The first 24 hours were a rush. The next 16 a panic. The last 12 a chart-based roller coaster. That’s what a Kickstarter feels like when it hits the mark. It’s statistically provable that Kickstarter campaigns that fail, fail big; blockbuster Kickstarters are actually far and few between, but they attract more attention because of the amount of money raised.
For The Magazine: The Book (Year One), a somewhat ungainly title chosen to describe our project with a high degree of specificity to our likely audience, we were only slightly above average. Let me dissect our results for you. (And, yes, you can still buy the book in a bunch of print and electronic formats.)
Get big fast, slow, then fast again
A few days into our campaign, I began to get condolences from friends and colleagues who assumed the project wouldn’t fund. I was baffled, although I appreciated the sympathy.
The trouble was that the most well-known Kickstarter are the ones that have a crazy arc of funding. They set out to raise thousands or tens of thousands and money pours in. The finally tally may be 10 to 100 times what was hoped for. Not seeing this steep upward curve is what worried people.
But that’s not the acceleration that drives most crowdfunding projects. In most cases, funding occurs near the end of the campaign, and the greatest activity is in the first and last 24 to 48 hours. In fact, those two periods often account for more than 50% of the cash raised.
In our case, we started strong. Launched in the afternoon of November 20, our first pledge came in after I’d pressed the button to take the project live, but before I’d announced it anywhere. Because I’d connected my account with Facebook, mutual friends were notified the moment I launched a campaign, and one clicked pledge instantly. (Thanks, Matthew!)
That presaged a remarkable 24 hours. Our goal was $48,000, and for the next 24 hours, nearly to the minute, pledges poured in. We received about $16,000 from over 500 people.
And then—it stopped. Abruptly. Pledges went from a flood to a trickle. It was such a sudden change, I wondered if Kickstarter had broken or I’d triggered some behavior that was throttling us. Nope. We had just found the first reach of collective “true fans”: those who support me as an individual creator, those backing the contributors to the project, and those who like the concept of The Magazine without requiring much information about the specific project.
The next 1,000 people would be harder to attract.
The advice I received that worked
My friends, colleagues, and random strangers gave me a host of advice that I sorted through. I also had spent a year interviewing people for The New Disruptors podcast about how they created their own independent careers and companies. Many I interviewed had made use not just of Kickstarter or Indiegogo, but had chosen taking pre-orders, asking for pure patronage, building their own self-hosted crowdfunding software, or making a mix of all of the above. (In fact, I programmed a membership payment system a few years ago for TidBITS that is a kind of patronage-based crowdfunding that was and remains quite successful.)
Before I started, I thought through the potential audience for the book. It would be a collection almost entirely of already-published work; I opted to commission one new article and a cover to provide some sense of uniqueness and freshness.
Ultimately, we produced a hardcover edition with a dust jacket, regular and foil embossing, sewn signatures (not glued), and a full-color interior with 28 stories that spanned 216 pages. Because we reached a stretch goal—and more on that later—we also produced an ebook with a total of 40 stories that is 302 pages in its PDF form. The hardcover was meant to be a work that was great to read as well as beautiful to look at and hold—a physical artifact extracted from our digital format.
Fundamentally, I needed to bring in people who already knew something about us and who wanted a print collection, either for themselves or as a gift for others. (About 20% of backers opted for digital-only rewards.)
The audience would be drawn from the tens of thousands of subscribers at that time as well as the 130,000 or so people who had previously subscribed to The Magazine. Add to that people who read free articles, saw our articles on Boing Boing and at Medium, or had read about our publication.
I thought we had the potential to draw from 100,000 people with a clear understanding of us and 500,000 who might have heard of the publication or vaguely recollected it. I used to work with and around direct marketing, and knew that a 1% to 2% response rate from those you can reach directly is a baseline. But it was unclear how many people beyond regular subscribers I could reach.
In the end, I set a budget and a plan with the assumption that I could get 1,500 backers and that I needed that many to pull off a hardcover edition and all the associated expenses. If I couldn’t reach that many, it would teach me about the limits of my modest ambitions.
