Ronjini Joshua is the Founder and CEO of The Silver Telegram, a technology PR agency focused on brand leadership through media relations.
Crowdfunding has seen many outrageous successes over the last decade during its infamous rise in the consumer products industry. Everything from the Pebble Watch to the Coolest Cooler and even potato salad has funded successfully on Kickstarter, giving people hope that anyone can be a winner on this intensely popular platform. However, it isn’t that easy. According to Fundera, the average success rate is merely 22.4% of crowdfunding campaigns across all platforms. If you look individually to Kickstarter, it goes up slightly to just over 37%. In reality, the odds aren’t that great.
This doesn’t mean you have to give up your dreams of launching the next smart home system, waterproof floating Bluetooth speaker or must-have iPhone accessory. It just means you have to take a deeper look at what makes a successful crowdfunding campaign tick.
Campaigns are very different based on their value propositions — however, in my experience helping clients with PR and crowdfunding campaigns, I’ve discovered essential components that are carried across all successful campaigns.
Start with a great idea/product.
The base of any campaign is going to be a good product. Nothing will work if you don’t have the “stuff” to back it up. To achieve the viral effect of the most popular crowdfunding campaigns, the product should be something that meets a current and timely need. If your product already exists, it needs to have the essential PR credo of first, better or best.
The first, better, best approach ensures that your product or campaign will have a “wow” factor for your target audience to be drawn to. If you don’t have this essential characteristic, your chances of success is highly limited.
Build your crowdfunding tribe.
It is a great misnomer that crowdfunding platforms come with an audience just waiting to crowdfund your next campaign. The truth is that while the crowdfunding community is truly a group of early adopters, the real early backers of your campaign are the people you already introduced to the product. Thus, it’s important to introduce and start getting product fans early. Building your email list is an essential component to successful crowdfunding campaigns — maybe more important than any other part.
An important credo us crowdfunding folks go by is the “rule of thirds.” This important guideline gives you insight on how to prepare your crowdfunding outreach. One third of your crowd comes from your “essential email list.” One third comes from your PR and marketing efforts, and if you finally get to that last third of building your audience, you’ve reached the viral point where crowdfunding starts building itself. However, it is critical to know that the first two parts of the funding process need to be reached as early as possible. The earlier they are achieved, the more successful your campaign.
Present your company story or narrative.
Is there something unique about the way your business started? Do you have validation and credibility with experience? The narrative of the story is just as important as the product that you’re crowdfunding. Presenting your company story in a unique way is important in getting interest from your backers. Being both entertaining and credible will help your audience believe in your goals — which leads us to the next component of setting realistic goals.
Setting a campaign goal is much more complex than it seems. The campaign goal is a calculated number with various factors that will make your campaign successful. Despite initial ideas many campaigners have, crowdfunding is not the way to generate revenue. Crowdfunding campaigns validate your idea and provide the resources to get it off the ground. It is important to come up with the right goal amount so that you can set expectations for your community, fulfill your goal and create a more sustainable plan for your product development.
When all of this is said and done, preparation is the ultimate key to a winning crowdfunding campaign. When you are ready to launch, you should feel very confident and be in a position to meet your funding goals — and if you aren’t, then you may need to spend more time building your audience or your narrative. Crowdfunding outcomes aren’t as unpredictable as many people perceive. Once you’ve planned thoroughly for a successful outcome, you’re ready to look past your crowdfunding campaign and start thinking about building your business.