There once was a guy that had a really great, creative idea and wanted to crowdfund the production of his idea on Kickstarter. The people he talked to genuinely believed it was a great idea, and were happy to support it. He had some film-minded friends help him make a kick butt video. His story was heartfelt and impactful. He worked diligently to rally his friends and family. The campaign got some traction, but as those final hours ticked away, he realized he was not going to make his goal. The time ran out in deafening silence and inactivity. While some crowdfunding platforms, namely, Indiegogo, give creators the option of taking what they earned, on Kickstarter you either make your goal or you get nothing. Exhausted and defeated, this much deserving creator with a worthy, genius idea, walked away with squat.
This story is all too familiar for creators and fans of Kickstarter or friends of specific creators. So I'd like to take a psychological approach to putting your best Kickstarter foot forward, kind of like self-defense for creators wanting to see their dream come true.
Talk it Up, Don't Be Shy
Before even submitting to Kickstarter, there is a lot of pre-work you should do upfront. The obvious set of actions is getting your Kickstarter content ready: your all-important video, your written message (your story), your bio, and the rewards. We'll get into some of those later. The thing that Kickstarters seem to either underestimate or not realize at all is making a network of connections to support your Kickstarter. I think more recent coverage has dispelled the myth that Kickstarter is a magical fundraising land where random donors drop out of the sky and send you unsolicited money. Most people get it now, that you have to assume you're driving all the traffic to your Kickstarter page on your own. The likelihood that Kickstarter will feature you on any of their main pages is incredibly low, it's best not to count on it ever happening. The key, then, is building your list of contacts and preparing your followers for your Kickstarter campaign before you even hit the launch button. Once the campaign starts, it is your sole responsibility to drive traffic to the page and solicit every single donation. Most successfully funded campaigns make it by tiny margins, whereas most failures miss the mark by a lot. Be ready for an intense, non-stop flurry of activities to reach your goals.
Before you can begin driving traffic to your Kickstarter page, you have to get over the hurdle of Kickstarter's approval process. Some crowdfunding sites, like Indiegogo, allow anyone to submit virtually any project and have very low barriers to entry. It might seem easy to get approved, based on the sheer numbers of Kickstarter campaigns going on. What you don't see, however, is how many projects are rejected and for what reasons. There are some crucial criteria that Kickstarter doesn't explicitly come out and say. Most importantly, they want to see that you can deliver. What that means is the following:
- You have a background in a related area as your project, and you have experience. Kickstarter is looking at your credentials for evidence that you can deliver what you say you're going to do.
- You have a team. Kickstarter knows that going it alone is not only difficult, it often spells failure. Software projects have been rejected for lack of a development team, for example. Make sure you show that you have other people contributing their unique talents in addition to yours.
- You have a product, or something very close to it. A napkin sketch isn't going to cut it; depending on the type of project, the closer to the final thing, the better. Finished song recordings, filmed scenes for your movie project, CAD drawings and a manufacturing plan for physical products, a prototype for software products, are all far more likely to be approved than an idea, a drawing, written lyrics or scripts, etc.
In this respect, the name Kickstarter is a bit of misnomer. It's not here to make your wildest dreams come true; it's used for wrapping up and closing out the hard work you've already done towards a specific goal.
The good news is that those credentials that get you through the Kickstarter approval process are also the same credentials your backers are looking for. They, too, want to see that you can deliver. If you talk up your expertise in the area, people will naturally believe that you are an expert in that area. In TV commercials, actors who have played doctors on popular shows are perceived subconsciously as medical experts. Actors dressed like doctors also have this effect, and just claiming a title of doctor causes people to believe and act on the belief that the person is an authority in medicine. Now, I am not encouraging misdirection of any form, rather, I want to encourage you to play up your expertise. Use the titles and credentials you have earned, dress the part, and tell people why they should listen to you.