As I moved from budget into assembling the campaign, I reviewed bits of advice I’d heard again and again; some came in just before the launch:
- A video improves your odds of success. Kickstarter says that while 43.5% of all projects launched since inception have achieved funding, 50% of projects with video fund, while only 30% without reach their goal. (The corollary to draw here is that most projects have videos, and the ones without may indicate other structural defects.)
- Make the video short. Less than two minutes is best. This comes from several people who have analyzed successful campaigns, and while causation may not be perfect, the correlation is very close. Again, this may relate to organization: it’s actually more difficult to shoot and edit something short and perfect than something rambly.
- Use an emotional appeal in the video. You have to tell a story, not just present facts.
- Write a long description. While this may seem out of sync with the insistence on a short video, backers thrive on information. Many very popular campaigns have lots of detail.
- Have entry-level rewards. This lets people contribute who want to provide moral support and not make a huge underwriting commitment.
- Provide higher-level donation-style rewards that emphasize patronage. We had $100 (1 book) and $200 (5 books) patronage levels in which the backers were thanked in the book. Those two levels raised about 7% of the total.
- You can’t talk people into higher levels. People donate at a level at which they’re comfortable, and those amounts aren’t typically affected by what rewards you offer, with the exception of certain hardware products. Rather, more expensive rewards attract people already comfortable with funding you at that price, and you’re giving them an excuse to do so.
- International shipping is very expensive. Budget an excessive amount for shipping outside of your home country (such as the United States) or region (such as the E.U.).
Even with all of this insight and planning, I wound up creating too many rewards levels, some of which required too much money and time to fulfill relative to their contribution to the final tally. I wasted time during the campaign and afterwards as a result for break-even portions of the campaign that helped lead to delays for the main focus.
Into the heat of battle
The campaign launched too late in the year. This was partly because I’m a one-man band with contract help in editing and production, and had too many plates to keep spinning to launch earlier. This led to a November launch just before American Thanksgiving, which I knew would be a problem.
My fellow citizens would be traveling and eating and be unlikely to donate that week. And those who plan ahead for Chanukah, Christmas, and other holidays wouldn’t want a book that wasn’t being delivered for months. Finally, there was a tax issue: the money would be earned and taxable in 2013, but expenses would mostly come in 2014. (I wrote a separate article about crowdfunding business and tax expenses called “Pay Caesar His Due.”)
But there had been no earlier way to launch without it finishing during Thanksgiving and no later way without running into Christmas week. I would have four weeks aligned across three issues of The Magazine, which comes out every other Thursday, and five episodes of The New Disruptors, which I used to promote the Kickstarter as well.
Deferring into the new year would have meant the first-anniversary book celebrating an October stick in the sand would have appeared around May 2014, which seemed like a terrible idea; also, getting people to pony up for a book after the holidays, in January, seemed rather unlikely, too.
I already had a sizable audience to which to pitch the Kickstarter, but the aspect of a book full of articles they might already have read for those who remained subscribers wasn’t a perfect match. However, I knew that contributors to the book and friends of the publication would help spread the word, as well as interested reporters. The charm, irony, or absurdity of a digital-only publication producing a print book was beguiling.
So I launched, participated in podcasts and articles, and had some anxious weeks right in the middle.
According to a variety of analyses of Kickstarter data, campaigns that achieve 50% of their funding goal reach the final goal more than 95% of the time. This varies by the size of a project: smaller campaigns are slightly more likely to fund completely if they hit 50% than larger ones. On December 7, I hit 50% and began to relax a bit, even though there was a long road to go.
This was in good part thanks to John Gruber, who had invited me to talk about a bunch of stuff, including the book campaign, on his popular podcast, The Talk Show, which has tens of thousands of regular listeners. As soon as the episode was posted several days after Thanksgiving, pledges picked up, and several people emailed me to let me know they’d heard about it on the show. Some news articles also came out, and contributors to the book had begun to beat the bushes more aggressively. (I can tell you many parents of authors pledged.) The arc upwards was looking good.
