Momentum / breaking news /
Here’s where we are at right now: Last year, the total amount of money raised through crowdfunding projects exceeded that of venture capital - There is more money, going to more projects, through a distributed funding ecosystem, than the whole lot of million dollar checks going out from the accredited investors realm. - how many of you have backed a crowdfunding project? People are more curious than EVER about entrepreneurship, and they are willing to PAY just to have a behind the scenes view of getting funded and developing a project.
The fact that shows like shark tank and silicon valley even exist at all is a testament to the huge influx of interest surround all things entrepreneurial.
70% Failure Rate
But here’s the deal: 70% of crowdufnding campaigns that get launched actually FAIL. It turns out being first to market is a lot less important than getting every last person only your lit verbally committed.
Seth Godin was recently quoted in a video interview trying to quell the rush of excitement around crowdfunding. “It shouldn’t be called Kickstarter. They should call it Kick Finisher. It only works when you have everything lined up ahead of time”
Over the last nine years I’ve been in the trenches of this rush, running campaigns, helping develop the audience organization principles that are part of our pre-launch conversation, and now it’s clear that we’ve created a dedicated system, applying old-school logic to new-school audience challenges, and it has catapulted my projects through to more visibility, Since that first failed event in 2009, I’ve now worked with project creators to use one on one conversations and personal relationship building to raise over $13 million dollars through crowdfunding.
What makes me different and better?
Plenty of other people in the crowdfunding industry are claiming that they can do “performance marketing” to generate “qualified leads” for your campaign- for a fair chunk of money they’ll promise you a list of five thousand or ten thousand verified emails of people who have walked through a jumble of ad clicks and internet opt-ins, or been harvested from linked in, but trust me - I’ve had clients work with these companies also and I’ve got to tell you: even the most “qualified” leads that come in via performance marketing aren’t going to convert at even one tenth as good as the people who you already know and love in this life, regardless of what your project is.
Instead of being like other performance marketing companies and telling you to point ten thousand dollars worth of ads to your opt-in landing page and hope for the best, I’m here to show you a more grassroots approach that relies on your personal networks, to engage with the people you already know, to create social capital and then at the right time magnetize the resources of success you need.
Projects I work with have beat the industry success average by 350% for 5 consecutive years, and when I have a client who works with me as the same time as the other companies, they always come back and say - you know dude, more than the PR, more than the list of “engaged subscribers” that we bought, you’re friends and family support system generated way more immediate and meaningful revenue for our project on our launch day.
So here are the three tactics, let’s just sit back and relax and I’ll show you some examples where we saw the most success - my advice is for you to have a pen an paer, because more likely than not if I’m showing you an example, it’s going to spark a message of inspiration in you, you can write out things your seeing and creative Ideas you have.
Problem / Situation:
So here’s the situation: The crowdfunding industry is a mess right now. In addition to the 70% failure rate, those that do succeed the average onlyby $9000 earnings. $9,000!!! This means that all the famous $200k crowdfunding projects are a tiny percentage of the ones who you never see or hear about.
For most people, crowdfunding kills their idea rather than kickstarting it, and it is a haven for public embarrassment, exorbitant costs, and mistakes.
Take mobovida’s egregous failure - These guys we’re an established company with possible 50,000 email contacts. They payed me top dollar to create a video and page for their campaign - the video is amazing, high quality, very compelling. I thought it was going to be huge success.
And they couldn’t even drive $10k. It didn’t matter how good their page looked, or how energizing my video was. They were relying on false hopes from their weekly simple newsletter list and had a total misunderstanding of how to work with thousand people that opt-ed in on the product specific landing page.
After two weeks of losing a bunch of money on ads, and only ending up with a few orders, the we’re horrified, they decided their project was no good and they took it off the shelf, even though I was urging them to reach out to there personal networks for months before they went live. This is a perfectly good project, with great market - why did they kill their idea? Was it really proof that the market didn’t want it? They might think so, but more than that it’s proof that newsletter marking and ads don’t convert for crap. This is a company with a 20,000 general product mailing list, and they even got 1,500 subscribers to opt-in to the product specific preview page “tell me when it goes live”, and they couldn’t even drive $6,000 in pledges in the first 24 hours? Let alone the first week?
Here’s where they failed:
-they thought customers we’re the same as friends
-they relied on promotional email to communicate about the project
-they expected extra traffic from the platform (no one came from Kickstarter)
-they expected that their facebook ads would convert (they didn’t)
-they thought the opt-ins from their mass newsletters we’re a sufficient confirmation of interest
-they never once asked anyone in their personal friends and family network for a hand
I’m willing to bet that this page saw no more than 3000 visitors during the life of the campaign, and the 59 backers they actually got is a really solid, industry standard 2% conversion rate from the category of “people who feel no actual connection to you”. It wasn’t a content problem or a product problem. It was a friends and family problem.
