one more addition to something to prepare for before you launch:

Getting press. Successful project creators are nearly unanimous when they tell people that press is important. And you shouldn’t wait until you launch before you start contacting reporters. Instead, you should line up press coverage so that you have articles about you on the day of launch. That’s a strategy that maximizes momentum. Take a look at Chapter 8, which is all about how to reach out to the press.

Don’t Be (Too) Late In an analysis by Kickstarter and the Wharton School of Business, 65% of backers agree with the statement that rewards were delivered on time. However, that same study found that 9% of projects failed to deliver at all. Your supporters aren’t going to be happy if you’re late or never deliver. While Kickstarter discourages funders to think of the platform as a marketplace, most people are still disappointed to see months of delay or a total failure to ship. Some of these reactions can be extreme. One project creator has seen former supporters show up at his home because they’ve been frustrated by persistent delays. Once you have a revolt on your hands, then you’ve squandered your fanbase. These former supporters won’t be silently disappointed; they’ll be quite vocal about it. You’ll soon start hearing public complaints. Pebble Time, Kickstarter’s most-funded project, and Oculus Rift, the company purchased by Facebook for $2 billion, both ran into heavy manufacturing difficulties which resulted in huge delays. If delays can happen to them then it can happen to you. Luckily, funders are often quite forgiving. So you have to do your best to avoid mass disappointment. One way to do so is to make a good plan.

Planning for the Product There are so many things that can go wrong. The most important include not locking down a manufacturing process; underestimating the difficulty of scaling from a prototype; running out of money because of you’ve mis-calculated the costs; and underestimating the success of a campaign, which increases the level of complexity. Every project will be different. It’s impossible for us to give you concrete advice on choosing manufacturers and setting up timeframes, but there are common themes and questions for everyone to consider. Costs: Building 1 unit of your product is different from building 100 units, which is still different from building 10,000 units. A rough rule of thumb offered by Noah Dentzel of

NOMAD is to add up all the units you’re offering as rewards and ask for 5X that for your business; that should approximately be enough to start you off on a firm footing. Asking for a comfortable amount of money improves a great deal your chance of shipping on time. Manufacturer: You need to be communicating with your manufacturer, especially since a great deal of project creators go overseas for manufacturing. A majority of shipping delays are caused by manufacturing delays. There are so many things that can go wrong. A prototype may not be scalable; your design is actually more complicated than the manufacturer thought he could handle; certain materials are actually more difficult to find than you thought; and manufacturers tend towards optimism, just as creators do; language and time differences may be significant obstacles when you’re shipping overseas. And are you sure that your design has been perfected? A frequent piece of advice given by crowdfunding veterans is to create a reasonable timeline, and then double it to get your shipping date. Shipping: There are two aspects of shipping to consider. First, make sure your manufacturer is able to ship to where you are; if this is his first time shipping your country, you should to make sure arrangements are sound before making promises to your supporters. Second, make sure that you yourself are able to ship products en masse to your supporters. Have you selected the right carrier? Have you got a labeling system? Are you sure that everyone is accounted for? There are tools around like BackerKit to help manage fulfilment, but do keep these issues in mind while you make reward levels. There’s almost no such thing as too much planning in a crowdfunding campaign. Before you launch, figure all these things out. Make the disappointment of fans your own, and avoid it by setting more than generous expectations. But if you find yourself running into strong headwinds and must delay, don’t forget one important thing:

Be Transparent About Your Delays Your supporters understand if unexpected things happen. You can’t plan everything. The Apple Lightning Charger was an iPhone charger that was first rendered obsolete by an Apple design change and then forbidden by Apple to be a licensed accessory. Rich Burlew was on his way to finishing up his comic book series when his tendons, nerves, and an artery were sliced in his drawing hand by a shattering glass canister. His hand had to heal before he could draw again. Things happen beyond your control. You need to update your supporters. When you’re honest and transparent about what’s happening with the production process, your supporters are much more likely to remain supporters. The worst is when you blow a deadline amidst long periods of silence. That’s when people start getting suspicious.

Conclusion Delivering a project on time is really hard. Creators naturally tend to be optimists. Supporters, meanwhile, hate missing their products. The solution is to plan as much as you can before you embark on your campaign. If delays do happen, be transparent. CHAPTER 5

Launch a Website Before, Not After

Creators who have succeeded on Kickstarter and Indiegogo agree on one thing: Raising money is the easy part. The hard parts comes afterwards: manufacturing the product, fulfilling your orders, and running a successful business. The last two chapters offered some tools and resources to simplify these tasks and also discussed some ways to transition from a campaign to a durable business. We’ve decided to dedicate an entire chapter to the single most important thing that you can do for a successful campaign: Launching a website during the campaign. If your campaign takes off and gets featured on either Kickstarter or Indiegogo, you’ll have huge numbers of people going to your campaign page, as well as links from social media, blogs, and press. When you’ve set up a page, you’ll get a great deal of positive spillover effects when other websites link to you. Here are three benefits when that happens.

More interest on a platform you control Kickstarter and Indiegogo both have huge numbers of people visiting their sites every day. You should treat your spot on Kickstarter or Indiegogo as way to ultimately bring people over to a platform that you own and control – and that will live on beyond your campaign. There’s only so much that you can have on your campaign page; you’re especially limited if you’re launching on Kickstarter because of the relative inflexibility of the platform. Do you have a distinctive voice that might work as a blog? Do you want people to know the story of your brand, not just your product? Do you have other products already for sale that you want other people to check out? These aren’t things that can be easily fit onto a campaign page, but they’re all very good ways for people to engage with you. Think of it this way: If you have active Twitter and Facebook profiles, you’ll get an influx of followers once your campaign launches. That’s useful for future marketing and engagement. The same logic applies for your website. Not only do you have a chance to get attention, you’re also getting a great head start on building your email list for engagement in the future. Your site will last a lot longer than your campaign page. Ride that wave of attention now and try to capture as much of it as you can on a platform you control.

Higher SEO rankings for later There are hundreds of factors that determine how well you rank in search engine results when people search for a keyword relevant to your business. One of the most important is how many high-quality websites link to you. Media publications and blogs with authoritative page-rank are who you want to target, and links from them will significantly boost your rankings in search engines. Once your campaign on Kickstarter or Indiegogo is over, your campaign page will be useful mostly for branding, and people will have to go to your website to buy your products. So take advantage of buzz your campaign generates to also direct some attention (and links) to your website so you can continue to gerenerate cashflow over the long term, not just the 30 to 60 days of your campaign.

Pre-sales to generate cashflow Cashflow was so important that several of the merchants that Shopify interviewed declared that they had to rely on it to finance the manufacture and fulfillment of their products even when they way surpassed their goals. That’s right: Pre-sales is important because you need all the revenue you can get to manufacture your product, market it, and fulfill the orders of your funders.

There are a variety of places to sell your product easily online to generate cashflow. If you’re interested in owning your own brand and building a store around your product, check out Jumpstart, a theme developed by Shopify that is developed specifically for crowdfunding graduates. Take a look also at Startup, a theme developed by Pixel Union well-designed to sell a small number of products on a single page. CHAPTER 6

13 DIY Tools For Crowdfunding

Noah Dentzel of NOMAD has run two crowdfunding campaigns in two years on two different platforms. His first campaign, on Kickstarter, reached 322% of his funding goal. His second, on Indiegogo, reached even higher. Noah learned a lot the second time around. “It took one-tenth of the effort of our first campaign, in part because of the software that we used,” he said in an interview with Shopify. His favorite two tools that reduced the workload of his second campaign by 90%? BackerKit and Shipstation, featured below. In addition to crowdfunding tools related to fulfillment, we’ve included tools to manage press outreach, simplify social media engagement, and make your visual assets the very best that they can be. Let’s go make your crowdfunding campaign a success.

1. BackerKit

BackerKit is a dashboard that helps you manage fulfilment and communication with funders after your campaign so that you donâ&#x20AC;&#x2122;t need to coordinate everything by email and spreadsheet.

2. Printful

Need a low-tier reward to offer funders? T-shirts are a great and easy way to raise funds. Check out Printful, which offers cheap prices on custom-printed, comfortable shirts.

3. Microphone

Your video is the single most important part of your campaign's landing page. You have to make it good and compelling. Though you don’t necessarily need professional help to create a good video, you should at least make sure that you have appropriate lighting and are shooting with a good camera. Just as importantly, you should have a good microphone; your video is of a much higher quality if there’s no mumbling or extraneous noise. We’ve selected this lapel microphone by Sony for its quality and very affordable price.

4. iMovie

Every video needs to be edited to add new effects, to take away certain parts, and to string together difference scenes. If you have a Mac, use iMovie, which offers a great deal of functionalities. If you’re looking for a slightly more premium editor, consider using the Adobe Premiere Pro CC.

5. Buffer

Social media engagement is critical to the success of a crowdfunding campaign. But it’s a lot more work to be reactive than it is to be pro-active. That’s why we recommend that you schedule out tweets in advance, before your campaign launches. For example, schedule a tweet a week before your campaign closes to let your Twitter followers know that they have only seven more days to contribute. One way to do that is with Buffer, which lets you schedule tweets and Facebook updates well ahead of time while giving you advanced analytics to track the metrics of each tweet.

6. ShipStation

If your products are small then youâ&#x20AC;&#x2122;re probably going to deal a lot with shipping. Shipstationmakes it easier to ship products yourself. It integrates with major carriers, including USPS, FedEx, and UPS, so that you can easily create shipping labels and packing slips in bulk. It offers a great deal of other tools for shipping management as well.

7. Shipwire

If youâ&#x20AC;&#x2122;d like to totally outsource fulfilment, check out Shipwire. Send your inventory to one of its many fulfilment warehouses and it can handle your shipping automatically as orders come in. It will save you the the major hassle of fulfilment.

8. Kickstand by Shopify

One of the best things that you can do to build an enduring business after the campaign is to make sure that you have a website before the campaign. Having a website gives you three important benefits: more interest on a platform that you control, better SEO as a result from links and traffic from Kickstarter and Indiegogo, and the ability to generate cashflow from pre-sales. So check out Kickstand, a theme developed by Shopify that closely mimics your campaign page. Best of all, this theme is free.

9. Digital Tutors

Digital Tutors is the largest creative and tech training library on the web. Take some of the lessons to make sure that you have the fundamentals for good design and for making your product work.

10. Cision

Press outreach is important. If you want to do hardcore reachout, then check out Cision. Itâ&#x20AC;&#x2122;s a media database you can use to get the information of reporters. You can determine a reporterâ&#x20AC;&#x2122;s location, email, phone numbers, social media profiles, areas of

focus. Of course you can always build a free list by searching through Google and Twitter for the people you can reach out to.

11. KeyShot

KeyShot is an easy-to-use and powerful way to create renderings of your products. Make it 3D, create an animation, or turn your pictures photorealistic.

