3 Mistakes to Avoid When Running a Crowdfunding Campaign – Roy Morejon

1.jpeg

When Retro Computers turned to Indiegogo for crowdfunding, it promised $100-level funders a handheld gaming device called the Vega+. With promises from the company that the device would come equipped with more than 1,000 games, the console quickly gained a following, and more than 3,600 people pledged $100 each to receive one.

The successful campaign gained U.K.-based Retro Computers more than half a million dollars.

But when the time came for those backers to receive the handheld devices, Retro Computers wasn’t able to deliver. Legal battles and production issues caused hiccups. The promised September 2016 delivery came and went. Users began getting upset — more and more publicly.

Finally, after unwanted media attention and, just this month, a lawsuit, Indiegogo intervened. The crowdfunding platform announced on June 6 that it was siccing debt collectors on Retro Computers in an effort to reimburse its donors.

Despite that tale of woe, entrepreneurs can’t ignore the potential of crowdfunding. Kickstarter has hosted nearly 150,000 successful projects, raising $3.7 billion since 2009, and Indiegogo has raised more than $1.5 billion since 2008. Done correctly, crowdfunding could provide the perfect building block for your next venture.

The ups and downs of crowdfunding

Crowdfunding’s popularity is not all hype. It can yield benefits beyond financial backing, helping your company build a loyal customer base and establish credibility before you’ve even launched. But you can’t just set up a Kickstarter page and watch the money roll in. The right strategy is essential to reap the rewards.

Pebble shows how it can and should be done. One of Kickstarter’s most successful campaigns of all time, the company raised more than $20 million from 78,000 backers — exceeding its goal by 4,068 percent. Pebble turned that consumer confidence into more than 2 million sales of its smartwatch and was ultimately bought out by Fitbit.

But when it comes to crowdfunding, there’s more to consider than whether your project will meet its fundraising goals. Even a successful campaign without serious forethought and planning can encounter challenges that will sink a business before it gets off the ground.

Coolest Cooler, on the other hand, might be one of the most disastrous campaigns in Kickstarter history. The company raised $13 million, but it wasn’t prepared to operate in the wake of such success. Coolest Cooler couldn’t fulfill rewards for its 62,642 backers.

Remember: It’s not just about hitting the goal. Even in successfully funded projects, 9 percent fail to deliver on promises to backers. That’s a hard hurdle to overcome in the beginning stages of any new business.

3.jpg

Campaign mistakes to avoid

It’s easy to think of crowdfunding as easy money, but campaigns should be hard work if you’re doing them correctly. If you want to start your project on the right foot, avoid these common mistakes:

1. Kicking off without leads in place. Crowdfunding campaigns have short time lines. What’s more, campaigns rely on a momentum of interest. You’re going to have difficulty hitting your goal if you don’t have leads in place ready to back your campaign on day one. Not gathering enough leads before launching is the problem partially to blame for nearly every failed project.

Set up a landing page ahead of time describing your product and promoting your upcoming project. Include a contest in which people can enter their email address for a chance to win your product. This will give you a list of already interested folks to reach out to the day you launch your campaign.

2. Ignoring Facebook for potential conversions. Platforms such as Kickstarter and Indiegogo have large audiences, but if you rely solely on the backers already there, you probably won’t hit your goal.

So, look elsewhere. Facebook advertising is one of the most cost-effective ways to reach a highly targeted group of people that is likely to convert.

Consider the PEEjamas Kickstarter campaign, which my company mounted. That project hit its $14,000 goal early on, but my company wanted to see how far we could go. Funding increased from around $26,000 when we started the ads, to $227,469 by the time the campaign closed. I highly recommend working with a team of Facebook Ads specialists who can make the most of your ad budget.

3. Failing to consider scale. You might have a goal in mind, but what happens if you exceed it? Is your business model scalable? Are you going to be able to fulfill rewards? Don’t be Retro Computer or Coolest Cooler.

Make sure the price of each of your rewards is sufficient, whether you hit your goal exactly or raise more than you anticipate. Have a plan in place for shipping and fulfillment. Examine your profit margins closely as you set your funding goal, and determine product pricing. Consider factors such as minimum order quantities, manufacturing costs, marketing costs, platform fees, shipping costs and more.

One last thing to consider: Kickstarter and Indiegogo both have a 5 percent use fee and a 3 percent to 5 percent processing fee. Factor this into the goal you initially set.

Platforms such as Kickstarter and Indiegogo have broadened the horizons of startups and consumers alike, but getting the most value out of crowdfunding requires forethought and planning. There are plenty of Cinderella stories out there but also just as many cautionary tales. Avoid their mistakes to make the most of your fundraising endeavor.

If everyone who read the articles and like it, that would be favorable to have your donations – Thank you.

 

Advertisements

These 9 Illustrators On Instagram Will Remind You To Self-Care – Jane Claire Hervey

1.jpg

Running a creative business is tough—especially when you’re running on empty.

I currently manage my own production studio and nonprofit, and I can tell you from experience. As entrepreneurs, our to-do lists are endless, the risks of our decisions are usually high, and we often forgo our own care out of work guilt or shame.

As part of my journey to design a sustainable lifestyle for myself, I have spent the last year cultivating a more stable relationship to my work. This has meant pausing projects that need more space, letting go of clients that do not see my value and giving myself time—time to experiment, time to fail and time to critically think.

Exercising that restraint has been hard. I sometimes want to over-work, I usually want to launch a project when I’m not ready, and I often rip myself to shreds when I make a mistake. But daily rituals and routines that reaffirm my goals and address my own doubts have become life-giving, and that’s where these illustrators come in. Today, I’ve rounded up 10 artists on Instagram that have transformed my day-to-day consumption of social media. I hope they bring you a little inspiration, too.

1.) Ashley Lukashevsky (@ashlukadraws)

Lukashevsky’s bold illustrations serve as daily reminders to be present, take authentic action and always show up with a caring attitude.

2.) Chetna Mehta (@mosaiceye)

Mehta’s earthy prints are centered in wellness and spirituality, encouraging her audience to heal.

3.) Florence Given (@florencegiven)

Given’s posts sometimes knock me out of my chair—her messages are always a reminder to engage in a culture of celebration, not comparison.

4.) Lulu Kitololo (@lulukitololo)

Kitololo’s patterns and sayings are short and sweet, but always joyful and positive.

5.) Victoria Emanuela and Caitie Metz (@onbeinginyourbody)

Emanuela and Metz keep it real. Their posts are typically instructional and eye-opening, nudging the viewer to acknowledge their physical bodies in realtime.

6.) Stephanie Deangelis (@steph_angelis)

Deangelis’ characters are strong, vulnerable and relatable all at once.

 

7.) Hana Shafi (@frizzkidart)

Shafi’s works are honest and unafraid to confront the complexity of our own emotions. Each piece is a reminder that showing your human is OK.

8.) Mari Andrew (@bymariandrew)

Andrew’s illustrations are a peek into your own head. She often draws and writes about the things we’re thinking, but don’t always say.

Mari Andrew