2014-04-12

Co.Labs

Advice From The Kickstarter Millionaires Club On Raising Seven Figures

We spoke with six of the tech startups who smashed the seven-figure mark to see how you can make it into Kickstarter’s most exclusive club.



If Facebook’s acquisition of Oculus Rift for $2 billion last month did anything, it cemented crowdfunding as another rocket ship for growing startups. I'm in the middle of my own hardware Kickstarter campaign, so I decided to talk to those startups that raised one million bucks or more and share the advice I got in this article. Here's what I learned.

1) Study Successful Videos

It’s almost a cliche now to say the most important part of a good Kickstarter campaign is the video. In its educational docs, Kickstarter says projects with videos succeed 54% of the time while projects without videos succeed only 39% of the time. Adam Rodnitzky and Jeff Powers, creators of the Structure Sensor, a camera attachment for 3-D scanning and CAD rendering on mobile devices, which raised almost $1.3 million, told me there's far more to it.

“[We] built an internal standard for all of our campaign assets--video, copy, image--that we felt met that standard we saw in other successful campaigns,” says Rodnitzky. He and Powers set out to raise more than $1 million and studied the projects that had succeeded.

“Most people thinking about a crowdfunding campaign are already aware of the importance of the video. For us, we saw it as critical to our campaign’s success--so much so, in fact, that we reshot our entire video three times before we finally felt that it was ready for our campaign. We also networked heavily to find the right people to lend legitimacy to our campaign by appearing in our video.”

Study Kickstarter videos, they say, and you'll begin to hone an intuition for it.

“We became students of successful campaigns, and looked for patterns of what they did that led to their success. In fact, we even reached the point where we could watch a campaign’s video and accurately guess how successful it was or would be,” said Rodnitzky.

2) Help People Share Your Video

But Rodnitzky notes that the video is only as useful for garnering pledges as the number of people that see it. So during the campaign he and Powers built custom tools to help their backers spread the word about the campaign to others.

“We crafted entertaining backer updates that went above and beyond what was typical to make sure our backers were informed and felt that they were a part of our journey. We even used judicious digital advertising in highly targeted venues to drive people who might otherwise not visit Kickstarter to our campaign to back us.”

While raising nearly $1.3 million would make most founders happy, Rodnitzky says he and Powers would have done one thing differently if they could do it over again.

“We had hoped to launch a second video in the middle of our campaign to beat the doldrums that inevitably happen. Unfortunately, we didn’t have the capacity to do that. Perhaps knowing our constraints prior to planning that could have been helpful.”

Image: Flickr user 3D繪圖筆 3Doodler 02

3) Show, Don’t Tell

“We crossed the $1 million mark on Day 2," says Daniel Cowen, one of the cofounders of 3Doodler, a pen the size of a hot glue gun that allows you to draw 3-D figures in the form of dispelled blue plastic, which raised a total of $2.3 million on Kickstarter. How?

“Really think about how you are going to show off your item,” Cowen says. “And ‘show off’ is very intentional here. As someone smart told us, Kickstarter is more show and less tell. Share that vision of what can be created if backers get behind you. Make sure your video grabs people in the first 20 seconds. If you don’t do that then the drop-off rate can be fatal. Have completely uninformed third parties proofread your campaign pages with a view to keeping them simple, digestible, and engaging. Don’t overcomplicate your backing levels, either. Backers need to know what they are backing in an instant.”

4) Don't Blow An Early Lead

Due to the excitement of hitting the $1 million mark in only 48 hours, Cowen from 3Doodler says he almost jeopardized the rest of his campaign.

“We almost tripped over ourselves in the early days of the campaign," he says. "In our desire to thrill backers even more, we came close to announcing a stretch goal in the form of some accessories for the pen. This would have been a mistake, and we received some very wise advice just in time: ‘Focus on your core product, and don’t overextend yourself. People are thrilled by what you are doing, and they’ll be even more thrilled if you deliver that one great product on time. Don’t jeopardize that.’”

5) Go On A Road Show

“We knew that the Kickstarter community was very active and held a level of credibility in the gaming industry,” says Jan Goetgeluk, creator of the Omni, an omni-directional treadmill that enables natural movement and creates an unprecedented sense of immersion and presence within the virtual environment. “In the five months before we launched the Omni on Kickstarter we were sure to be active across all fronts.”

Not only did and Goetgeluk his team participate at trade shows and engaged with the press and potential users on social media--they also hit the road, literally.

“We hosted a West Coast road show where I drove the Omni around in the back of a van,” Goetgeluk says. “I started in Seattle and wound my way to Los Angeles, making stops along the way and showing people the Omni.”

All of this, according to Goetgeluk, helped he and his team to prepare and build a loyal following who backed them on Day 1 of launch.

Image: Flickr user photosteve101

6) Create A Feeling Of Scarcity

But the other part of Omni’s success was almost the opposite of generating awareness. Most Kickstarter campaigns can be 30 days or longer. That length of time doesn’t necessarily compel people to back campaigns right away. Goetgeluk says the way to spur people to back you early is by creating scarcity with special time-sensitive offers that make people pull the trigger.

“It’s important to find ways to create scarcity and demand for your Kickstarter campaign, rolling out efforts such as early bird specials, limited offers, and price discounts.”

