Wednesday, 6 November 2013

Things Learned From My Kickstarter Campaign

I was recently (Nov 5, 2013) part of a panel on Crowdfunding organized by CAPS at the University of Alberta.  It made me reflect on some of the things I learned in the process of my own Kickstarter campaign (which was successful and shipped all rewards on time).  I have a few things to share with anyone interested in launching their own crowdfunding campaign.

These observations will be related to projects that create products and deliver them to backers.  I made a campaign to fund a small production run of modern art clocks my brother designed.  Here are some things I have to share for anyone considering doing something similar:

  • Be at least at the point where you have a functional prototype of your product (usually this means one working hand-made unit).  This will give you an understanding of what's truly involved in making them.  You will need this knowledge to decide a goal amount.
  • Decide what you'd need to make 10, 50, 100, or 1,000 of your products and be as detailed as possible.  Figure out how much it would cost.  Don't forget things like tax and shipping costs for any parts or raw materials.  This will give you an understanding of your costs.  Don't forget the cost of shipping things to backers, too!  
  • If figuring costs is all new to you, look up information on how to calculate Cost of Goods for some guidance.  It won't all be entirely applicable to your crowdfunding campaign but it will help you understand the process and - more importantly - will help make sure you don't miss anything.  This is super important for a campaign where you're building and shipping physical goods, because being off by 5$ per widget and having 100 backers means you're $500 short - which could leave you in a very embarrassing (and expensive) position.  You won't just be short some labour meaning your project is late - you'll be short actual money that you need to buy actual parts.
  • Once you know your costs, you can decide how many backers you feel able to handle and how much it would cost you.  With this information you can decide your campaign's goal. Aim for the smallest goal that allows you to go forward with your development.  
  • You can limit numbers of rewards.  More isn't always better - perhaps you'd be delighted to get 100 backers for your idea, but you might not want 1,000 backers.  Sure, it brings more money but perhaps you want to do something other than assemble circuitboards every evening and weekend for the next 6 months filling all those orders?  If your idea is a success and the demand is there, you can do another production run with an improved design afterwards.
  • Have interest built up before you launch your campaign if possible.  Let people know what you're working on.  Share it in any online communities you're part of.  Let them know when you launch.
  • Once you have launched, the caring and feeding of your campaign will be at least a part time job in and of itself.  People will want to feel you are available and understand what you're getting into - when they ask questions, you should be available to answer them in a timely fashion.  Be honest and transparent.  "I don't know yet, but I will find out" can be a reasonable answer to a tough question.
  • Research similar campaigns and what they did.  You can learn just as much (if not more) from failed campaigns as you do from successful ones.
  • You will get a fair number of people contacting you offering a variety of services.  Know what you want and need.  In my campaign, if a message wasn't blatant spam I took the time to reply and I was always up front about what I knew I needed and didn't need.  This led to some interesting discussions with some interesting people that I'm glad I had.  I might not need their help with this project, but I might want to talk to them for the next one.
  • Use the tools Kickstarter provides to communicate regularly with your backers. When it comes to campaigns that are products, Kickstarter can be used as a sort of glorified pre-orders platform.  But it's much more than that.  The development of a product - whether it's a game, a sculpture, a community work, or some other innovation - the process of bringing it to life is itself a product, and people want to be part of it.   That's a big part of why they're funding you in the first place, so be sure to let them know what's happening every step of the way.
  • Use the information and tips Kickstarter provides to make a good pitch.  Kickstarter has resources to help you make an effective campaign.  They've done this before and want to help you succeed.  Use them.
  • Use tools (like custom URLs from bit.ly) that let you gather data on what is and isn't working.  You will want to be able to look at things both during and after the campaign and decide what got results and what didn't.  You want to do more of what works and less of what doesn't.  Without any data other than conviction and gut feelings it is impossible to tell what is effective and what isn't, and the fate of your campaign (and any future ones) is left to chance.
  • If your campaign is successful, actually getting the funds into your account will take 2-3 weeks.
  • If you were not successful in meeting your funding goal, find out why you failed.  Your product or idea might not be bad - it just might be in the wrong shape or form.  The Spark Core for example launched as a wifi-connected smart light bulb, and the campaign failed to get funded.  Instead of dumping the whole idea, the team instead identified the piece of their innovation that really worked and was useful - a wi-fi connected microcontroller - and offered it as the Spark Core.  It got 5680% funded, raising over half a million dollars, and is shipping by the end of this month.
If you have an idea percolating in your head that you think would benefit from a crowdfunding approach, start filling in the blanks.  Go ahead and start the process of making a campaign (you can work on it all you like before launching it) and in the process learn what you're getting into.

You don't need to be brilliant.  You just need to be careful and detail-oriented.  Chances are you can launch your idea earlier and with less than you think.