From Idea to Successful Crowdfunding

Funding through the crowd, that sounds incredibly appealing to many startups with a great idea but insufficient financial resources. After all, they have spent a long time refining an idea, and it is innovative and clearly recognisable as 'The next big thing' at first glance. But is this enough to launch a successful crowdfunding project?

It seems deceptively easy to set up crowdfunding campaigns on Kickstarter, Indiegogo and similar platforms. You just need to wait for supporters, known as backers, to recognise the potential of your idea and, filled with enthusiasm, pull out their credit cards. Spoiler alert: there are rules, even or especially in crowdfunding, that quickly determine success or failure.

Building a Community Before Launch

Weeks or months of preparation leading up to a single point, the go-live, is familiar when implementing digital solutions, web projects, and similar. Social media promotion is in full swing, and a countdown has been added to the Coming Soon website. Expectations are accordingly high; you can barely wait, preparing for the rush, and then... NOTHING happens. Google Analytics shows in real time that only a few visitors find their way to the website or campaign page. Disappointment sets in, and panic-driven action can follow. Because unlike a regular website, a crowdfunding campaign, usually limited to about 30 days, becomes a race against time. The first few days are crucial. A successful start builds trust in your project. Services like Klicktraq provide continuously updated forecasts about campaign success, and nobody wants to invest in a doomed project. Especially in the early days, it is important to activate the super-backers. These are supporters who have already invested in many ideas and are considered strong multipliers.

However, to achieve a rocket start, preparatory work must be done. Rarely does a product simply take off; a lot of work goes into it. The most important rule, therefore, is: the launch (of the idea or product) should never coincide with the campaign. People need time to engage with the offering, get to know it, ask questions, and develop interest. It is therefore important to have at least a rudimentary website explaining the product or idea, publishing updates via social media, and offering a newsletter signup on the website to inform potential interested parties punctually for the Go Live. This allows you to build a base of potential backers in good time.

Selling Stories, Not (Technical) Details, Through Storytelling

It all starts with the story. People are also interested in the background of an idea. How did the product come about, what are its applications and use cases? You cannot emotionalise with technical details; people need to be engaged with a story, and a clear added value must be communicated. Almost every idea – from software to product – has a story that needs to be remembered. How did the implementation come about again, what set things in motion, and what is the common thread in the story? An interesting story enriched with emotional imagery helps enormously here. We have already summarised our thoughts on storytelling in this blog post.

Once all these questions are answered, it is time to focus on the video, the central element of every campaign. This conveys in a few minutes why a product should be bought. Campaign videos are clicked several thousand times on average, so it is really worth investing money here to make the video as professional as possible.

Mini Pitch to Journalists and Bloggers

The groundwork must be done in advance, meaning which media to approach, which journalist is responsible for the relevant section, and ideally, you have also taken the trouble to research and reference a few thematically relevant articles. Every cover letter is a mini pitch, where you only have a few sentences to convince of the product's innovative power. Editors of major media outlets like Mashable, Techcrunch and others receive thousands of emails daily, so it is important to stand out from the crowd through personality.

Even if it hurts: the wish for an idea to go viral is pious for many marketers, but it rarely happens and hardly on command. Hardly anyone learns about an idea just because it is good. On platforms like Kickstarter, thousands of projects run simultaneously, almost every one promising to be unique in its field. A press release that communicates real benefit rather than self-congratulation is therefore part of the standard repertoire of communication work. To achieve the greatest possible awareness, it is always recommended to communicate in English. Needless to say, further languages can be added if required.

First Impressions Count

A crowdfunding campaign is no different from a website. A concept should be developed in advance that clearly covers the needs of visitors. What do they expect from the campaign, where is which information presented, and how is it visually prepared? The more professional the campaign appears, the more willingness there is to support it. A campaign adapted to the corporate design is mandatory; if no corporate design exists yet, this is the best opportunity to create one. Because even after the campaign, things must essentially continue immediately.

High or Low Funding Goal?

The crucial question that determines everything is: how high should the campaign's funding goal be set? It is important to note: platform providers also take a cut. Up to 10 percent of the achieved goal must ultimately be paid, partly around 5% to the platform operators and partly between 3 and 5% to the payment provider. If you also rely on support from external backer services, such as Backerclub, Backersnation or Krowdster, with additional discounts for backers, you must also keep in mind that more than a third of the funding for production start or implementation may be deducted.

Even if it seems illogical at first glance, the funding goal should be set low for several reasons. A low goal is reached faster, which in turn affects visibility on the platform itself and, on the other hand, generates further trust and recommendations for the product. The first few days – as mentioned at the outset – are not only crucial but largely determine success. If you do not reach at least one-third to half of your goal within 10 days of a 30-day campaign, the forecasts quickly worsen, which in turn affects willingness to support. But how can this be prevented?

Developing Attractive Pledges

Pledges are the offers in a campaign. These should match the company's pricing policy and target group and correspond to the product. Asking EUR 100 for a phone case seems incredible, just as you would not sell a high-quality product for a few euros. It is important to present offers that create an incentive. Particularly attractive specials can also be limited to a predefined quantity. This further encourages early backers to secure one of the coveted items immediately. If 30 out of 50 available items are sold out within a few days, this has a positive effect, as does a staggered pricing policy. Additionally, a graphic explaining the pledges clearly should be included in the campaign. Which combinations are available with which quantity and what is the saving compared to the subsequent retail price. The main focus is on the combinations, quantities, and the associated savings that can be taken advantage of with an immediate purchase. Plan for stretch goals. And if the dream comes true and your campaign is funded within hours or days, the question inevitably arises: what now? The campaign may still run for 20 days, but you have no idea how to fill the time. Therefore, you should consider in advance what you can offer backers to remain attractive. So-called stretch goals are perfect for this. These describe product extensions. In a campaign we implemented for the jet engine SCUBAJET, the funding goal of EUR 60,000 was reached in 4 days; the stretch goal at EUR 100,000 represented the standard integration of an LED light. Backers are multipliers; if the stretch goal is attractive enough, they talk about it and help achieve further goals/stretch goals or even provide new input for such.

Responding to Questions and Needs

Flexibility is key, and you can expect several messages, comments, and emails with questions to appear daily. This generates valuable input and reveals new perspectives or potentials for the product/idea. This naturally takes time, which you should always take. Not only to secure your funding, but often tips are included that can determine your success. Moreover, it shows appreciation towards your supporters, who ultimately believe in the idea, to meet them with an open ear. Often they contribute significantly to product development or provide important impulses for collaborations. Communication at eye level could be the essence of this, for example.

And What If Nothing Helps?

Of course, there may come a moment when you realise that your campaign, despite all efforts, is doomed to fail. Because you chose the wrong language, the funding goal was too high, no community was built, there was not enough time to create a design, or because a competitor suddenly appeared. All these factors, as well as the right timing, with a dash of luck, decide between success or a premature end. Better than stoically watching the ship sink is to end the campaign early, hit reset, and start over. What to consider and how to turn a failed campaign into a success story can be found in the second part of our blog series on crowdfunding.