Leading crowdfunding platforms like Indiegogo and Kickstarter have democratized the fundraising process. Entrepreneurs now have a means of raising money without going down the traditional routes of bank loans, angel and venture capital investors and can avoid the risks entailed with giving up equity and control of their companies.
While there were only a handful of crowdfunding platforms when Indiegogo launched in 2008, the industry has grown to include more than 2,000 options today. In 2010 approximately $880 million was raised across a range of early platforms. This increased to $16 billion raised in 2014 and approximately $34 billion in 2015.
In less than a decade, online crowdfunding platforms have moved from being a "hot tip discovery" service for small groups of tech savvy early adopters, to a global industry which is on track to account for more funding than venture capital investors by the end of 2016.
However, success in crowdfunding relies on attracting contributors, and with hundreds of new campaigns going live each day, this is becoming increasingly challenging. If you want your campaign to succeed, you need to maximize coverage using all of the channels available to you, and paint a vivid picture of your dream which others can buy into.
I got in touch with the experts from Indiegogo to find out what they recommend and how to achieve crowdfunding success:
1. Be realistic about the competition.
One of the leading mantras of crowdfunding platforms is that the whole world benefits when everyone gets an equal shot at success. But when everyone is shouting their news at the same time, it can make it hard to be heard over the racket.
“We’ve helped thousands of entrepreneurs bring their ideas from concept to reality, which usually requires some type of promotion.” said Michele Husak, Head of Global Communications at Indiegogo. “If you want to get press for your campaign, it’s a fairly simple process but remember that not every project will be newsworthy, so keep your expectations realistic.”
A quick browse of leading platforms reveals campaigns for everything from edible insects and homemade spicy sauces, to self-defense tools and hi-tech gadgets, coming from everyone from established startups to homebrew heroes working out of their garages. Now, while it is great that these platforms give everyone a voice, it also means that your announcement risks being "dumbed down" by the amount of "unqualified" competition out there pitching non-newsworthy stories and by the sheer volume of other crowdfunders vying for media attention at the same time.
If we look at official Kickstarter figures from 2014, roughly 2000 projects were successfully funded each month. According to Stephen Heyman from the New York Times only around 40 percent of Kickstarter campaigns are successful, meaning the real total of new campaigns could be as high as 5000 each month, or more than 160 each day.
Considering that Kickstarter is only one of many leading crowdfunding platforms, we could be potentially talking about upwards of 300 new campaigns every day being pitched to journalists. Sounds a bit more intimidating now, right?
Consequently, it is important not to rely entirely on gaining media coverage through the traditional channels of pitches and press releases. To maximize chances of success, you need to think outside the box and use all of the options available to you.
2. Sell your bigger story, not just your product.
When pitching a crowdfunding story, be sure to focus on the "narrative" of your product or service rather than solely on the product itself. While it is essential to clearly explain what your product, event or service is, it is arguably more important to show a journalist why your campaign can make a positive change to the world, based on the real needs of consumers at that exact moment, with links to news articles or data which back this up.
For example, in the last couple of years we have seen a lot of edible insect projects go live. Just selling your crunchy cockroach burgers based on taste alone is unlikely to raise anything but eyebrows. However, if you appeal to a "bigger mission" related to the fact that by 2050 we’ll be nine billion people on this planet and we urgently need to discover innovative new ways to produce food in a sustainable way, you might catch the attention of a journalist and contributor.
When pitching a story to a journalist, you should always try to offer them something which can be weaved into an eye-grabbing story. Startup starts mass-producing cockroach burgers sounds, well, a little gross. Startup aims to cure world hunger with nutritious and ecologically friendly new food source, sounds a bit better, especially if it can be linked into a wider trend, such as food shortages in developing countries which are killing millions.
Michele Husak stated: “The most important piece of advice when speaking to reporters is to clearly explain why your idea or entrepreneurial journey is unique and compelling, and if you can tie that into a trend, even better.”