On the Monday of the week that the campaign was to end, friends and colleagues began to freak out on my behalf, and to rally support from others. Some of the largest pledges that included podcast advertising slots on The New Disruptors were snapped up, and the campaign went from just over $42,000 through the $48,000 goal to nearly $51,000 in 24 hours. In fact, I missed the funding moment, because a generous company kicked in $2,000 during a few minutes when I wasn’t looking!
In total, $15,000 was pledged in the last three days, just as I could have hoped. We funded at 117%, just over the average of 105% of the target amount for successful projects. (I suspect that the median funding level is close to 101% as enormously successful overfunded large projects drive up the average.)
Because the total of a Kickstarter is public, I’ll reveal the detailed breakdown of referrals that the site provides to campaign managers.
Many people and companies scrub referrals from their browser requests to avoid being tracked, and you can see almost 31% of pledges came from sources that lack such detail. (Andy Baio notes in a comment that these are likely email and IM clickthroughs.)
Kickstarter indicates that 27% of the total pledges came from its Web site and emails (marked in green in the list). However, the largest category, Search, likely had such a big amount because when I appeared on The Talk Show, we suggested people go to Kickstarter.com and type in “magazine book” to find us. While I had a custom URL redirection (the dash magazine dot org slash book), I am sure more people went and searched. Even though John posted a link on Daring Fireball, which has millions of monthly readers, direct clicks tracked from that link were less than a percentage. (His readers may be more likely to scrub referrals, and it could be thousands of dollars that came from that link!)
It’s also interesting to see the distribution of pledges by known sources. As in most cases in which mass numbers of people are involved, there is a power-law curve with a big head (the highest percentages clustered) and a long tail (the small percentages that add up).
Twitter, where I have a good following and the periodical’s own account has thousands of followers, generated 20% of the total pledged. But after Direct, Search, and Twitter, the fourth referral drops a significant amount. Then it quickly descends into ever-smaller amounts.
And discovery is always a fascinating path to track. Marco Arment, the founder of the publication from whom I purchased it, posted a blog entry that produced twice the trackable pledges as a link on The Magazine’s own Web site!
And Boing Boing, a site that has millions of unique monthly viewers, let me post an article about the project, but generated just six backers—the Venn diagram between the project and me and Boing Boing might overlap so tightly, and the article came late enough, that potential backers had already pledged through other publicity.
Given that thrill ride, how did it all work out? Reasonably well. The book wasn’t massively “profitable”: given that I own the company, my wages have to come after expenses and taxes, and I show after all revenue, fees, and taxes were calculated, profit was about $3,000 on roughly $53,500 in income.
I do value my time at more than $5 or $10 an hour, but the experience was invaluable: I couldn’t have paid enough to go through the project phase, and I will write later more about the thousand things I learned in producing a book that I thought I knew and didn’t.
In the end, about 1,200 books went out, and backers were effusive in how much they liked the book. It was the ultimate reverse reward for me, the designers, and the artists and writers involved. The ebook wound up two months late because of delays in hardcover production, and the hardcover shipped out starting about three weeks later than I’d estimated.
I have about 250 hardcover books remaining: a few in bookstores, a few in my basement, and most at Amazon, which handles domestic fulfillment. I added a print-on-demand paperback edition with a black-and-white interior that can be both printed and shipped more cheaply to make it a better option worldwide. The campaign may be over, but sales are not. (Did I mention the book is still for sale?)
I’m in the planning stages already for a Year Two edition. I have a design already in hand and tested, and don’t have to start from scratch in learning about shipping, trucking, and fulfillment. Let’s hope I don’t repeat the mistakes of my first go-round, while producing a book that people want to read.
Some final thoughts.
My planning wasn’t terrible. I estimated needing 1,500 backers to fund; I had 1,467 because a number of people and companies went in at patronage and podcast sponsorship levels. I budgeted reasonably well, and produced only slightly less net earnings than I had expected at that level.