12. Arqspin

If your campaign is on Kickstarter then you know that you have to prototype your product before you launch your campaign. One good way to display your prototype? Using Arqspin to create a 360-degree view to display every aspect of the product. After you buy a spin table, itâ&#x20AC;&#x2122;s about as simple as as taking a video on a camera that you own.

13. GIMP

Again, your product shots need to be great. GIMP is a photo-editing piece of software that doesn’t have all the functionalities of Photoshop, but it’s free. And if you’re running a crowdfunding campaign, then you’ll need every penny you can get. CHAPTER 7

How to Get Press Coverage

Press coverage is one of the most important factors for success for your campaign. It’s also one of the trickiest things to ask for and receive.

Getting coverage from publications and from blogs is the most effective way to receive funding from outside of your network. Here are a few tips and guidelines for reaching out.

1. Reach out before your campaign launches There is no reason to wait until you make your campaign live before you reach out to press. Your campaign is going to do a lot better if it gets strong coverage on the very first day of its launch. When potential funders see your campaign as it just gets going, they think that they’re one of the first people to get into something special; if they see that you haven’t done so well when you’re nearly through your campaign, they may feel more reluctant to back something that hasn’t yet generated momentum. So do the bulk of your reachout before your launch date, and build it into part of the preparation of your campaign. Pitch the bloggers and reporters, and ask them to publish on the day of your launch.

2. Build a big list of contacts, and know who you pitch It’s almost certainly the case that most of the people you reach out to will ignore you. Bloggers, and to a greater extent reporters, get pitched all the time on ideas that they can’t write about or don’t have interest for. That’s a good reason to build a big list of people you may reach out to. You just can’t be sure that a reporter or blogger is as enthusiastic about your idea as you think. Careful, though. Building a big list doesn’t mean that you should include the name of everyone who’s ever written anything. You need a compelling reason for people to cover you, otherwise all you’ll get is wasted effort while adding annoyance to someone’s day. What qualifies as a compelling reason? 

The writer has written previously on other crowdfunding campaigns.



Your product is in exactly the industry that the writer covers.



Your product builds on the writer’s previous coverage.

In your pitch make clear that you have a solid basis for reaching out.

3. Write a compelling pitch

Your pitch should be concise and to-the-point. Tell the reporter or blogger how your product fits in with his beat, say a few cool things about your product, and ask him to cover you when your campaign launches. Try not to waste any sentences. If you can link to your video, include it in the pitch because it’s a better introduction to your product. There may also be a chance that the video gets embedded in the article. Not sure how exactly to finesse everything? Take this template as a starting guide:

How to Pitch Reporters: A Template

Click here to access a template that you can fill in and modify to pitch reporters and bloggers on your crowdfunding campaign.

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Bonus tip: Offer an exclusive If you think that you’ve found the perfect reporter to cover your story, and that the reporter is at a publication that may be hard to place into (for example, Wired or The Wall Street Journal), then offer an exclusive. Offering an exclusive means that the reporter has the first-dibs to cover a story, and in effect “break the news” of your campaign. Every reporter likes to be the first to cover something, and you’d be offering them that right. Of course, you have to make sure that they actually get what you offer. If you offer exclusives to more than one party and more than one take the offer, then you’d sour relationships for the future. Keep in mind that although offering an exclusive could improve your chances of being covered, it also limits your ability to cast a wider net. Make sure that you have reach-out notes ready to go after you’ve locked up an exclusive feature. If you’d like to ask an exclusive, consider adding in this line to your pitch:

Weâ&#x20AC;&#x2122;d like to offer you an exclusive on this story. Our campaign goes live on [launch date] and weâ&#x20AC;&#x2122;re notifying no other publication except yours. Add that enticement to increase the chance of getting covered.

Tools for Getting PR In order to pitch the right journalists, you first need to find them. Here are some tools to help you discover media that cover your industry and connect with them.

Followerwonk

Followerwonk is a tool from the folks at Moz that lets you search people's Twitter bio's (among other things). For example, if you wanted to get covered by TechCrunch, you could search for "techcrunch" and then browse all twitter accounts that contain that keyword in the bio section, sorted by number of followers. Once you have a list, you then want to find which reporters have written about your industry or your competitors in the past, as they will be most likely to cover your story.

Muck Rack

Muck Rack is an easy way to connect with journalists. You can find the right person to pitch by searching keywords, company names, competitors, beats, outlets, media types and more. It also allows you to receive email notifications when journalists tweet or link to articles matching your search terms.

Cision

Cision is a media database that provides information on reporters including: location, email, phone numbers, social media profiles and areas of focus. You can easily generate lists based on verticals or reporter beats, helping you to find the most appropriate targets.

ProfNet

ProfNet connects journalists to sources and vice versa. When a journalist is writing a story and needs an expert source, they submit their inquiry to ProfNet and it then gets distributed to a list of subscribers. Itâ&#x20AC;&#x2122;s a great way to stay informed on current stories that reporters are writing and to be introduced to new targets.

HARO (Help a Reporter Out)

HARO is a service reporters can use to request information for a story. It's similar to ProfNet but since the basic subscription service is free, many reporters get inundated with pitches based on their inquiries. Again, it’s a great way to stay current on any stories that reporters are writing but due to the volume of responses they receive, it is crucial that the pitch provides exactly what they requested. Further reading: 

How to PR Like a Pro: A Guide to Getting Media Attention



How to Get Press for Anything



Deconstructing PR: Advice From A Former VentureBeat Writer CHAPTER 8

A Crowdfunding Checklist

Here's what to do before you launch your campaign: Design and Prototype Your Product 

Create a basic prototype to show prospective contributors that you know what you’re doing. Note that having a prototype is mandatory for launching on Kickstarter. You should also figure out out your shipping and fulfilment strategy. Set Your Funding Goal



A rough rule of thumb is to calculate the costs of everything that you might need, and then double it. Ask for that amount. Film Your Video



Your video is the most compelling way to tell your story. Tell us why the world needs your product, your progress so far, and why you’re the right person to back. Create Visual Assets



Make your page pretty. Give people something to relate to with your pictures and your copy. Launch a Website



You’re going to have a lot links and visitors. Try to grab that attention on a platform you own, for better SEO and to solidify a following.

Set Rewards/Perks Levels 

Set a big range of rewards, from very low levels for people who want to be part of the project, to very high levels for the really dedicated fans. Set the Length of Your Campaign



Your campaign can run between 0 to 60 days. Most successful campaigns are run for between 30 to 40 days. Reach Out to Press



Don’t wait until you launch before you reach out to press. Start the outreach early, so that you have coverage on the day you launch. Hit Publish!



Now go out there and make your dreams a reality.

Crowdfunding Checklist

Use this checklist to check whether your campaign is good to go.

VIEW ON GOOGLE DOCS CHAPTER 9

Kickstarter: Benefits & Drawbacks

There are quite a few major platforms for crowdfunding your product idea. We recommend that you choose between Indiegogo and Kickstarter. The lion’s share of funding is made on these two sites, you’ll find all the features you need between them. Kickstarter and Indiegogo are better platforms relative to the others for several reasons: lower failure rates, more active communities, greater familiarity, and more straightforward payment options. For the sake of simplicity, we recommend that you use these rewards-based platforms rather than jump into equity-based platforms. While equity-based platforms will be available as regulations ease, it remains a fairly complex process. So stick with Kickstarter and Indiegogo. We spend the next two chapters diving deep into their features and their respective merits. In addition we compare all the platforms together in a table so that you can see the differences in features and fees very easily.

The Guide to Kickstarter Kickstarter is known as the “Apple” of crowdfunding: There are more rigorous rules for what can and can’t be posted on to Kickstarter, and therefore the projects that are posted are regarded as of a slightly higher quality. Successful projects funded on Kickstarter include: the Pebble Watch, which raised $10 million; Veronica Mars, $5.7 million; and Oculus Rift, which raised $2.4 million, and was acquired later by Facebook for $2 billion.

Kickstarter or Indiegogo?

Kickstarter positions itself mostly as a community for creative projects. It has explicitly disavowed the claim to be a marketplace with a blog post called: “Kickstarter Is Not a Store.” In spite of its many successfully funded products, Kickstarter still positions itself as a platform for the creative arts first. Perry Chen, one of Kickstarter’s co-founders, has declared: “Kickstarter is about creative projects and art, not investing or shopping.” That’s quite different from the attitude of Indiegogo. Indiegogo prides itself as a neutral platform giving anybody’s ideas a market test, fully embracing the efforts of entrepreneurs. Kickstarter takes projects the extra step to ensure they're set up for success on the platform. Some entrepreneurs like the perceived openess of Indiegogo while others value the project quality focus of Kickstarter. Indiegogo embraces testing out products. Its founder, Danae Ringelmann is proud to say that: “We allow entrepreneurs to prove themselves in a merit-based way.” In fact, Indiegogo allows you to swap in new perks and change required giving levels and is more flexible than Kickstarter in all sorts of ways. In general, Indiegogo has a platform more friendly towards early business ideas, and may be better suited for launching a product. The trade-off is that Kickstarter attracts a higher number of pledges due to its project quality focus. It's also important to take into consideration the category you're launching in as well as the audience you're talking to. Kickstarter is strong in technology, games and the design community while Indiegogo excels in its flexible funding options and campaign guidelines. Still, you won’t go wrong on either platform. Both offer fundamental features and act as ways to drive traffic to new business' sites. In fact, Kickstarter drives 40-75% of new traffic to its campaign's websites. And consider also that Noah Dentzel, who has run campaigns on both Kickstarter and Indiegogo says that both platforms have worked very well for him. So don’t sweat too much about having to choose between either. Their core functions, fees, and pages aren’t significantly different. Still, do your research and figure out which has the better community for your product, and consider whether you have a better chance of being featured as a “Projects We Love” on Kickstarter, or get picked up by Indiegogo’s “Gogofactor.”

Funding Products on Kickstarter Certain areas of Kickstarter are especially robust for product funding. Bill Trammel of Catan Boards did his homework before he launched, and discovered that the gaming community is very active on Kickstarter. At that time, 11 out of the 20 most funded projects on Kickstarter were related to gaming. Recently; however, technology is taking over in terms of money raised. Kickstarter has 15 project categories: Art, Comics, Crafts, Dance, Design, Fashion, Film & Video, Food, Games, Journalism, Music, Photography, Publishing, Technology, and Theater.

Chances are, your product is going to land in Design, which has had $154 million pledged to 2739 projects, or Technology, which has had $137 million pledged to 1389 projects, all figures cited at the time of this writing. These will surely increase and possibly shift in the future.

Fees Kickstarter keeps 5% of total funds raised. A further 3% + $0.20/pledge is paid to Stripe, Kickstarter's payment processing partner. Depending your country and the size of the pledge, these rates can vary slightly. You do not get charged if your campaign does not reach its funding goal.

Kickstarter statistics Here are some numbers from Kickstarter’s Stats page (at the time of this writing). 