Sometimes your founder backstory can be as important as the product itself. For example, if you are a combat veteran who lost a leg in Iraq, who is crowdfunding a project to provide affordable bionic prosthetic limbs for mine victims, this should be pushed directly under a journalist’s nose. If you are an ex-Apple developer who is making an iPhone equivalent which will market at a quarter of the price of expensive Apple products, this should be made a main feature of your story.
3. Fish in the right ponds.
In his frank, and sometimes strongly worked blog post entitled “The press release is dead-Use this instead” Techcrunch editor Frank Butcher lambasts startups and PR spokespeople who pitch stories to journalists who don’t cover that "beat." Getting a crowdfunding story covered is hard enough as it is, so don’t waste your time sending pitches to journalists who don’t specialize in crowdfunding stories. A quick search on tools like MuckRack, Twitter or LinkedIn should clear this up easily.
While some lists do exist, finding the right journalists who cover crowdfunding stories, and in particular crowdfunding stories about the type of product or service you are pitching, requires a lot of ground-work and preparation, but this is not a step that can be avoided.
“You need to make sure you speak to the reporter like a human being, showing them that you read their stories and understand what they cover,” said Michele Husak. “One of the worst things you can do is send out a mass “form pitch” email to a group of reporters instead of sending a personal note to each person individually.”
First, start with building a list of reporters who you think might be interested in your campaign and who have previously written about your industry, similar products or any of your competitors. Then, send each of them a short but compelling email that clearly explains why you think they might like to learn more about your campaign and ask them to consider writing a story. You should be sure to personalize each email with a short mention of why you think that it would be a good fit and always be sure to use the journalist’s name.
Choose your target publications based on an honest assessment of the strength, uniqueness and potential success of your campaign. If it is your first campaign and you are lacking social proof, then focus on local newspapers and medium level online publications, rather than immediately shooting for the moon with media giants.
Michele Husak said, “Remember to start small and local -- you'll have a much better chance of securing coverage in your hometown paper rather than the New York Times. And, sometimes, the larger outlets get their story ideas from the smaller publications, so going local can be a great strategy.”
4. Don’t leave everything until the last minute.
It is best to pitch your story to journalists at least two weeks before your campaign goes live, to give them time to fit your story into their editorial calendar, but if you are going to offer exclusives you should probably start a little earlier.
That said, the most successful campaigns raise a lot from "backers" in their initial stages, so it is important to reach out to personal contacts, previous and current customers and pretty much anyone you have ever met ever to try and get them onboard when the campaign goes live. Journalists are unlikely to cover your story on the same day it launches, instead waiting until a few days or even a week later to assess the amount of early contributions received, thus offering a quantitative measure of the potential success of the overall campaign.
“Having a significant number of backers supporting your campaign early also definitely helps, so make sure you email your networks before launching,” continued Husak. “You want to demonstrate that the crowd is validating your idea by funding it.”
Crowdfunding effectively does journalist’s jobs for them, offering a measurable assessment of the importance of the product/service in the amount raised. If your crowdfunding campaign passes $1 million or is a 100 times more successful than your target figure, then pitch the success story to bigger publications too. However, pitching to the New York Times before you have received any backers makes about as much sense as quitting your job and throwing a celebratory party just because you have bought a lottery ticket.
5. Harness social media, keep backers in the loop.
Kendall Almerico from Entrepreneur argues crowdfunders should focus their attention on social media and try to motivate people to invest through these channels before their campaign goes live. When targeting on social media, try to share your vision in the most passionate way possible, including videos, team photos and regular updates about the process of the campaign, and any press coverage you receive.
“Having a video and images clearly showing the plans and where you are in the process helps tremendously, as does providing constant updates to your backers throughout the campaign and through to completion,” said Husak. “The more you can engage in a two-way conversation with supporters, the more they will feel a part of the journey.”
Getting media coverage in the highly competitive field of crowdfunding is no small feat, and at the end of the day your success will come down to the innovation, individuality and importance of the big mission that you share. Remember that you can't control what the press will write, but can control the image you create during your social media efforts, so put the time into engaging your network from day one. With every new backer, you improve your chances of media coverage and smashing your end goal.