If the owner, the CEO, and the marketing guy had all organized their communities around this, and if they had done a personal research campaign on their highest engaged subscribers and their small grassroots list, to try to renew social capital, even if they only had 1500 contacts between the two of them, all of those email conversations would have converted at 30%-50%. That’s how different a warm relationship is to some who knows you through an impersonal newsletter.
A story of success
Here’s a totally different story. Brian at AXIUS worked with me to create their campaign, he got the same great video, the same great project page. But he followed our marking strategy to a T. He happened to be a college athlete in is prior years had accumulated a significant amount of random Facebook friends who were his fans. Instead of marketing to them right off the bat, he exported their emails from Facebook and merged them with his contacts. Then he ran the whole batch of 6,000 emails through our personal messaging procedure, first building social capital and using permission marketing in a one line message saying “hi how are you, thanks for all your support thies last years, I’ launch something cool soon, can I sne you a link when it’s closer to being read? I’d love your thoughts and feedback” . A two line email with a yes or no question. The subtext of this email is - Hey , i know you are just a random friend of mine, but are we close enough for you to write me back and anser a simple question? only after their response would he be willing to send a link to his preview page. He was flooded with replies.
Finally two weeks later, after asking for review and advice of the preview link he asked 6,000 people a direct question : can I count on you to become a backer during our launch day? Again, a flood of replied came in. Every was in the now. They felt a warm connection with Brian and they though it was cool that they were included as advisors on the project.
Then came the launch day. I woke up with m hands shaking. My jaw dropped when I saw it. $65,000 in the first 18 hours!!! Unbelievable!! And it kept going. A week into it he brought in an ads partner and ended up grossing $260k, the cumulative outpouring of support he saw from all friends and family was astounding. Beyond the monetary funding He had unheard of resources come through, and lined up distribution partners and wholesale deals on the side, and his business has been sailing ever since.
Don’t get me wrong. Actually talking with 6,000 people can be hugely time consuming. It was. Before he went live, He was getting thousands of replies from each of his mailings and it was a full time job managing the communications. But he and his assistant loved it because although it was time consuming to reply to everyone, he was astounded at how nice it was to reconnect with some old friends and to hear about their lives too.
via his emails, the way Brian at AXIUS treated me and everyone else leading up to his campaign made me feel like a special and crucial part of the process really special. I gave him $250 on the launch day and waited ten months for the thing to arrive, but at the end of the day I became a backer because I appreciated our connection. I felt so included in his process and I got to celebrate his success with him. He took me on the backside entrepreneur ride and I got to enjoy the trials, discoveries, and challenges along with him.
That’s the power of warm connection. It grows and grows.
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Here are a few other examples:
Dreamed Pillow - followed the principles bust used insert via direct email to their past customer database, got an article in marie claire, raised $190k, and after that someone from Target found them, they negotiated a deal and now have national distribution
Baubax Jacket - raised $9 million from 400+ articles that people all over world wrote because of viral lift on share day and one article in can, and the way the founder used his business school cohort to beta test while they were all in session, his launch team wear all highly organized and committed to the task, the founder got $45k purchases in first 5 hours. Do you have any idea what it took for him to organize his whole class year for that?. Now that the jacket made it he got distribution with Brookstone in airports all over the world
Here’s another example:
Wallet buckle - Raised $44k from only a few thousand past friend and customers, then got a private invitation from shark tank from their crowdfunding campaign, and got on the show and saw massive orders from the publicity. They also spend $10000 on ads and PR that didn’t even pay for itself in sales , at the end of the day he said michael, your approach was the only thing that got us the backers, ads and pr cost a lot and didn’t return much
FlexR - Raised only $26k through crowdfunding for a highly niche product after spending tons on his manufacturing design costs and even hiring two agencies for the project: even though the niche didn’t buy in all the way, his pitch and project page we’re so nicely put together that it allowed him to attract an investor receive a half million series A funding. Front door struggle, back door success.
Anyway, I show you these examples to get you excited about what is possible with a well situated campiagn, and now I’m going to go into into my key teachings and what actually went into makes a campaign marketing tick
Syncroniciy book - My fiancé wrote a book this year. She did no ads, no PR, just a handful of rinstgram referral partnerships and our four pre-launch messages. And she drove $10,000.