Article
How to Crowdfund a Million Dollars
This guest post was written by Jonas Gyalokay, co-founder and CEO at AIRTAME, a company that wants to rid the world from screen cables and help people to work better – wirelessly.
Crowdfunding is the process of turning early-stage funding, getting to product-market fit, building a customer tribe and telling people about your existence on its head. It’s probably the most democratic and direct verification of business potential – if done right.
The AIRTAME device is a small computer that plugs into the HDMI port on your TV or projector. Connect it to your WiFi network and stream content from all your devices – wirelessly. AIRTAME started in 2013 because of a deep frustration hassling with screen cables and adapters in meetings. It launched on Indiegogo November 21st, 2013, raising $1.3M USD in two months from 12,000 funders. Here’s what we learned from our campaign.
Before you start
Build something awesome
The rule of thumb above them all: build something great. Something that you really believe in. Something with an insanely great purpose. Not something to make a quick buck or two. It won’t hold up in the long run and you will get sick and tired of it because its lack of purpose (believe me, I’ve tried that approach as well and since I’m now doing AIRTAME you can guess how that turned out).
Building something that you truly believe will change the world for the better makes you way more tenacious when inevitable challenges arise and much more authentic when you need to start telling people what you’re trying to build (more on that later).
Decide if crowdfunding is for you
Crowdfunding is not for everyone. First of all, you need to decide if you have something valuable to offer as a perk (what people get for contributing to your project). That’s often a good match-indicator. As important as nailing the product/market fit is, just as important is it that you have product/crowdfunding fit. Secondly, you should know that crowdfunding is not a small task. It’s a very very big opportunity and therefore you also need to do it right. And that takes time – time away from actually developing your product and business.
Third, make sure you know the pros and cons of crowdfunding.
Before your campaign
Nail the campaign page
Okay, since you’re now reading this, I’m counting on you to have a great product (read: prototype) that fits the crowdfunding context. Perfect. So now what? Well, as mentioned crowdfunding is a really big opportunity for you. But it takes a lot of work to stand out between all the other campaigns and as it goes ‘break through the crowdfunding surface’. And it all starts with your campaign page. So make sure you have invested in a good video (hugely important), crystal clear copy and some nice imagery to back up your product and vision. This can’t be underestimated. Your campaign page is your digital face to the world, so make sure ‘you don’t have dark circles under your eyes’.
Tip: Involve friends and family early when creating your campaign page and listen to their input and make adjustments. If they can’t understand what you’re doing and why it’s awesome, no one will.
Get people to line up
Great, now that your page is ready to go, you need to start telling people about your upcoming launch. Optimally you want your tickets to be sold out before the premiere night. The obvious digital channel for this would be social media sites (but could also be other places like forums, a landing page or offline events). Make sure you’re active and run some pre-crowdfunding campaigns to establish a small fan tribe before going live. And make sure the content (videos, articles or images) are teasing about the launch, but not telling the whole story. You want to go after creating as much anticipation as possible. Here’s, for example, a couple of teaser videos we did before our launch.
Tip: If you can manage to get one of the bigger news sites to feature your story (maybe as an exclusive to make the incentive for them stronger) on launch day, you can of course make an even bigger bang for the buck. We didn’t manage to do that even though we pitched journalists like crazy (cold calling/emailing). In fact we didn’t get any (big) press until a week into our campaign. But more on that later.
When your campaign is live
Launch big
Game time baby! This is what you have waited and prepared for and you need to give it all you’ve got. Launch day is your biggest chance to break through ‘the crowdfunding surface’ because of how crowdfunding platform’s popularity algorithms work.
For us, the most powerful hack was probably that we had prepared 100 personal emails each (multiplied by five founders) that went out to social influencers or people we thought had a higher chance of contributing from within our own network. All those emails went out exactly when we launched, together with notifying people on our social channels. But it didn’t stop there. We pretty much went through all of our contact lists on Facebook, Twitter and LinkedIn (etc., etc.) and wrote everyone (until the FB bot stopped us – sorry for spamming you guys back then). Furthermore we submitted the link (to our campaign page) to Reddit, HackerNews, Digg, StumbleUpon, you name it1. We used all of our social capital that day (remember I mentioned that you really need to be able to stand behind what you’re doing – this is why).
With a mix of preparation, luck, blood, sweat and tears we managed to get featured on Reddit (as most popular gadget that day) and HackerNews and got a whole lot of social shares and all in all ended up raising $30,000 USD the first day.