The time put into making the video was clearly worthwhile. The video was played over 6,600 times, and completed 41.5% of the time. The total number of pledges (1,467) was equal to just over half of the people who watched the whole video (2,700). If the number had been vastly different—only 500 watched all the way through or 50,000 had—I’d be rethinking a number of assumptions.
Be prepared to accept payment after a campaign. I had a very low failure rate on credit-card charges after the campaign: only about $450 couldn’t be processed. I’ve heard 1–2% is more typical. I contacted the several backers who had problems, and almost all couldn’t get Amazon Payments to take their cards. I use Stripe for The Magazine, another credit-card processor, and set up a simple page where people could pay that way.
Post-campaign pre-orders add up. I set up a pre-order site where people who weren’t in the campaign could put down money (but not be charged) before the ebook and hardcover book shipped. That wound up adding over $1,400 to the total, although that includes some copies sold at cost to authors and some international shipping fees. (Because offset printing has a lot of setup costs, selling at breakeven to authors increased the number of copies ordered, which reduced the effective per-item cost for all orders, thus increasing margin.)
Getting help on Kickstarter order handling is key. I did all the information handling for addresses and rewards myself, and I regret it. While I needed to integrate electronic rewards into my Web site on an account basis, I’d take the small hit on revenue to work with BackerKit or another site that manages Kickstarter data and allows post-campaign add-ons by backers, so they can still get items that they didn’t pledge for during the duration of the project’s funding.
For campaigns that involve either products or physical rewards, this can be a substantial boost, and possibly exceed the fees charged by the post-project services firm. (I’ll write more about this another time.)
I underestimated the programming burden. Some of the electronic rewards, such as a one-year subscription, were much more involved to implement than I expected. Although I contracted out book design and production, as well as many other tasks, I handled the programming myself, and I should have specced out the tasks better ahead of time.
I had too many rewards. Despite lots of advice, I put in rewards that involved too much effort and expense. I love the art prints we produced, but they were tangential to the project, and only covered their costs, and took several hours to ship properly to the buyers. (I do have additional prints to sell, but without a retail store, it’s tricky to market them. I’m working on that still.)
Were I to plan the same campaign again, I would have skipped the T-shirt and the art prints, as happy as I was to make and share them, because they occupied too much time for all of us involved relative to the reward. If we already had an audience that was buying T-shirts and prints, it would have made sense, as this would be yet another in the same kind of series, but exclusive. These extras broke even, where they were designed to bring in additional profit to fund operations.
The first reward should be your primary reward. Because I wanted to provide entry points for less-expensive options, my lowest reward was $10 for the ebook. But I was really trying to fund hardcover books. In the interests of simplicity, I should have set a single hardcover/ebook bundle price and made that the first reward people saw (at $25), and told people that after the campaign they could buy the ebook as a separate item.
Stretch rewards are only sometimes worth it. I was trying to provide an incentive to keep moving upwards as it became clear we’d exceed our original goal, and set the longer ebook edition (with 12 more stories) as the stretch at $55,000. However, there was enough expense involved, plus the complication of producing two nearly identical books, that all the additional income was eaten up. For other crowdfunding campaigns, stretch goals have provided ways to get early backers to raise pledges, or spark more interest when stretch rewards are more significant or when every backer gets additional rewards as a result.
Even though I budgeted for international shipping, it was even more expensive than planned. The 250 or so books sent outside the United States cost at least $5 more per copy to ship than my most extreme budget. The next time around, I will likely offer different overseas options, and not try to ship hardcover books because of weight. Several books were lost or severely damaged by distant post offices, too, and had to be replaced. (One reader in Germany had his mailbox and the book destroyed when a carrier shoved the book in, and the post office refuses to take responsibility!)
Glenn discussed the Kickstarter campaign in great detail in an interview with Jason Snell at The New Disruptors.
Glenn Fleishman is a veteran freelance writer who contributes every week to the Economist’s Babbage blog, is a senior contributor to Macworld magazine, and writes for Boing Boing, TidBITS, and other publications. He’s the editor and publisher of The Magazine, an electronic periodical about interesting things, the host of The New Disruptors podcast, and a regular panelist on The Incomparable.