Scarcity, he says, generates early pledging, which generates increased awareness, which can snowball into hundreds or thousands of backers.

7) Try Mixing Up Your "Tiers"

The way Kickstarter campaigns have always worked--until this week--is that there are different levels, or tiers, of pledges. The more you pledge, the more schwag you usually get with the product you're pre-ordering. But no matter what, everyone always gets the main product at the same time.

That methodology went out the window this week thanks to the Micro, the world’s first consumer-grade 3-D printer that surpassed the $1 million Kickstarter funding level in just eleven minutes.

“When we hit that level so quickly it was surreal,” says Michael Armani, creator of the Micro. “We’ve definitely imagined the possibility of reaching that goal, and we had production plans in place for different levels of support, we just didn’t expect to hit it so early in the campaign. And we aren’t even 10% into our campaign yet!”

While Armani credits the amount of funding the Micro has raised (to date over $2.5 million) to a community and a consumer market of people who want an elegantly designed, low-cost 3-D printer, he notes that turning Kickstarter’s tier rewards structure on its head also spurred backers.

“We challenged the status quo by trying a different reward structure,” Armani says, “so that people who pay more money get an earlier printer. This was necessary since faster production requires smaller lots and has far more costs. It allows us to honor early backers by getting them a printer from a well-established production batch and at an incredible discount price.”

Armani admits that since no other Kickstarter campaigns had done this in the past it surprised a few backers. “The vast majority of backers were silent about it, with many people praising the shift saying that it was the most fair structure they’ve seen. Some backers had yet to appreciate our reasoning fully, but after discussing it with them it became clear that many of them appreciated it.”

But at $2.5 million and counting with 25 days to go, Armani recommends other Kickstarter campaigns try his approach. “We recommend it and anyone following in our footsteps now will refer to our success of using the reverse tier structure, and it will be less surprising to their backers.”

8) Keep It About Product, Not Profits

“Kickstarter is a great place to start a hardware business,” says Severin Marcombes, one of the founders of Lima, a piece of hardware which allows you to unify the files across all your devices. “When you're two young engineers and want to start the next Apple, investors ask you for two things before investing: to get a first product out, and to show your ability to sell it. Kickstarter enables you to do both.”

The Lima team spent nine months preparing their Kickstarter campaign. “We did 19 versions of the Kickstarter page and 21 versions of the video scenario. We also spent a lot of time packing all our R&D into a complete product,” Marcombes says.

So many versions of a campaign page and video might seem a bit obsessive, but that’s because Marcombes believes Kickstarter is a place to show off your product instead of worrying about making a profit. He believes people who use Kickstarter just to turn a quick buck are going down the wrong path.

“The best advice for me is that to start a Kickstarter campaign, you shouldn't be looking for profits. It's all about the product and the way you present it. After all, a campaign is a communication strategy. You should be hoping for feedback and for market validation more than money. That’s really where the best value of Kickstarter is.”

Lima ended up raising over $1.2 million on Kickstarter due to Marcombes’ approach.

9) Be Ready For A Full-Time Job

“The first feelings were the same for me as they probably would be for anyone in the same situation: a great sense of exhilaration and a massive sense of pride in what the team had achieved,” Phil Bosua, cofounder of LIFX says. He raised $1.3 million on Kickstarter for his smart LED lightbulb, equipped with a range of mood lighting and manipulated through smartphones over Wi-Fi.

But once the excitement passed, he says, "the next feeling was blind panic. It’s quite a responsibility to scale a company from zero to hero completely in the public eye.”

A big part of that blind panic of scaling is not just about scaling as it relates to engineering or production. It’s about being able to scale your communication efforts during the campaign.

“The campaign was definitely a full time job for multiple people,” Bosua says. “Work on our project did not stop during this time but was certainly affected for the duration of the campaign. Running these things is all encompassing.”

Matter of fact, Bosua says, “The biggest mistake we made along the way was underestimating the time and energy required to answer the hundreds of Kickstarter private messages we got every day, as well as the time to talk to press and bloggers. If I did it all over again I would set up a more structured approach to manage inbound questions.”

10) Have A Communications Strategy

Structure Sensor’s Adam Rodnitzky told me that initially, his team was "overwhelmed by the backer response and the influx of queries that came to our public wall, our private messages, our email accounts, Twitter, Facebook, et cetera." Cleaning up those accounts, setting up email filters and rules, and using IFTTT to auto-sort social messages would have been a smart move. "It took us some time to create a great response strategy that let us rapidly respond to everyone who reached out to us,” he says.

Lima’s Severin Marcombes said, “We didn't expect to have so much interactions with the backers. We exchanged about 6,000 messages back and forth during the campaign.”

But perhaps 3Doodler’s Daniel Cowen sums it up best: “As we advised another Kickstarter recently: You are in for a crazy ride. The next few days will be some of the most intense you have ever had. The next few months will be equally insane as you build not only a product, but a company. And you still won't be coming up for much air a year from now. But enjoy it as much as you can. It's an amazing ride and it's one that few get to take.”

[Image: Flickr user mmarchin]




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2 Comments

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    Loved this article. I couldn't agree more with everything they said!! Keep up the good stuff Michael!!

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