Because of a good head start we broke through the surface on Indiegogo and was featured on the ‘most popular campaigns page‘ (biggest ‘hack’ ever because of all the ‘free’ traffic coming from there) and was named ‘Project of the day’ shortly after. But it all came because of our social hustle.
Keep people in the loop
Once you’re out there make sure to keep people in the loop. It probably goes without saying, but as mentioned, crowdfunding is a full-time job and if you ‘take off’ from the first day it can be hard to keep up with everything that happens. Also because you still want to better the product simultaneously. But replying everyone and posting frequent updates is not only the right thing to do, it also adds to your popularity on the given crowdfunding platform. It shows that your campaign is active and the popularity algorithms love active projects.
Show traction
In addition to keeping people in the loop, you also need to show smaller and bigger wins. Not to brag, but to validate yourself. You need all the small checkmarks you can get. So make sure you share product updates, press, testimonials, case studies or whatever small win with your community.
Prove your worth (in real-time)
Creating a nice campaign video is extremely important. But it’s pretty easy to fake things in your video. The way to actually prove that your prototype works is to do it in real-time. We were very lucky that CES accidentally (we hadn’t thought about it before our launch) was held in the middle of our campaign. The benefits of going there was invaluable. We could show people that our product worked okay on a smaller scale and we furthermore got a ton of great feedback and good customer leads. If you can plan your campaign around a bigger trade show/offline event, you should definitely do that – and then go out and meet your customers. Especially if you’re a hardware company – but also if you’re not.
Utilize the power of the crowd to create ripple effects
Hopefully, your (crowdfunding) community is expanding by now. More and more people are contributing and supporting your project. Besides engaging the existing group of people as much as possible, you should also make sure to get them to help you spread the word even further. Sometimes it can actually be pretty powerful to just ask “Can you please help spread the word?” What’s even more powerful is, of course, to offer people some kind of carrot:
- Early in your campaign, the simple CTA can just be ‘If you help spread the word, our campaign becomes successful and that betters our chances of realizing the project and ship you your reward’.
- If you’re lucky enough to hit your goal during your campaign, don’t stop there either. Ask the crowd which additional features they would like to see and offer them as stretch goals. Since the stretch goals are prioritized by the crowd, it’s something people really would like to get as well, thereby bettering the chances of them spreading the word even further. It also gives a lot of good vibes when you actually hit one of your stretch goals and your product suddenly ‘becomes better’.
- The last thing would be to do contests on social. That was extremely beneficial for us. Simply drawing lots between people that either liked a FB post or retweeted a tweet on Twitter. Giving out a free reward to the winners.
Don’t stop – go after the gold medal
I will mention it one last time: crowdfunding is a full-time job (if you want to go big) and it’s a lot of work and hustle before, during and after the campaign. You will see ups and downs in your daily funding activity (most projects raise the most funds in the beginning and the end of their campaign). But even though there can be a ‘silent’ period in the middle of your campaign, you can’t stop trying to ‘get out there’. Don’t stop pitching journalists, don’t stop replying people, don’t stop doing updates, just don’t stop. Two-thirds of our total crowdfunding amount came the last two weeks of our two-month campaign. And actually, nearly $200,000 USD came within the last 24 hours of our campaign. Which brings me to…
End big
Last chance. You’re running out of time. Go take everything you have learned (what worked, what didn’t) and go out there and do one ‘last’ crowdfunding sprint. People are very afraid of missing out and you have hopefully collected a lot of small checkmarks and wins. Use that to get the last people sitting on the fence.
After your campaign
Now what?
Preparing for a crowdfunding campaign and launching a crowdfunding campaign takes a lot of (you guessed it) blood, sweat, and tears. And hopefully, you come out as a winner, ready to realize your dream… and then the fun begins: Actually turning your prototype into something real, keeping people in the loop and happy when you run into unavoidable challenges and a whole lot of other things becomes your new reality. I won’t recommend preparing very much for it before your campaign, because, well, you don’t know what’s out there. As Mike Tyson says, “Everyone has a plan ’till they get punched in the mouth.” Just make sure you have the grit, tenacity, and purpose to do whatever it takes afterwords. And maybe this can help prepare you a little bit for what lies ahead. Good luck!
Here are the key lessons we learned after our crowdfunding campaign.