One other tactic to consider is to prepare your networks before launching the Kickstarter campaign; provide education on what Kickstarter is. Many Kickstarter campaigners were surprised to find out that they had would-be backers that either didn't understand how to donate or weren't really sure what Kickstarter was all about. So the most important pre-work you're going to do is to build your list, and the next most important pre-work is socializing Kickstarter with your potential backers (especially those that may be less tech-savvy, like your Mom's bunco group).
Putting yourself and your dream out on Kickstarter is a very scary way to get validation - you have the potential to be completely and utterly rejected in the public eye. Thus, a risk averse and conservative approach to time limits tends to lead creators to lean towards a longer Kickstarter campaign. Quite to the contrary, statistics show that shorter campaigns, in the neighborhood of 21 to 30 days, are more successful than 60 day campaigns in achieving their goals. In fact, Kickstarter, wanting to see as many projects succeed as possible, did away with their option to go as long as 90 days when they saw how few projects succeeded with that length of time. One very logical reason for this is the notion of scarcity. When you chart daily fundings through a typical campaign, there is a lot of activity around the first few days, then a valley of low activity, and then a surge in the last three days or even in the last 10 hours. The feeling of potentially missing out is a compelling one that gets people off the fence and moves them to action.
Likewise, there is value in limiting certain rewards offered; as the number of backers approach the limit, it makes those rewards seem more valuable. It is also prudent advice to limit the rewards that require a lot of your time and attention. Don Steinberg, in The Kickstarter Handbook, recommends offering no personalized or customized rewards for less than $100. Remember that your time is valuable, too, and the more time dedicated to fulfilling special rewards, the longer it will take to complete your project.
Have you ever been to a Tupperware party, or a Pampered Chef party, or something similar? These seemingly fun ways to make a little extra cash for the party host turn the power of liking around on us: we buy Tupperware or kitchen utensils because we perceive that we're buying from a friend and helping her out. We don't realize that these are just marketing tools for Tupperware or Pampered Chef to sell to us. The same is true of Kickstarter: expect that nearly 100% of your backers will be people in your personal networks. What's interesting is that most successfully funded projects had no backers directly related to creators; instead, it was the tier 2 or tier 3 relationships that provided the majority of the monies. In other words, your closest family and friends may not back you, but their friends and family are likely to. So play this one up: tell your friends and family to share the message, even script it for them to make it easier to share.
Whether we like to believe it or not, there is a psychological part of us that prefers people that are similar to us, and those who are attractive. Most successful Presidential candidates are good looking people, less attractive Presidential candidates have rarely won. Likewise, putting an attractive person as the face of your campaign is a good idea. Steinberg calls this the "cool guy/cute girl factor". You also generally want the face of your campaign to relate to your audience (unless you're going for a shock factor, which is a different strategy altogether); so if you're targeting recent college graduates, don't use a 50 year-old man, use a 20-something.
Another way to win potential backers over is by complimenting them. Cialdini's discussion on a car salesman revealed that even something as impersonal and obviously geared towards selling cars as being the recipient of one of thousands of cards in the mail that said, "I like you" was able to enhance the car salesman's reputation and boost sales significantly. So while our intuition tells us that making it personal is best, an impersonal tone of congratulations for finding the Kickstarter website and telling them how awesome they are may still be an effective tactic. Watch the first 20 seconds of Freaker USA's Kickstarter video (http://www.kickstarter.com/projects/freakerusa/freaker-usamaking-you-and-your-beverage-cooler) for a good laugh and a hilarious application of this power of influence.
11% of projects go without receiving a single pledge, but 81% of projects that get to 20% of their goal end up reaching their funding goal. This is no coincidence; we look to what others are doing for validation. In talking about Venture Capital funding, a common analogy used describes being the first penguin to jump into the water where predatorial walruses may be lurking. They need to get in the water to eat, but they want proof they won't themselves be eaten. Once you get one penguin to jump, and he comes out alive, the others will jump in with confidence. If you think of crowdfunding as an extension of venture capital, you can imagine how important momentum is. Getting over the first hurdles, the very first pledge, the first 10 pledges, the first 20% of your goal, serves as evidence that people believe in your project, validating your project with social proof, and thus encourages a potential backer's willingness to donate.