About 115,000 projects have been successfully funded on Kickstarter.



Approximately 35% of all projects are funded.



Of all unsuccessful projects, 85%, were not able to surpass 20% of total funding requested

The Kickstarter stats provided offer deeper insight to category success rates based on campaign goals. Use these numbers to inform your efforts. Do projects in your category tend to succeed when raising this much money? Should you focus on repositioning your product within another category for greater possibility for success?

Can your Project be Posted on Kickstarter? Kickstarter is by far the most restrictive platform on projects. Consult this handy guide to check whether your project is likely to get approved. 1. Your project must have a clear end, which means that it must result in a product, experience, event or shop. It can’t help launch an online store selling all sorts of products. And you can’t raise money for causes. For that, you have to go to Generosity, Fundrazr, or GoFundMe. 2. It must fit into one of fifteen categories: Art, Comics, Crafts, Dance, Design, Fashion, Film, Food, Games, Journalism, Music, Photography, Publishing, Technology, or Theater. You won’t be able to use Kickstarter as tuition towards business school or specifically to fund the creation of a company; you have to specify how the funds will go to creating a project.

3. Project creation is available to individuals in US, UK, Canada, Australia, New Zealand, the Netherlands, Denmark, Ireland, Norway, Sweden, Germany, France, Spain, Italy, Austria, Belgium, Switzerland, Luxembourg, Hong Kong, and Singapore. 4. Here are a few no-no’s: no equity financing; no offering rewards not produced by the creator; no funding for websites or apps focused on ecommerce, business, or social networking; no offering alcohol or genetically-modified organisms as a reward; no nutritional supplements. There are other prohibitions, too, though we consider it unlikely that you’ll run into them. Take a look at the Kickstarter guidelines for the full list. 5. Show what work has been done, prototypes and parts, as well as any technical drawings and CAD models. Do not use photorealistic renderings of what you hope the product will look like - these are prohibited. 6. Your product must include a production plan and an estimated timeline. You must also show the progress so far, using for example photos, videos, and sketches.

The Anatomy of a Kickstarter page Here are the things you need to figure out on Kickstarter. Remember, there’s no such thing as overplanning these things. Bill Trammel of Catan Boards spent a whole month full-time building his campaign page. You should give especially careful thought to your rewards, to how you’ll fulfill, and how much to ask for. See our advice later for how to optimize each. 1. Make a video A video is technically optional, but if you want your campaign to succeed, you should definitely have one and it should be good. 2. Create rewards People pledge not only to support an idea, but also to receive rewards. You can create different tiers and offer different goods at each tier. 3. Set a goal Kickstarter is an all-or-nothing model, which means that either you receive at least all the funding you request for, or you receive nothing at all. You get nothing even if you’re 95% funded. Figure out how much to price based on the amount required to make an initial capital investment, on fulfilment for your rewards, and for establishing future cash flow. 4. Make a timeline

Your campaign can last from 1 to 60 days. 5. Thumbnail A small picture that directs people to your campaign page. 6. Product image and description Take photos of your prototype in its best light, and write a compelling description of why itâ&#x20AC;&#x2122;s important. 7. Risks and challenges You must outline potential obstacles, from production delays to permits, that may derail your project. 8. About you You can upload a profile picture, connect your Facebook account, and write a biography. 9. Updates Updates allow you to thank your backers, keep posting on current progress, and explain delays when they occur. 10. Prototype gallery Use Kickstarter's prototype gallery to showcase more detailed updates about the project, from how you designed your product to why you designed it that way.

Bonus: Comparison of 5 Different Crowdfunding Platforms

In addition to the deep dive in Kickstarter and Indiegogo, we've built a handy table comparing the features of five different crowdfunding platforms side by side. VIEW ON GOOGLE DOCS CHAPTER 10

Indiegogo: Benefits & Drawbacks

There are two important differences between Kickstarter and Indiegogo. First, Indiegogo claims it does not curate the projects that it hosts. CEO, Danae Ringelmann, has positioned Indiegogo as an inclusive community that doesn’t decide which projects merit funding. Indiegogo allows for many more categories than Kickstarter does, and whether a project gets funded is up to potential supporters. Furthermore, Indiegogo doesn’t pick which projects to promote on its site. It has developed its own algorithm called the “Gogofactor” to determine that. That’s not to say that absolutely anything goes in terms of launching projects. In order to launch a campaign, you need to only conform to its Terms of Use. These include things like being over the age of 18, not offering alcohol or weapons as perks, and not using Indiegogo to disparage other people. We do recommend you give it a read-through to be very sure that your project qualities. The other significant difference between Kickstarter and Indiegogo is that Indiegogo allows for two types of funding. Kickstarter allows for payment to be delivered only if the goal of your campaign. In addition to the all-or-nothing model, Indiegogo allows you to keep the all the funds you raise, even if you don’t hit your goal. This has to be a decision you make before you launch your campaign. You can’t decide that you’d rather keep all the money you raise after all once you find that you can’t get to your goal. Indiegogo refers to “keep it all” as Flexible Funding, and “all-or-nothing” as Fixed Funding.

Note: Don’t assume that it’s always better to ask to keep every pledge. In fact we recommend that you go with the all-or-nothing model, for two reasons. First, if you don’t hit your goal, you won’t have enough to make the initial capital investments to properly launch your product, and the funds may not end up being very helpful at all. Second, supporters are more likely to fund all-or-nothing projects because they know they get the money back if the goal isn’t reached. The thought that nothing may come out of this money would make any of us more hesitant. All-or-nothing makes it more likely that you’ll get it all. The other differences are less significant compared to these two important differences. Projects that have been successfully funded on Indiegogo include Canary, which raised $1.9 million; Scanadu Scout, which raised $1.7 million; and the Tesla Museum, which raised $1.4 million.

Project funding on Indiegogo Indiegogo allows for many more possibilities for funding, including for causes. You can raise funds for: Animals, Art, Comics, Community, Dance, Design, Education, Environment, Fashion, Film, Food, Gaming, Health, Music, Photography, Politics, Religion, Small Business, Sports, Technology, Theater, Transmedia, Video & Web, and Writing. Indiegogo’s most funded page suggests optimism for entrepreneurs who want to launch products. Out of the top 20 most funded projects, 13 are in the categories of Technology or Design. In fact, the top 10 are all either technology or design.

Fees Indiegogo charges two kinds of fees in addition to a credit card or PayPal processing fee. If you go with Flexible or Fixed Funding, Indiegogo charges 5% of your total sum raised along with payment processing in the 3-5% range depending no location. If you fail to reach the goal, you get charged nothing because you don’t receive anything at all.

Indiegogo Statistics Indiegogo does not publicly disclose the number of campaigns it hosts nor the success rate of campaigns. But we provide some carefully-compiled estimates of what that number is like. In a detailed study based on scraping over hundreds of thousands of campaigns, Hivewire estimates that 28.4% of campaigns reach their funding goal, of both keep-it-all

(Flexible) and all-or-nothing (Fixed) campaigns. The number is significantly higher, and in the ballpark of Kickstarterâ&#x20AC;&#x2122;s overall success rate, if the analysis is confined to all-ornothing campaigns. Keep in mind that you should not decide where to list based simply on the the success rate of the overall platform. The range of projects on both platforms is vast, and so is the level of preparedness and execution of the campaign.

How to Get Featured on Indiegogo A much higher volume of projects are launched on Indiegogo. (Note that a higher volume of pledges are made to projects on Kickstarter.) So Indiegogo uses its own algorithm called the Gogofactor to feature projects. The Gogofactor affects search rankings, placement on the site, featured spots in the newsletter and blog, and inclusion in press outreach. It should be noted here that while Kickstarter offers its own similar algorithm, it also includes a human element to curation, preventing unprepared projects from moving forward to quickly to focusing on creative projects that are truly unique. With Indiegogo, you're less likely to run into these barriers, for better or for worse - that part is up to you. When you optimize your campaign based on our recommendations and when you have frequent updates, your Gogofactor should do well.

The Anatomy of an Indiegogo Page Here are the assets you need to create in order to post a campaign on Indiegogo. 1. Make a video Your video is your most important asset. Make it compelling. 2. A thumbnail image This is the image that everybody sees before they click through to your whole campaign page. 3. A short description You have 160 characters to describe your campaign below your thumbnail. 4. A custom URL

You have the option to customize your link, which helps with SEO. So you might call your page igg.me/at/super-cool-project. 5. Set a funding goal and a deadline Choose keep-it-all or all-or-nothing, and figure out how much you want to raise. Then choose how long your campaign will run. Your campaign can run no longer than 60 days. 6. A longer pitch Give people a short summary of your product, what you’re looking for, and the impact your product will have. 7. Perks These are the equivalent of Kickstarter’s “Rewards.” Figure out your perks, determine whether you want to limit their number, and figure out a delivery date. Indiegogo is also very SEO-friendly. In addition to allowing you to customize your link, it also allows you to hook up outside sites, like your Twitter, Youtube, or personal website.

Comparison of 5 Different Crowdfunding Platforms

In addition to the deep dive in Kickstarter and Indiegogo, we've built a handy table comparing the features of five different crowdfunding platforms side by side. VIEW ON GOOGLE DOCS CHAPTER 11

Optimizing Your Video

The Ultimate Guide to Crowdfunding takes a different approach to advising you on your crowdfunding campaign. This guide brings you the tips from people who know crowdfunding best – the experts who have run great campaigns and crowdfunding sites themselves – and presents raw data collected from a sample of some of the 15 most funded projects on both platforms. Your video is the most compelling tool you have for present why your campaign deserves to succeed. It’s very important to get it right. In our analysis, we’ve found that crowdfunding campaign videos follow a typical formula: Show the the state of the world as it is and why it needs to be improved; introduce what your product is and why it’s an improvement; talk about why you’re crowdfunding and what you need; then finally how prepared you are and why you’re the right person to build the product.

What Kickstarter Advises Projects with videos succeed at a rate of 50%, and projects without videos succeed at a rate of 30%. No matter how creative or bare-bones your video, you'll want to: 

Tell us who you are.



Tell us the story behind your project. Where'd you get the idea? What stage is it at now? How are you feeling about it?



Come out and ask for people's support, explaining why you need it and what you'll do with their money.



Talk about how awesome your rewards are, using any images you can.



Explain that if you don't reach your goal, you'll get nothing, and everyone will be sad.

What Indiegogo Advises “Campaigns that use a pitch video raise 115% more money than campaigns that use a pitch image.” “In a pitch video, you should: Introduce yourself. 

Who are you?



What are you trying to do?



Include shots of yourself and your team speaking to the camera. Let people see your face and hear you explain your project in your own words. Pitch to contributors.



Why are you crowdfunding?



Why do you need that specific amount of money? Showcase your progress and experience.



What have you already done to work toward your objective?



What are your qualifications? Honor short attention spans.



Your video should be no more than 2-3 minutes long.”

