Last week, I spoke at StartFEST, Utah’s largest grassroots startup festival, and I got to do two very cool things: hang out with some really smart people, and talk about the good and the bad of marketing a crowdfunding campaign. If you didn’t have a chance to attend, fear not. Below, I’ve listed my CliffsNotes from the panel discussion. Curious about the four critical elements of a successful crowdfunding campaigns? Read on ahead.
First, I’d like to introduce my fellow panelists: Kurt Workman of Owlet Baby Care, who has raised several hundred thousands of dollars in crowdfunding, and just secured a $7MM seed round; and Travis Chambers, of One in the Chamber, who has raised $1.2MM for Saygus (“The world’s first no-compromise smartphone.”). Travis made a point worth noting: videos are incredibly important because potential investors want to see a product in action—and the more enticing, the better.
So, what are the 4 critical elements of a successful crowdfunding campaign? Let’s get started.
1. Your product or service must be fundamentally good
So what does this mean exactly? Your offering must include two critical elements:
- It must be novel or unique. You want people to tell each other: “There’s just nothing quite like it!”
- It must engage people emotionally—you need to have more than just cerebral buy-in; you need it from the heart, too.
2. You must pitch properly
To hook and hold on to potential investors’ attention, you must START with the benefits your product or service provides, instead of rhapsodizing about the features. Why? Because you want to convince people that your product or service will make their lives better or more interesting. Features, on the other hand, will serve as proof that you did your homework and can deliver on your promises. So focus on the benefits first, and get into the details of the features later.
3. Know your audience & incent accordingly
Think very carefully about how you tailor your messages and incentives to the different segments of your audience (you’ll never appeal to just one segment). Here are some examples of how you can think about approaching some of your top segements.
- Partners & family / industry peers / friendly competitors: Don’t shy away from using emotion & product vision to get buy-in. And don’t be afraid to ask your network for access to influencers with which you’re not yet connected. But also make sure you do it respectfully and thoughtfully. This segment can be one of your greatest allies, but you don’t want to burn any bridges.
- Promoters, including members of the press and bloggers. This segment is on the lookout for “the next big thing.” Offer them a story that already has the buy-in of an expert or two, which will show that you’re serious. This also minimizes the risk of someone who takes the time to write about your product or service—and may even decide to champion it.
- Your target population: Offer meaningful perks and rewards to help you raise funds and encourage word-of-mouth marketing for broader reach. Don’t leave these as an afterthought, so take the time to step into the shoes of your target population and see if the rewards you’re planning to offer make sense.
4. Maintain momentum
It’s true that a campaign benefits enourmously from the novelty of a brand new launch, but your campaign will be successful if you can keep the momentum going. So how do you do it? It’s important to be consistent with your communication throughout you campaign by offering funders (and potential ones) with updates, interesting news, and additional stretch goals. Another trick is to secure committments pre-launch, which can help add much-needed fuel to your campaign’s fire.
Are there any other important qualities you would add to the list? Let me know if you’ve got any compelling tips to add, or if anything unusual or unique has worked for you!
Up next, learn to be media savy and get the attention your campaign needs. Check out our top 5 crowdfunding press release fails and download our free press release template.