Of course, your first backers won't have the privilege of seeing the momentum of the pledges. Testimonials of people similar to your target market are a good way to give your project authority, social proof and a likability all at the same time. You can also achieve this with associations and partnerships that appeal to potential backers for the same reasons.
Creators are strongly encouraged to provide updates throughout the campaign and after being successfully funded. The updates can work for you in a multitude of ways. First, they give your backers a sense of involvement and make them feel closer to the project. By keeping them engaged, they are more likely to mention the project in conversation or recommend it to their networks. Second, you can use your updates to share the momentum and traction your project is getting, which further validates the backers' commitment with social proof.
Reciprocity and apparent concession
Doing things for others creates a sense of social debt that needs to be repaid. Offline fundraisers and sales people have used reciprocity tactics successfully for years: giving a flower to a passerby leads to a donation, waitresses giving extra mints get bigger tips, and providing samples of food leads to purchasing that brand's products. The same is true of online fundraising; giving a little can mean getting a lot.
You can use reciprocity and the contrast principle together for an apparent concession. By asking your friends and family to donate money, and then following up with a request to share the link with their friends and family if they cannot pledge, the retreat to a non-monetary favor shows a concession on your part, and compels them to reciprocate with action. Again, very few people related to you will end up giving you money, but if they ask their friends to help you out, you have a much stronger chance of making your goal.
Value perceptions and the contrast principle
When you give something away for free or too cheaply, people automatically associate the item with low value. "You get what you pay for," is so ingrained in our minds, that steep discounts actually turn potential buyers away. If you set the price a little higher, you will attract people who want a valuable product.
The average pledge amount for all campaigns is about $71. This is much higher than what the typical backer pledges, which is in the $11 to $30 range. This means there are a small number of individual backers in some campaigns that donate a lot, like hundreds or thousands of dollars. It is important to separate out these two distinct statistics, because your projects may not be average or typical.
A rule of thumb is that your most popular reward level is going to be the one that offers "the thing" that your project is producing. So if your project is an album, the reward level that gets them the album is going to be the most popular, which may be around the $10 to $25 range. But if your project is the newest and coolest 3D printer, your backers are more likely to give you the amount that gets them one of their own, which is most likely in the hundreds. So think carefully about how cheap you want your thing to be offered at. If you set the point too low, it will take a lot more backers to get to your goal. Of course, there are always contrary examples, the best to my knowledge being when Freaker USA offered its backers their product for the $1 reward level. They got creative with the other rewards to compensate for such a low requirement to get the thing. Their campaign was brilliant, and hugely successful.
While you don't want your rewards to offer the thing too cheaply, you also want to make sure your backers still see value in it. Generally speaking, you want to offer it at a discounted price, cheaper than they'll be able to buy it later. It definitely should not be marked up; they are pledges, not charitable donations. You can then create higher reward levels where you add in additional features, special Kickstarter-only packages or personalization that go above and beyond the thing you are trying to produce.
There are three pieces of good news about rewards that I think are overlooked. First, it is easy to test the rewards with your followers before launching. Sure, giving you advice is not the same as writing you a check, but you can at least get a feel for what they like and what they don't and at which price points, before you finalize it with Kickstarter. Second, rewards can be limited during the campaign. Once a backer has picked a specific reward, you cannot change what that reward is or how much it costs, but you can put a limit on it. This means that if you've reached your goal or you've started to realize that one reward is getting so much action that it'll take you forever to fulfill, you can limit the number of people who can claim that reward, thus limiting your future commitments. Third, rewards can be added during a campaign. While too many choices up front can make it difficult for a backer to pick, it is a good idea for you to have planned backup rewards in case the thing really blows up and you find yourself needing to open up more reward options. Adding rewards (or even loosening the limits on popular rewards) also gives you a very good reason to provide updates to your networks and backers, too.