What the Experts Advise “The majority of the time I worked on the campaign was spent on the video.” - Bill Trammel, Catan Boards.

“The video took up the most time of the campaign. We had quite a few shots and taped a lot of sessions.” - Mariquel Waingarten, Hickies. “After press reachout, video is the most important part of the campaign. Make sure that you do something good and authentic. It’s the best way to connect with people. Use a microphone. Audio recordings sound really bad if you just use the camera. We bought a really good mic on Craigslist for $40, and it was a great investment. There was no mumbling or noise in the background.” - Noah Dentzel, NOMAD.

The Data Product Amount raised 3Doodler $2,344,134 ARKYD $1,505,366 Canary $1,961,862 Emotiv Insight $1,643,117 GravityLight $399,590 Kano $1,522,160 Kreyos $1,502,828 Misfit Shine $846,675 Pebble $10,266,845 Pono Music $6,225,354 Robot Dragonfly $1,140,975 Scanadu Scout $1,664,574 SCiO $1,774,489 StickNFind $931,870 The Dash $3,390,551

Platform Video length Kickstarter 2:34 Kickstarter 4:18 Indiegogo 2:06 Kickstarter 2:58 Indiegogo 2:25 Kickstarter 3:27 Indiegogo 3:50 Indiegogo 2:42 Kickstarter 2:48 Kickstarter 11:24 Indiegogo 5:11 Indiegogo 2:42 Kickstarter 2:46 Indiegogo 1:02 Kickstarter 4:30

In this sample of select major design and technology projects, the average length of videos is 3:38 (3-minutes and 38-seconds). The shortest video is 1:02 (StickNFind), and the longest video is 11:24 (Pono Music). 2016 Update: The data collected is done so at the time of the writing of this guide. We've decided to leave this data in here to demonstrate the fact that audience behavior and conditions of success change over time. Now, in 2016, the average length of videos falls under 3:00 minutes and may, in the future continue to get shorter. We encourage you to click on the active links above, and watch each of these videos to learn from them. CHAPTER 12

Optimizing Rewards and Perks

What Kickstarter Advises To date the most popular pledge amount is $25 and the average pledge is around $70. Small amounts are where it’s at: projects without a reward of $20 or less succeed 28% of the time, while projects with a reward of $20 or less succeed 45% of the time. There are four common reward types that we see on Kickstarter: 

Copies of the thing: the album, the DVD, a print from the show. These items should be priced what they would cost in a retail environment.



Creative collaborations: a backer appears as a hero in the comic, everyone gets painted into the mural, two backers do the handclaps for track 3.



Creative experiences: a visit to the set, a phone call from the author, dinner with the cast, a concert in your backyard.



Creative mementos: Polaroids sent from location, thanks in the credits, meaningful tokens that tell a story.

What Indiegogo Advises We’ve found that campaigns offering perks raise 143% more money than those that do not. (Shopify note: Unlike Kickstarter, offering rewards, or “perks,” is not mandatory on Indiegogo.) $25 perks are the most frequently claimed. $100 perks raise the most money and often make up nearly 30% of total funds raised.

What the Experts Advise “We knew that most people pledge $25, and so we set that as the core product. And then we worked out from there. We wanted to cover a lot, from the smallest amounts to really large amounts. So we added a few limited edition boards for people to select.” Bill Trammel, Catan Boards. “We created unique t-shirts to give to the people who backed our original Kickstarter campaign and then back our new Kickstarter campaign. You know that this isn’t going to be available after the campaign. That makes them feel special.” - Mariquel Waingarten, Hickies. “We made an early mistake by introducing colors too early on. Most people care about getting the product, not which color it was in. We should have just have chosen one color instead of four. We also found that offering more rewards made things increasingly turn into a logistical nightmare. That’s something that we wanted to avoid. Make it easy, make it scalable, and get your products out to people.” - Noah Dentzel, NOMAD. “When selecting your rewards it’s important to include other perk levels besides the minimum amount required for a backer to receive the product. There should be a tier for backers who simply want to contribute a small amount to the campaign but don’t necessarily want to receive anything in return. Similarly, other backers will want to contribute a smaller amount in order to receive an entry level perk, like a t-shirt. Finally, there may be backers for whom money is no object, so you should consider creating an exclusive perk that gives them special access to the team or a unique experience.” Adam Sager, Canary.

The Data

Product

Amount raised

Platform

Number of funders

Number of rewards

Largest reward amount

3Doodler

$2,344,134

Kickstarter

26,257

$10,000

ARKYD

$1,505,366

Kickstarter

17,614

$10,000

Canary

$1,961,862

Indiegogo

7,461

$8,800

Emotiv Insight

$1,643,117

Kickstarter

4,459

$5,000

GravityLight

$399,590

Indiegogo

6,219

$5,000

Kano

$1,522,160

Kickstarter

13,487

$10,000

Kreyos

$1,502,828

Indiegogo

11,723

$11,000

Misfit Shine

$846,675

Indiegogo

7,957

$14,999

Pebble

$10,266,845

Kickstarter

68,929

$10,000

Pono Music

$6,225,354

Kickstarter

18,220

$5,000

Robot Dragonfly

$1,140,975

Indiegogo

3,203

$2,899

Scanadu Scout

$1,664,574

Indiegogo

8,523

$16,000

SCiO

$1,774,489

Kickstarter

8,520

$10,000

StickNFind

$931,870

Indiegogo

12,312

$150

The Dash

$3,390,551

Kickstarter

$2,999

15,998

In this sample of large design and technology projects, Pebble has the largest number of funders: 68,929, kicking in an average of $150 each. Robot Dragonfly has the fewest number of funders: 3203, who kicked in an average of $356 each. The average number of rewards/perks offered is 14. Pono Music offers the largest number of rewards (44), while StickNFind offers the fewest (3).

The highest reward level with the largest number of funders is $399, from Emotiv Insight. The lowest is from ARKYD, at $25. CHAPTER 13

Optimizing Your Campaign Page

What Kickstarter Advises Your Kickstarter project title should be simple, specific, and memorable, and it should include the title of the creative project you're raising funds for. Imagine your title as a distinct identity that will set it apart ("Make my new album” isn’t as helpful or searchable as “The K-Stars record their debut EP, All Or Nothing"). Avoid words like "help," "support," or "fund." They imply that you're asking someone to do you a favor rather than offering an experience they’re going to love. Your short description appears in your project’s widget, and it’s the best place to quickly communicate to your audience what your project is about. Stay focused and be clear on what your project hopes to accomplish. If you had to describe your project in one tweet, how would you do it?

What Indiegogo Advises When putting together your pitch materials, make them easy for contributors to digest. Instead of explaining your campaign in huge blocks of text, visualize as much of your information as possible. Use charts, infographics, and timelines to present your budget, schedule, or a product comparison. On average, campaigns launched on a Monday or Tuesday raise 14% more in the first week than campaigns launched on all other days of the week.

What the Experts Advise “One really striking thing I noticed was that there was a direct correlation between the length of the Kickstarter page and the amount of funding. So we put up a lot of content, while trying to stay very substantial. Give people a lot to latch on to.” - Bill Trammel, Catan Boards. “We spent almost three to four months preparing it. We considered a lot of things, and wanted to prepare for marketing something that is radically new. At the time we had fairly basic prototypes, and we wanted to re-create the truest experience possible of what our product is like.” - Mariquel Waingarten, Hickies. “Anything you see big companies do you can probably do yourself, and maybe even better because your technology is newer.” - Noah Dentzel, NOMAD. “The top portion of the page should give a reader a very clear understanding of what the product is, what problem it solves, how it compares to other products on the market, and why it’s important to them. Visitors should not have to read the entire campaign page to understand these things. The rest of the page can be dedicated to details and commonly asked questions for supporters who want more information.” - Adam Sager, Canary.

The Data Product

Amount raised

Platform

# of visual assets

Number of words

3Doodler

$2,344,134

Kickstarter

3676

ARKYD

$1,505,366

Kickstarter

5694

Product

Amount raised

Platform

# of visual assets

Number of words

Canary

$1,961,862

Indiegogo

4024

Emotiv Insight

$1,643,117

Kickstarter

3687

GravityLight

$399,590

Indiegogo

1876

Kano

$1,522,160

Kickstarter

3500

Kreyos

$1,502,828

Indiegogo

4302

Misfit Shine

$846,675

Indiegogo

1944

Pebble

$10,266,845

Kickstarter

2093

Pono Music

$6,225,354

Kickstarter

7030

Robot Dragonfly

$1,140,975

Indiegogo

2632

Scanadu Scout

$1,664,574

Indiegogo

2626

SCiO

$1,774,489

Kickstarter

4165

StickNFind

$931,870

Indiegogo

2249

The Dash

$3,390,551

Kickstarter

241

This is a sample from some of the largest design and technology projects. Note: Even the campaign page with the fewest number of visuals and the fewest number of words is pretty long. For reference, one page single-spaced is about 500 words. The shortest campaign here would be four pages single-spaced, while the longest campaign is about 14 pages. The visual assets are high-quality too.

Start taking great photographs, learn some design, and bring out your inner writer. CHAPTER 14

Optimizing Outreach

What Kickstarter advises A nice, personal message is the most effective way to let someone know about your project. Send an email to your close friends and family so they can be first to pledge, then use your personal blog, your Facebook page, and your Twitter account to tune in everyone who’s paying attention. Don’t overwhelm with e-blasts and group messages, but be sure to remind your networks about your projects a few times throughout the course of its duration. Take the time to contact people individually. It makes a big difference. Don’t be afraid to take your Kickstarter project out into the real world. Nothing connects people to an idea like seeing the twinkle in your eye when you talk about it. Host pledge parties, print posters or flyers to distribute around your community, and organize meetups to educate people about your endeavor. Be creative! Contact your local newspaper, TV, and radio stations and tell them about your project. Seek out like-minded blogs and online media outlets to request coverage. Writers are

always looking for stories to write about, and the media has a big soft spot for DIY success stories.

What Indiegogo Advises We’ve found that personalized email is the most effective channel of online communication for your campaign and in fact, the average contributions amount through email is about 20% higher than for contributions through other sources. On average, about 22% of the funds raised by a campaign come from people clicking on social media posts. Most campaigns that meet their goals raise about 30% of their funds from their immediate network. Achieve early momentum by “soft launching” your campaign: 

Before it goes live, ask everyone you know to contribute in the first few days of the campaign



Make a list of the people who committed to helping out, and ask them to make their contributions within the first 1-3 days of your launch. Update contributors:



Update your contributors through the Updates Tab on your campaign page. Campaigns that send out at least 3 updates raise about 239% more money than those that post two or fewer.