A great reward strategy that encourages early participation, and thus, starts the momentum, are what Russel Garenhan called early bird specials. In talking with him I have noted that he had limited rewards that were identical to slightly more expensive rewards, except that had a small limit on them, like 10 or 15 people. "You gotta do that," he explained. "It puts pressure on the early people looking at it."
Without taking video quality or content into consideration, the empirical evidence is clear: you should have a video. Michael Neel's post "Kickstarter Stats You Can Use" shows that projects with a video of any kind have had a 52% success rate, while those without one have a 35% success rate (http://www.vinull.com/Post/2012/07/25/kickstarter-stats-you-can-use.aspx). That being said, what goes into your video is still more important to being successful.
Chris Kocek posted a slideshow of "Kickstarter Best Practices & Next Steps" (http://www.slideshare.net/ckocek/kickstarter-best-practices-and-next-steps-10-1611-slideshare) in which he defines some elements of successfully funded Kickstarter projects, including a clear, concise product description "in less than 200 characters". I would add to this that your video needs to have a hook in the first 20 seconds to keep a potential backer engaged. Kocek also lists "well-lit photos/videos of the product in action" as a critical element to success. You don't necessarily need to hire a full professional production crew, but good video footage and editing are important. Put yourself in the backers' shoes, if the creator isn't willing to put the effort into a good video, would you pledge money? Chew on this: the top funded category on Kickstarter is film; they know how to make a compelling video and tell a good story!
Make sure your video has a call for action, with very clear steps on how to donate. In the very fortunate case that your video goes viral, its viewers will not be seeing it in the context of a Kickstarter page. This could become a very unfortunate scenario if your backers don't know by the video's content how or what they can do to help. Thus, you need to make sure to tell them to go to Kickstarter and pledge before its too late. Be direct and explicit, ambiguity leads inaction.
How much to ask for
Several funded projects have lost money because they failed to account for just how much every aspect of the Kickstarter project would cost. So it is definitely prudent advice to spend a good amount of time working through all aspects of costs that impact the project, including fixed costs related to the project (website, PR, advertising), the cost to you of the actual rewards, the cost to ship physical rewards, including international shipping, and the Kickstarter and Amazon fees (plan for 10% total to be taken off the top before you even see your money).
So on the one hand, you want to make sure your costs are covered. It is also interesting to note that, because successful projects usually only make their goals by a small margin, there appears to be some psychology that discourages potential backers from helping once a project is funded. Thus, if you reach your goal in the first three days of a 30 day campaign, there isn't much more action to be had. Kickstarter backers want an element of a challenge or gambling; when its sure to be funded it isn't quite as interesting.
On the other hand, you don't want to be too greedy. Many failed creators have lamented that their goal was just too high. Garenhan learned this lesson with his first Kickstarter campaign, "I got a little greedy with the goal.... Basically, my first goal on that project was set to where I wanted to get it to make it worth my while to do. You know, and I was being ambitious. But it had no basis of what it costs me to actually produce the hangers." He then launch a new campaign for the same product, with a goal that was lower than the cost of a first manufacturing run. It was a calculated risk that paid off, and the project was funded 310%. It was risky, he admitted, but a calculated risk: if he made the goal and not much more, he could provide the rest of the upfront money needed out of pocket to get the inventory that he could sell to Amazon. "I didn't really make any money off of it, but I had inventory."
This seems to be the sweet spot for Kickstarter goals. A Kickstarter campaign is intended to cover the costs needed to finish the project, not to give you a handsome profit. Kickstarter customers seem to be savvy enough to not get suckered in to supporting projects with overly ambitious goals. After the 7 - 10% fees are taken off the top, most of the products sold are going to be nearly at cost.
While, of course, nothing can replace great ideas, unique marketing approaches, and awesome connections, the above components could mean the difference between getting funded and barely missing the mark. Good luck and happy creating!