Send an update at least once every 5 days. Typically, the more updates a campaign sends, the more money it raises. Send an update when there is news or new information to share about your campaign – think of it as bringing your contributors along for the ride. What the experts advise “One thing I did was pretty cool: I livestreamed the design process. So I put a camera over the process so that people can give live feedback. And we actually changed one of our pledges after someone proposed a really fantastic idea!” - Bill Trammel, Catan Boards. “Of course we had social media ready to spread the word. Since we created a site before we launched, we got a lot of traffic from the Kickstarter page.” - Mariquel Waingarten, Hickies. “We reached out early to a reporter on CNET and offered to give him the exclusive to our launch. On our first day we had a lot of media interest, and we launched properly.

That’s something that you should do. Don’t wait until you launch to try to get press. Start way before, and try to get press as you launch. Tell them exactly when you’ll launch a month ahead of time, not the last minute, and you’ll get more interest. We took press really, really seriously, and knew how important it was.” - Noah Dentzel Catan Boards. “Tell a story about what you can do for others. When it comes down to it, people care about themselves. This means that telling people about how amazing your product is won’t result in a wildly successful campaign, even if your product really is amazing. Instead, tell people how your product will fit into their lives in a meaningful way and solve problems they face. Make your campaign about people rather than tech specs and feature lists.” - Adam Sager, Canary.

The Data Product

Amount raised

Platform

Number of updates

Number of comments

3Doodler

$2,344,134

Kickstarter

2297

ARKYD

$1,505,366

Kickstarter

1473

Canary

$1,961,862

Indiegogo

1302

Emotiv Insight

$1,643,117

Kickstarter

828

GravityLight

$399,590

Indiegogo

2107

Kano

$1,522,160

Kickstarter

411

Kreyos

$1,502,828

Indiegogo

5223

Misfit Shine

$846,675

Indiegogo

2248

Pebble

$10,266,845

Kickstarter

15609

Pono Music

$6,225,354

Kickstarter

9160

Robot Dragonfly

$1,140,975

Indiegogo

2440

Scanadu Scout

$1,664,574

Indiegogo

968

SCiO

$1,774,489

Kickstarter

524

Product

Amount raised

Platform

Number of updates

Number of comments

StickNFind

$931,870

Indiegogo

2579

The Dash

$3,390,551

Kickstarter

4615

Other than SCiO and The Dash, each of these campaigns update their funders frequently. Robot Dragonfly has come up with an eye-boggling 78 updates. You’ll also see that there’s a big variance in comments: the SCiO has 524, while Pebble has over 30-times of that. In general, high numbers of updates and high numbers of comments are correlated with successful campaigns. Another relevant figure is the number of social shares, including on Facebook, Twitter, and Google+. Unfortunately, social sharing buttons aren’t always stable over a long period of time, and the numbers on these pages aren’t all accurate. So we omitted that variable from consideration. CHAPTER 15

Optimizing Campaign Length

themselves – and presents raw data collected from a sample of some of the 15 most funded projects on both platforms.

What Kickstarter Advises Statistically, projects lasting 30 days or less have our highest success rates. A Kickstarter project takes a lot of work to run, and shorter projects set a tone of confidence and help motivate your backers to join the party. Longer durations incite less urgency, encourage procrastination, and tend to fizzle out.

What Indiegogo Advises We encourage campaigners to set a campaign length of 40 or fewer days for the following reasons: 

Momentum: Your campaign should be long enough that you have time to build interest and reach your audience, but not so long that it becomes background noise.



Engagement: The longer the campaign, the harder it is to continue to keep your audience engaged, excited, and contributing.



Urgency: Seeing that a campaign has just a few days remaining creates a sense of urgency for potential contributors, motivating them to act now, rather than later.



Resources: Take into account that you’ll be closely managing the campaign through its duration; you may not want to dedicate 60 days to it. The average fully-funded campaign is 47 days long.

What the Experts Advise “We set a 45-day campaign, because we enough time for the campaign to generate momentum, especially for press.” - Bill Trammel, Catan Boards. “We knew that when we put up the page that we’d have 39 days left. Psychologically it was useful for us to be in the 30-day range, and we found that useful.” - Noah Dentzel, NOMAD.

The Data

Table 1 Product

Amount raised

Number of Days

Platform

3Doodler

$2,344,134

Kickstarter

ARKYD

$1,505,366

Kickstarter

Canary

$1,961,862

Indiegogo

Emotiv Insight

$1,643,117

Kickstarter

GravityLight

$399,590

Indiegogo

Kano

$1,522,160

Kickstarter

Kreyos

$1,502,828

Indiegogo

Misfit Shine

$846,675

Indiegogo

Pebble

$10,266,845

Kickstarter

Pono Music

$6,225,354

Kickstarter

Robot Dragonfly

$1,140,975

Indiegogo

Scanadu Scout

$1,664,574

Indiegogo

SCiO

$1,774,489

Kickstarter

StickNFind

$931,870

Indiegogo

The Dash

$3,390,551

Kickstarter

Both Kickstarter and Indiegogo cap the maximum length of campaigns at 60 days. In this sample of design and technology projects, the average length of a campaign is 44 days. Misfit Shine ran the longest campaign, using all of 60 days, and Kano ran the shortest campaign at 30 days. CHAPTER 16

From Campaign to Business

Remember, the point of a crowdfunding campaign for products is to get the capital that you’d not otherwise get as from your existing network. Don’t keep your eyes off the goal, which is to build an enduring business. Think of the crowdfunding campaign as a wedding: you’d like for it to be spectacular, but what’s important is what happens in the long term. Recall from the previous chapter that you have a host of advantages when you’ve run a successful crowdfunding campaign: you’ve proven market demand, you’ve connected with active supporters, and you have the funds to start a real business. The following few pieces of advice are offered by merchants who have already experienced success.

Build your site before your campaign closes One of the best things for you to do is to build a site before your campaign closes. It’s so important that we’ve decided to make it its own chapter. You can find it immediately after this section.

Keep in touch with your funders Crowdfunding are useful for a great deal of reasons. One of the most important is the aspects of marketing: First, you get attention in the crowdfunding community; second, your funders can turn into an early community of customers and supporters.

You have to be very grateful to your funders. And that means trying to fulfill on time and being transparent with delays. If you have the time, try to thank backers individually. “It’s worked for Hickies to thank every single one of our backers. We’re grateful for their support,” says Collin Willardson of Hickies. Most businesses don’t have a community of supporters who have already proved that they’re behind your product. Make sure to engage with them. Give them frequent updates; make them be the first to know about your new products; surprise them with special notes or maybe even something more extravagant, like a commemorative t-shirt if you have money left over.

Figure out cashflow early on Say you reach your goal of $50,000 in funding, which you’ve calculated to be sufficient initial capital investment to manufacture your product, obtain the supplies, and fulfill all orders. You should also consider how to keep up a source of cashflow. Remember, your product doesn’t end at the campaign. Once you receive a big lump of cash to build the product, you have to be thinking ahead to how to perpetuate a source of income. In fact, cashflow is so important that both Catan Boards and NOMAD had to rely on early sales to manufacture their product. Even though they surpassed their fundraising goals by respectively $336,000 and $111,000, both businesses had so underestimated their costs of production that they had to rely on cashflow to actually manufacture their products. If it wasn’t for early sales, they would have had a lot more difficulty manufacturing their products. The best way to generate cashflow? Building an independent site. See the next chapter.

Shipping and fulfillment Even though many of your funders are genuinely supportive of giving money to help an idea, most would be disappointed or angry if nothing ever came out of it. Delivering the product they pledged for is an important part of keeping them happy. Shipping and fulfilment is difficult, and a lot of creators fail to properly think about this area. Bill Tramel of Catan Boards says that shipping is really important to figure out shipping. “Whenever someone asks me about crowdfunding, I advise them to figure out shipping,” he says. “Not just shipping in the States; shipping everywhere.” He offers an example: “One of our aluminum boards cost about $300 to ship to Singapore. And the pledge was something like $285.”

Make sure to budget for shipping in your rewards, and then figure out whether your funding request still makes sense. Also, make sure that you have a system for fulfilling your pledges. It’s not hard to run into a thousand orders that you have to fill. Either figure out a good way to do everything well yourself, or use a service like Shipwire to ship your goods to funders.

Get an accountant To Bill Trammel of Catan Boards, finding an accountant is crucial. “Try to find one with startup experience,” Bill advises. “Our accountant has saved us so much money.” Don’t underestimate the importance of figuring out how to manage your income and expenses. This is especially true if you’re not familiar with financial concepts. A good accountant knows the tricks of deferring certain taxes and expenses given your situation. Most people won’t ever come into a great deal of money all at once. Don’t make unnecessary expenditures because you’re not familiar with the rules of finance.

Figure out budgeting When you’re running a campaign, always keep the long term in mind. If adding a piece of capital equipment makes you a more durable business, revise your funding goals and ask for it. It’s better to do it then than to not ask for it at all and risk failure on delivering your goods. While you can’t expect to raise exorbitant sums, you shouldn’t be timid about asking for all the expenses you might need around the product. Budget carefully, and tell your supporters what you’ll do with their money. It’s better to fail at not hitting your goal than to take everyone’s money and not deliver a product. Always think about the long term in everything you do. CHAPTER 17

Interview with Catan Boards

Bill Trammel of Catan Boards sought $25K on Kickstarter, and ended up raising over $361K. Bill built a board to make it easier to play Settlers of Catan, which was enthusiastically received by fans of the game as well as the son of the creator of the game. Visit the Catan Boards website here. Shopify chatted with Bill, founder and chief executive Catan Boards, via Google Hangouts. Here’s a transcript of that conversation. Give us an introduction of Catan Boards. Catan Boards created portable and affordable boards that securely hold tiles so that people can play Settlers of Catan more easily. The campaign wrapped up in November, 2012, and we raised about $360,000 on Kickstarter. How exactly did you get the idea for Catan Boards? I’ve been playing Catan since the beginning of college. I’ve always been a bit of a tinkerer. Over a game with some buddies one night, I proposed trying to build something, just because I was curious. That night I worked until 3:30 in the morning to build a basic prototype. I posted it on Facebook, a lot of people liked it, and I thought that we had something. How did you know that you might have a winner here? Part of it is that I was my own customer. I think that that’s crucial. I really wanted a better Catan board, and I’m not one of the most hardcore gamers in the world. This is something I thought that a lot of people would find useful.

You’ve designed a product all by yourself. Do you have a background in design? My background is quite varied. I’ve done a lot of industrial design, but never got a degree in it. My degree is called Liberal Arts and Engineering Studies, which is a hybrid degree from Cal Poly. I was actually the first graduate in the program. I was a mechanical engineer who took a lot of arts classes, but I don’t have an official professional background in industrial design. So if I can do this, then anyone can do this. Did anything else help with deciding on the product before you launched a campaign? Yes! I put together a really comprehensive proposal to the producer and copyright holders of Settlers of Catan. I sent it along to Guido Teuber, who’s the son of the inventor of Settlers of Catan. He was enthusiastic about project and offered to support it. That was really, really helpful for the campaign. Let’s move on to the campaign. Why did you choose Kickstarter over Indiegogo, which is more friendly towards business ventures? We thought a lot about this. I don’t really understand why Kickstarter hasn’t chosen to be more business-friendly. Still, the gaming category does really well on Kickstarter, and it’s one of Kickstarter’s most active verticals. We went after the Kickstarter community. How long did you spend on the page? We spent about a whole month, literally about 30 days. Did you use any professional help? No, this was all done by myself. We edited the videos, created the page, created all the visual assets, all without the help of professionals. I can definitely see why professionals are useful. They can help speed up the process a great deal more. But I know a bit of design, and I think that doing it myself gives the page a single creative vision. That’s important. I think that we were successful in large part because of our level of authenticity. What took the longest time over this month? The majority of the time was spent on the video. The second was the visual assets. I created renderings for each of the pledge levels. Some of the animations of the renderings took a few days. Keyshot, the 3D rendering software, was super useful. Describe the launch.

We set a 45-day campaign, because we enough time for the campaign to generate momentum, especially for press. We expected to reach our goal, but we didn’t expect the speed we had of reaching the goal. It was amazing watching our funding reach $360,000 when we set $25,000. This is a full-time job. I quit my job to run this campaign. And I’m really glad I did. Running the campaign is a huge commitment to do right. Not only do you have to thank supporters, you have to try to reach out to press as well. The first week was really, really crazy. Why did you choose $25,000 as a funding goal? This is something I wish that I did better, and I’m lucky that things turned out the way they did. We totally undershot, and we needed a lot more than $25,000. I recommend that you figure out exactly how much you need, e.g. actually get price quotes from your manufacturers, and think about every cost you need to incur. Also, we tried to be responsible about all the money we got. Focus on the product, not on raising a ton of money. How did you choose your rewards? We knew that most people pledge $25, and so we set that as the core product. And then we worked out from there. We wanted to cover a lot, from the smallest amounts to really large amounts. So we added a few limited edition boards for people to select. How did you get press? So I had a few contacts from when I met people at conferences. Catan also had some connections at Wired and Mashable. Most of it was just me telling my story. We never wrote any press releases. Most of the time I just sent tweets. That’s how I got featured by TechCrunch. Or, I wrote a really short and concise email to give to people who are interested. Somehow the Mashable article was one of the longest articles ever written by Mashable. They interviewed us, and that article trended for quite a few days. Most of this was simply being authentic. Let’s move on to your product. Why did you produce everything in California? We really didn’t want to compromise on the product. Say we go to China for a mold. We may save something like 30% in expenses. But in order to make sure that everything goes well and the quality is great, there has to be a lot of communication and a lot of

management. In a worst case scenario, I have to go over there, and that travel just eats away all my savings. Just to give you a sense of how close everything is: My office is the plastics shop. Literally one block down the road is where the molds are manufactured. Twenty miles away is our wooden-boards manufacturer. If anything happens, I can just bike down to solve any problems. It’s local, and it feels good to support the local community. We can’t really quantify that, but it’s meaningful, and I want to run a company that I enjoy running. What was your largest expense? The largest single expense was the mold. The wooden boards were pretty expensive too. Fulfilment, especially shipping was really significant. Mostly it’s the molds and the shipping. Was there a surprise expense for your product? Oh yes. Shipping was huge and unexpected. Whenever someone asks me about crowdfunding, I advise them to figure out shipping. Not just shipping in the States; shipping everywhere. We were astonished at shipping, and spent about a whole month negotiating with UPS and FedEx. We were shipping thousands of units, but we still only managed to get a discount after a long time. It’s so important to calculate. One of our aluminum boards cost about $300 to ship to Singapore. And the pledge was something like $285.

We also assigned 2X multiples to our parts costs, i.e. doubling our estimates of what we think it would cost. And that still wasn’t quite enough. And so again we recommend that you figure out all your costs. Was there something about the campaign that surprised you? I was actually a little surprised by how little contact we had with Kickstarter. Once we got approved, I don’t think we communicated at all during or after the campaign. Maybe Kickstarter just wants to support the creative projects, but I didn’t communicate with Kickstarter at all. It was still nice to make Staff Picks for a week. What was your engagement strategy with your supporters? One thing I did was pretty cool: I livestreamed the design process. So I put a camera over the process so that people can give live feedback. And we actually changed one of our pledges after someone proposed a really fantastic idea! You have 12 pages of updates. Why did you update so frequently? There’s two benefits. First, it reminds people that this is still going on. Second, and more importantly, it establishes trust. And that’s really important because we were a bit late, but our supporters were still behind us. How did you transition from a campaign to a business? What have you done for durability?

We knew early on that we wanted to sell online. We’ve done several things: Fulfilment goes directly from factories to customers. We also use Shipwire to fulfill. That’s made things a lot easier to operate.

We’re also building other product lines, like accessories and other boards. People want to see these things. We want to build all the game requirements that a Catan gamer would need. We want to provide a product for every part of the gaming experience. Even though you haven’t studied industrial design formally, you did it all yourself. What are some of the resources you consulted? Again, if I can do it then anyone can do it. But there are a few important things. There’s a site called DigitalTutors.com that offers absolutely fantastic tutorials on product design, industrial design, you name it. I spent a whole day learning Illustrator. Learning the software is key. Rhino 3D is great for 3D modeling. Google Sketchup is okay, though not very powerful. KeyShotis really great. It’s super easy, and makes the best renderings of your products.

And what did you read to understand crowdfunding? I think that most of what you read online is pretty basic. I never really read much that was helpful. But I did do research. I went to each of the categories and sorted by “Top Funded.” And then basically I went and looked at all the most successful projects and try to find common themes. One really striking thing I noticed was that there was a direct correlation between the length of the Kickstarter page and the amount of funding. So we put up a lot of content, while trying to stay very substantial. Give people a lot to latch on to. We just wanted to be authentic. We saw a lot of people that try to act folksy, but you can tell that there’s a whole team of people behind them. What are some final, specific pieces of advice you have for people to make their campaign a success? Honestly, you need to price the shipping properly. It’s super important! Also, when you close, you should get a good accountant. Getting a good accountant is really key. Try to find one with startup experience. Our accountant has saved us so much money. Finally, if you do stretch goals, plan and really calculate whether it makes sense to add them. Don’t do them on a whim. CHAPTER 18

Interview with Hickies

Hickies raised $159K of its $25K goal on Kickstarter to create special straps to replace shoelaces. In Spring 2014 it completed its second Kickstarter campaign: PUNGAS, specialty 3D-printed laces. Visit its site here. Shopify spoke to Mariquel Waingarten, one of the two original founders of Hickies, and Collin Willardson, director of marketing for Hickies. Why Kickstarter and not Indiegogo? Honestly, both platforms are excellent. I just found Kickstarter to be better designed; Indiegogo is just a little bit more messy. Of course, we were a little bit worried about the all-or-nothing model. We were scared to get nothing at all. We also knew that Kickstarter has a bit of a larger audience. But we do like Indiegogo. Indiegogo does a lot to support your project since it offers project managers to help support you and to spread the word and create success. They give you a more personal treatment. How did you know that there would be an audience for Hickies on Kickstarter? We didn’t! That’s one of the things that we wanted to check. We personally don’t like shoelaces, and we thought that the technology should have evolved. So Gaston, my husband and co-founder, thought of this a few years ago when he was in college. And finally one day he wanted to give this a try. Nobody has yet done this. And so we wanted to try this out with crowdfunding.

How much time did you spend on the campaign? We spent almost three to four months preparing it. We considered a lot of things, and wanted to prepare for marketing something that is radically new. At the time we had fairly basic prototypes, and we wanted to re-create the truest experience possible of what our product is like. Which part of the campaign took the most time? The video, definitely. We had quite a few shots and taped a lot of sessions. I’m a photographer, and so I photographed all our creative assets. Otherwise, we wrote up the campaign pitch by ourselves. Did you receive any professional help to launch the campaign? Yes, we hired a company in Argentina. It was fairly informal because they were friends, but they were a digital agency who helped us with a script and a video. But we just launched a new Kickstarter campaign, and this time we’ve done nearly everything ourselves to design the page. How did you decide on $25,000 as your goal? That was the initial cost of our mold to make our product. It was one of our biggest expenses. We were really surprised that we reached our goal so quickly. We were super happy, but we have to attribute some of that to luck. Your final amount raised was $160,000. How did you feel when you found that you had lot more money than you expected to raise? We were really glad. We were undershooting earlier because we hadn’t expected all the expenses that would result. Every dollar over $25,000 was welcome, and we felt that we had to use it all. The extra money was useful in a very important way. We ended up producing four, not one, molds. We found that the first mold we produced wasn’t working correctly, and so we used the rest of money on a different mold. If we didn’t raise more, it would have been a lot more difficult for us. What was most of the $160,000 spent on? We spent most of it on the molds. Next was the raw materials and the packaging. Unfortunately we didn’t have quite enough left over to fulfill every single order, and we had to put in a bit of our own money. We had a round of investment as well to start the company properly, and that’s how we fulfilled everything.

Describe the fulfilment process. We used a company called Shipwire. They helped us fulfill everything and worked really well. Thankfully this wasn’t too much of a challenge. What did you do to make this a durable company instead of just a successful campaign? We always thought of Hickies as a company and not just a product. We started getting sales early on, and a lot of retail stores were interested in our product. So we were very responsive with the stores that engaged with us, and that’s how we were able to keep the momentum. We went to a lot of brick-and-mortar stores and we also sold through our website. How did you network and generate buzz? First we reached out to friends and family, and other people with whom we had a lot of social equity. Then we made a list of blogs that may be interested in Hickies. We reached out to them and tried to get them to feature us. Of course we had social media ready to spread the word. Since we created a site before we launched, we got a lot of traffic from the Kickstarter page. We also made a list of media outlets that may be interested in our product and went after them. We looked through a lot of outlets to find ones with a right fit. Did you experience delays in production? Yes, the first mold didn’t quite work, and it made us late. We were about three months late in our fulfilment. But we were really transparent with our backers. We explained everything to our backers, and we told them that quality has to come first when there has to be delays. What was unexpected about the campaign? We were definitely surprised at the level of enthusiasm we received. A lot of people were excited about our product, and we reached our goal really quickly. We were caught unaware that we couldn’t really change the page once we launched. So it’s important to anticipate a few concerns on the, because you can’t fix stuff once people start visiting.

We finally had a few difficulties merging Amazon Payments to Kickstarter. That’s another technical issue that we didn’t really anticipate since we were abroad at the time. So we definitely recommend you solve these little technical things before you launch. Describe the manufacturing process. The manufacturing process was a challenge. We chose to manufacture in China, and Gaston did a lot of intensive research on the best manufacturers there. Still, we had difficulty communicating across different time zones and in different languages. It was very hard explaining small details that we wanted to change. We totally encourage people to use local manufacturers, or at least people who are in the same time zone and who speak the same language. It’s much easier, even if it’s more expensive. We’ve now begun work with an American manufacturer whose facilities are in Mexico. It’s been a lot easier since the transition. What is Gaston’s background, and how did he start designing? He was actually an investment banker, with no prior design experience. But Gaston’s always been passionate about design, and he’s always had a lot of crazy ideas, and he wanted to get into this. Did he take any courses and consult any resources to get the experience he needed? He learned everything by himself. He learned how to apply for a patent all by himself by reading a lot of patent law. He also read a lot of books about product design and new technologies. For the final product, though, he did hire an agency to make sure that his design was sound. How frequently do you update your supporters? After the campaign we kept in touch with our supporters by email marketing and social media engagement. We realize that it’s super important to be transparent and honest with our community. We always want to share everything new that’s going on. We’ve sort of figured out that updating once a week is a pretty good frequency. People want to hear what’s going on with your company. If you leave them alone for too long, they start to worry whether you’re hiding something or whether they’ll see anything happen with the money they put in.

If you get delays or problems, you should give the update really soon. Your supporters know that they’re backing an idea, and they feel especially attached. You should give them stuff to read, because they will read it. What other tactics of engagement have you found really useful? We follow up individually with all of our backers. Every single one. We think that’s a good idea, even if you have hundreds of backers. Sending them a personal message and really being heartfelt is really helpful. Going that extra mile makes them feel more attached to the campaign, and it also makes more likely to share the campaign with their own networks. It doesn’t matter if their funding in the single digits. You should thank them personally. Also, we try to give our backers an extra sense of reward. For example, we’ve created unique t-shirts to give to the people who backed our original Kickstarter campaign and then back our new Kickstarter campaign. You know that this isn’t going to be available after the campaign. That makes them feel special. What is the most important lesson that you can offer to people who want to run a successful campaign? Try to put yourself on the other side of the screen. Be really honest, and see if you would back the project. If the answer is yes, then it’s great. If not, then you need to change. This is a useful exercise. CHAPTER 19

Interview with NOMAD

NOMAD ran its first crowdfunding campaign on Kickstarter in August 2012, raising $161K of its $50K goal to manufacture ChargeCard. A year later, it ran a campaign on Indiegogo, raising $172K of its $50K goal to manufacture the ChargeKey. Both are portablee devices that charge your phone without an outlet. Visit NOMAD’s homepage here. Shopify spoke with Noah Dentzel, CEO of NOMAD. You’ve run two crowdfunding campaigns. Can you describe each of them? We launched our first campaign, ChargeCard, on Kickstarter in 2012. That was a big year for crowdfunding. It was when we saw Pebble and the launch of these milliondollar campaigns. It convinced a lot of people that this is an amazing platform for the arts as well as for creative projects, and that it’s a substitute to traditional angel funding. It was a good time. There was a lot of energy and a lot of press. Again, crowdfunding was just beginning then, and we got a lot of attention. In 2013 we came out with our second product ChargeKey. There had been a lot of changes since our first campaign. We had a brand, we had an office, we moved from L.A. to San Francisco, and had become a real company. We were a hardware company in an internet startup hub, and it was amazing to be in that environment. Why did you try to finance your second big project with crowdfunding and not angel funding or through cashflow? We had a big debate about this. The two big plusses for us were that we’d get a lot more exposure and that this would help a lot with financing. But we also did consider

that it’s a great deal of energy and work to optimize a landing page and to email thousands of backers. But then we figured out that there are new pieces of software that just make the crowdfunding campaign super easy. We used BackerKit to communicate with our funders and also to upsell, and then used ShipStation to manage the shipping process. This was a lot easier this time around. We learned a lot, and it took one-tenth of the effort of our first campaign, in part because of the software that we used. Why did you choose Indiegogo the second time around? We got to know the people behind Indiegogo, which is based in San Francisco. We were really impressed with them, and decided to make Indiegogo our next platform for crowdfunding. It was a lot of factors. We’d already succeeded on Kickstarter, we wanted to try Indiegogo, and Indiegogo was a local company. We also knew that Indiegogo is a lot more hands-on with its projects; Kickstarter is hands-off, but we would have liked a little more attention. Both of the platforms worked well, and we weren’t unhappy with either of them. Why did you decide to crowdfund at all? I had wanted a portable charger for a while. I just wanted to go to a store and buy it, but couldn’t find anything. Amazingly no one had done it. I thought that it was simple: it was just a USB cable and a jumper cable for your phone. Why had no one invented this yet? At the time I was working for my brother’s company in Spain. It was a tech company and I was reading a lot of tech news. There were a lot of Kickstarter stories then. I thought it was really cool. When I got back to the States I tried to put together a little team to get this going. This was definitely a lot of work, but you can’t pretend that the angel circuit wouldn’t be. Getting to talk to a lot of people so that you can get a few tens of thousands isn’t by any means easy. So we decided to crowdfund instead. Was the $50,000 a good amount to ask for, or did you need more? We thought that we were prepared with our funding goal of $50,000. We had quotes from manufacturers on hand. But we were lucky to have reached about $160,000 in funding.

Our tooling cost way more than expected. We had a quote in hand from a manufacturer and everything. But the manufacturer was still delayed; he didn’t account for air-freight shipping; there’s going to be a lot of problems with inputs; and a lot of other complications. The real bill was much higher than the quote. Things added up. As much as we had things spec’d out, there’s just so much that we didn’t account for. We ended up having to rely on cashflow of the sales from our website to try fund everything. Thank goodness it worked out, but we had to be resourceful. If you’re a small company then you need to be using every tool and resource you can to help you out. Try to get your hands on every tool and app that you can get your hands on. We added discount code apps, responder apps, abandoned cart recover apps, all sorts of things. We were able to launch as a two-man team. You also have to keep in mind that when you raise more money that you also have to fulfill a lot of obligations. And things like shipping costs can really creep up on you. How did you transition from a campaign to a business? We started selling online just when we were finishing up our campaign. We knew early on that we needed to figure out cashflow. Even if your campaign goes super well, what do you do on the day it ends? Do you have a store? Where’s your storefront? How do people visit you? Are you building an infrastructure? We tried to figure this out early and made a pretty seamless transition inviting people to go on our website. As we kept getting press, we were able to get people on our own website and not to Kickstarter’s page. We knew that we had to be durable, and we got the processes going right. That included figuring out taxes, incorporation, putting a brand behind everything, and thinking about the long term generally. What was your background, and how did it help your business? I’ve studied what could generally be referred to as the liberal arts. That means history, economics, human geography, math, all sorts of stuff. It’s all about perspective, and I tried to get as much perspective as possible. When I was in college I went to Kenya to work for two months. I spent some time in the Dominican Republic, and in Northern Quebec, all for the sake of getting perspective. As you get all of these ways to think about things, it gets you better at coming up with solutions. And that’s made me pre-disposed to be more active in thinking about making something new. I got to hacking things up, cutting up cables, and experimenting a lot to produce a Minimum Viable Product. A lot of it was MacGyver-esque. Really you can do a lot with very little resources.

We certainly consulted with a few electrical engineers who were our friends, but basically we figured everything out for ourselves. We had instead a huge amount of commitment to try to figure everything out. Steve Jobs wasn’t an electrical engineer, and Richard Branson’s not an aeronautical engineer. They figured this stuff out. How did you figure out the manufacturing process? How did you find your manufacturers? This was one of the scarier parts. I managed to talk to a friend of a friend who was able to connect me with people who know of factories in China and in L.A. We decided to to manufacture in L.A. because we could just drive over there and monitor the process. But the process wasn’t smooth, and we still made mistakes. My advice here is just to get the process started early. Always start early. Do anything you can now to get the ball rolling. How much professional help did you get with the original Kickstarter campaign? None. We did it all ourselves. My co-founder Brian had some experience in the movie industry, and he was good at throwing stuff together. All of it was DIY. One thing about using outside services is that it’s pretty expensive getting something really good from a creative agency that can execute what you want. Otherwise, you should own it all yourselves. The result may be worse, but your vision wouldn’t be compromised. Anything you see big companies do you can probably do yourself, and maybe even better because your technology is newer. How much time did you spend putting together the campaign? About a month, full-time. We quit our jobs so that we can work on this exclusively. We put a lot of effort into this. Why did you choose 40 days for our campaign? We knew that when we put up the page that we’d have 39 days left. Psychologically it was useful for us to be in the 30-day range, and we found that useful. How did you determine your rewards?

That was relatively easy given our products. We know that most people just want our products. We just gave out 1 to 5 of our products. We made an early mistake by introducing colors too early on. Most people care about getting the product, not which color it was in. We should have just have chosen 1 color instead of 4. We also found that offering more rewards made things increasingly turn into a logistical nightmare. That’s something that we wanted to avoid. Make it easy, make it scalable, and get your products out to people. What was the most important to the success of your campaign? Press outreach. No question. There’s two parts to getting good press. First, you have to have an amazing product. If you don’t have a cool product, no one will write about you. Second, you have to have a good reach-out campaign. We found that the better the publication, the easier it was to make contact with them. The top publications are on their game, and they want to be covering the most important news out there. It wasn’t super hard to find their emails. Most of that is readily available, on their Twitter or website. We didn’t want to give the game away too early, and we sent pretty cryptic emails to people. Amazingly a lot of reporters responded and we got interest. We reached out early to a reporter on CNET and offered to give him the exclusive to our launch. On our first day we had a lot of media interest, and we launched properly. That’s something that you should do. Don’t wait until you launch to try to get press. Start way before, and try to get press on the day that you launch. Tell them exactly when you’ll launch a month ahead of time, not the last minute, and you’ll get more interest. We took press really, really seriously, and knew how important it was. Another tool we used was Streak.com. We managed our press lists with it and it helped out a lot to process everything. Besides press, what else is important? The video. Make sure that you do something good and authentic. It’s the best way to connect with people.

Use a microphone. Audio recordings sound really bad if you just use the camera. We bought a really good mic on Craigslist for $40, and it was a great investment. There was no mumbling or noise in the background. We had quality. What’s the most important piece of advice you can offer to other entrepreneurs? Just go for it. A lot of things that seem scary really shouldn’t be. You just need to dive in and start doing it. The mental hump is big, but really a lot of things are easier than it seems. It’s 2014. You can whip up a prototype and get a site going in a day. Be resourceful; it might take a lot of work, but not everything is super hard. Still, don’t expect everything to be easy. Money’s not free, and crowdfunding takes a lot of commitment. You’ll need to work really hard. CHAPTER 20

Interview with Canary

Canary Home Security is the most-funded hardware project on Indiegogo. 7461 funders contributed nearly $2 million to the project to provide a home security device controlled by your smartphone. With press coverage from Mashable, Fast Company, and Engadget, it’s one of the best-known crowdfunded products. You can find Canary’s campaign page here and its homepage here. Shopify conducted an email interview with Adam Sager, CEO.

Why crowdfund instead of more traditional means of funding? At Canary, we did both. We raised some money before crowdfunding and closed a $10M Series A in March – about 6 months after our crowdfunding campaign ended. We raised money prior because we decided early on that we wanted to have the manufacturer, design, pricing, timeline, industrial design, and other large pieces of the project done before crowdfunding. We knew who we wanted to be as a company, and the impact we wanted to have on the world. This goal meant we needed to hire people before crowdfunding, which meant we needed a seed round of funding to get things going. Once we finished our crowdfunding round, the Series A set us up to grow Canary into a company. Specifically, the funding allowed us to hire the best people and push development of the hardware and software forward faster, including our unique machine-learning layer that will help reduce false alarms dramatically. In between the seed and the Series A, crowdfunding helped us in three ways: First, it established a product-market fit. We knew by the reaction that the need we were solving really resonated with people. Second, it established the size of the market. Not only were there people out there who wanted this thing, there were a lot of people out there who wanted it. We had orders from 78 different countries. These first two points allowed us to not just say, but show venture capitalists why we would be successful. Lastly, crowdfunding allowed us to finance the first order of products. How did you settle on Indiegogo instead of another platform? Did you communicate much with Indiegogo, and did they offer special assistance? We chose to use Indiegogo because they had a customizable platform where we could tell the story in our own way. There was a lot of flexibility around that, which we liked. Additionally, Indiegogo allows project creators the option to sell multiple units of their product while some of the other major crowdfunding platforms don’t allow “multiple item” perks. We communicated regularly with Indiegogo throughout the campaign and are still in touch. Why did you shoot for $100,000? We set a goal of $100,000 because that was the minimum amount we needed to cover tooling and manufacturing costs. The pricing of our perks was based on estimated costs

of materials, manufacturing fees, and market research. Our goal was to create a high quality product at a price point that was accessible to most people. Could you describe a bit of the strategy behind selecting your rewards, the highest of which is quite a bit of money? When selecting your rewards it’s important to include other perk levels besides the minimum amount required for a backer to receive the product. There should be a tier for backers who simply want to contribute a small amount to the campaign but don’t necessarily want to receive anything in return. Similarly, other backers will want to contribute a smaller amount in order to receive an entry level perk, like a t-shirt. Finally, there may be backers for whom money is no object, so you should consider creating an exclusive perk that gives them special access to the team or a unique experience. The idea behind our top reward tier— Collector’s Edition — was to offer a one-of-a-kind experience for a backer who was especially excited about the product and wanted to make a more significant contribution to the development of Canary. The backer who chose that perk will receive the first Canary off the production line, signed by the team, and was flown to NYC to spend a day with our team. Describe your strategy for engaging with your supporters. What was the frequency of updates? Did you do anything special to engage social interest? When you crowdfund a product, engaging with your supporters is the most important and most enjoyable part of the process. It was humbling for us to hear from people all around the world who were as excited about Canary as we were. Our strategy for engagement focused on four things: 1. Listening We received thousands of comments, tweets, emails, and Facebook messages from backers offering suggestions, asking questions, and telling us about their lives. We worked hard to answer every question and thoroughly considered all the feedback we received, some of which lead to product changes (for example, we added in an Ethernet port after we learned that Wi-Fi wasn’t as reliable in some countries). 2. Showing gratitude We wouldn’t be where we are now without the generous support of our backers, and we’ve continually made it a point to show them how grateful we are. For instance, we sent handwritten thank-you notes to many of our early backers and held contests where backers could win t-shirts and free Canary devices. 3. Building trust

Whether we’re answering questions from potential customers or sending updates to our backers, we always strive to be trustworthy and transparent. Trust isn’t built instantly but rather it’s a continual process of being honest, communicating with backers regularly, and making decisions that are in your backers’ best interest. 4. Maintaining engagement Crowdfunding is a journey and we want our backers to be involved throughout the entire process, not just at the beginning and the end. Through social media, blog posts, and monthly campaign updates, we continue to keep our supporters informed and engaged since the campaign has ended. Your campaign page is fairly long. Were you afraid that your supporters would not want to read the whole thing? How did you think about the tradeoffs? Over the course of our campaign the page grew as we expanded our FAQ based on messages we received from backers. A long page isn’t inherently bad, but it’s important to order the content strategically. The top portion of the page should give a reader a very clear understanding of what the product is, what problem it solves, how it compares to other products on the market, and why it’s important to them. Visitors should not have to read the entire campaign page to understand these things. The rest of the page can be dedicated to details and commonly asked questions for supporters who want more information. At the end of the day there is no “right” length. Some people will skim, others will devour – you need to have content for both. Organizing your content properly is the best way to ensure it suits all audiences. What are some specific tactics that helped your campaign and that you feel aren’t very widely known? Crowdfunding isn’t easy. It takes a lot of hard work and planning. The success of our campaign wasn’t the result of any secret tactics, but there are a couple things we did that are more important than some people may realize. Tell a story about what you can do for others. When it comes down to it, people care about themselves. This means that telling people about how amazing your product is won’t result in a wildly successful campaign, even if your product really is amazing. Instead, tell people how your product will fit into their lives in a meaningful way and solve problems they face. Make your campaign about people rather than tech specs and feature lists. Spend money to make money. There are certain things that are critical to the success of your campaign, and if you’re not an expert in these areas it’s worth investing some money to have them done well. For example we hired an experienced director to film our video so we could better tell our story. Hiring professional PR assistance can also

be a worthwhile investment depending on the scope of your project and the size of your team. Where are products sourced? How did you go about finding a supplier? Describe the manufacturing process, in particular the unexpected obstacles. We partnered with one of the top consumer electronics manufacturers in China to produce Canary. Finding a manufacturing partner was not a decision we took lightly. Before we launched our campaign, we took recommendations from friends, colleagues, and partners both here and in China and then visited a number of facilities in person before making our decision. The manufacturing process can essentially be summed up as testing, iterating, testing and more testing. We would assemble a small batch of devices, conduct exhaustive tests on every component, refine the design, and then start the process over again. With hardware, unlike software, you need to make sure the product is perfect before you send it to backers. In most situations, iterating after you launch is extremely difficult if not impossible. The biggest challenge we’ve faced is geographical, so for many months we have had Canary employees working out of our manufacturing facility in China. There’s really no replacement for actually having boots on the ground, so to speak. How did you test the demand for your product? How did you know that there would be a community for you? First we talked to everyone who would listen to us—our friends, family, strangers—and tried to understand how they solved the home security problem and what they thought about our idea. We found that a real need existed for a new kind of security product. Second, we conducted an online survey to get insight from a much larger group of people who didn’t know us personally. And third, we presented our idea at local meetups and received a lot of interest and positive feedback from other entrepreneurs and early adopters. Describe the transition process from a campaign to a real business. What have you done for durability? We never really had a mental transition since we knew from the beginning that we wanted Canary to be a company and not just a single product. Our crowdfunding campaign accelerated our growth as a company and the transition really lies in two things - building out our vision for Canary products, and building the team to get there. A successful campaign wasn’t our end goal, but rather the first stage of our roadmap. The money we raised through crowdfunding is being used to bring our first product to market. Based on the success of our campaign, we were able to easily show venture

capitalists product-market fit, which is one of the first things they look for in an investment. The round of funding we raised from VC’s allowed us to build out an amazing team that’s quickly approaching 50 employees. Harnessing their expertise, we’ve been able to build a product roadmap and strategy with big ideas that will help ensure we’re around for years to come. CHAPTER 21

Infographic This is an analysis of all campaigns on Kickstarter and Indiegogo completed by August 7th, 2014. The data is prepared by HiveWire, a crowdfunding solutions company based in Toronto. Take a look at its methodology for how it collected this data. You can check out all of our findings in the infographic below.

To better understand which crowdfunding campaigns and on which platform are successful, Shopify partnered with HiveWire to analyze over 400,000 completed Kickstarter and Indiegogo campaigns. We present those findings here. Here are some interesting points we’ve uncovered: 

When it comes to raising money, women may be better off going to the crowd: 37% of successful campaigns are run by female founders, while only 5% of VC investments go to female founders.

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Though nearly 10% of all funds pledged on Kickstarter and Indiegogo come from New York City, San Francisco punches way above its weight, raising nearly 600% more per capita NYC.

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Successful campaigns have videos with an average length of 3-minutes-and-4seconds, offer 9 levels of rewards, and last for 35 days.

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Campaigns on Kickstarter that ask for less than $1,000 have an very high success rate of of 61%.

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As might be expected given Kickstarter’s stricter curation process, much fewer of Indiegogo’s campaigns reach their funding goal. 9.8% of Indiegogo campaigns reach that goal, compared to 43.4% of Kickstarter campaigns. Note also that Indiegogo allows both flexible and fixed funding goals, and in an apples-to-apples comparison of keep-itall campaigns, Indiegogo’s success rate is slightly higher at 17.1%.

CHAPTER 22

Crowdfunding Is Hard... But Rewarding

Here’s a fundamental lesson we’ve emphasized since the beginning of this guide: Crowdfunding is hard. Even with the best advice and the direction of the most successful project creators out there, you’ll still have to struggle with promoting your campaign; creating an amazing landing page and video; manufacturing your product; delivering to funders; and building an enduring business afterwards. None of these are easy, and each require a significant investment in time and resources. Every successful project creator we interviewed told us that creating and running their campaigns was a full-time affair. This was not a side thing that they did on nights and weekends: They quit their jobs to create and run a campaign. If you decide to run a crowdfunding campaign, there are two things that you should accept: First, your campaign may not succeed. No matter how hard you try, you may never get momentum in terms of attention and funding. Second, even if your campaign does succeed, you may still have a very hard time shipping out your product. Many things can go wrong: manufacturing is difficult and unpredictable; shipping costs eat away at your funding; and your funders may turn irate when you’re late. Crowdfunding, both the campaign and the product manufacturing, is no cakewalk. And here’s one more thing to keep in mind: If you manage to raise the funds to manufacture your product, then you get to really pursue your dream. You’ve designed a product you love with the help of people who have bought into your vision, and you’re spending your time convincing other people to love it as much as you do.

Each of the entrepreneurs we’ve interviewed are incredibly proud and happy at the path they’ve taken. They’ve come up with an idea all by themselves, validated it with a crowdfunding campaign, and are selling it broadly and successfully. We’ve given you advice on how to choose a product crowdfund; the tools you need to carry out a successful campaign; advice from successful project creators; a comparison of different crowdfunding platforms; and data to help you optimize the key parts of your campaign. We hope that with this guide you too will be able to take the path of those who have found crowdfunding success. CHAPTER 23

About the Author Dan Wang

Dan Wang is a Shopify Content Specialist. He studies economics and philosophy at the University of Rochester, and worked before Shopify at the Philadelphia Museum of Art and the Huffington Post. Talk to Dan on Twitter.