Insiders Guide to Successful Crowdfunding
Jon Leland is the Director of strategy and insights at Kickstarter, the New York based crowdfunding platform. They currently have a network of 8.5 million backers, people who are willing to financially support great projects. That’s remarkable growth since the site launched one afternoon on April 28th 2009 at 4:27 pm. Jon’s visiting the Netherlands as Kickstarter strengthens its European operations, speaking at crowdfundingday.nl in Amsterdam. Jon takes a day out to explore new inventions happening in the city of Eindhoven, accepting an invitation from the new Kazerne International Creative Innovation Cluster, run by Annemoon Geurts.
They pay a world-wind visit to Design Academy Eindhoven, TU-Eindhoven’s Department of Industrial Design and their new automotive hub, as well as two Startupbootcamp HighTechXL startups ready for investor funding on the High Tech Campus. They also pass by the Eindhoven Atelier, Studio Daphna Laurens and Mieke Meijer, Studio Kiki run by Eijk and Joost van Bleisweijk, the Festival of the Future at Strijp-S (Do-it-Together-fest) and end up at the Kazerne.
Benjamin Bryant from Palo Alto, California is also along to see what’s cooking in the South-Eastern part of the Netherlands. They share the following insights with several Dutch startups during their tour. Writer and broadcaster Jonathan Marks listened in….
Jon Leland: Kickstarter helps creators and designers launch their own products and services. But note that our primary mission is to help people create things, not to help people raise money. That means it’s really all about having the right mind-set and story in order to build a trusted network of creators and backers. The money aspect can sometimes get in the way.
The people behind Kickstarter are there to help create and build your network. We will provide feedback on your project before you launch and may connect you to other relevant people in our international ecosystem. If you’re thinking about doing a Kickstarter project, or just want to test an awesome idea, then we’re here to help.
Clearly you need interaction before there is any talk of a transaction.
Benjamin Bryant. I do a lot of marketing and strategic work for Pebble, the wearables company which has successfully used Kickstarter to raise over US$ 20 million. I have helped take the company from being completely off the map to a global force to be reckoned with.
Yes, it is true, Pebble has grown to be one of the most successful crowdfunding campaigns so far. But, remember, we started as just a simple idea for a smart watch and it was a very small core team that put it together. It took careful planning and execution on a platform like Kickstarter to build a company of over 150 people and ensure Pebble is known in so many countries around the world.
Jon Leland: At this point, we’re playing catch up to what’s possible in the near future. In the six years since Kickstarter was launched, we have worked with so many creators to build successful projects. We work with companies long before they launch their Kickstarter project and that assistance now extends well beyond their initial campaign. Remember, the ability to create things like the Pebble watch with a team of just five people is so new. And the path to success is in constant flux and not well known. At Kickstarter we sit in the middle of things. And we’re discovering that the earlier in the process a creator seeks education and feedback, from us or others, the better. We can sometimes connect them with the right other person who understands what they are doing and help guide them along. Creators need to think through their audience, their real goals, and how they can link the two.
In fact you need to build two networks to be successful. You need a professional network of peers, who will help your team build and execute the product or service. And you need the network of your fans, that’s the audience that want to support you. We often work with creators to help define and figure out their audience and then build a strategy to reach them.
Jon Leland: Crowdfunding has been growing exponentially for a while. The technology, like 3D printing, has made it possible to create so many more different things. And the ease at which you can create them and serve a mass market. We’re still experimenting, but this route to success is becoming more visible not only in North America but in Europe as well.
When Kickstarter first started, there were a lot more problems after campaigns. People would raise money and then not know how to produce it in large quantities. There would be delays and that leads to disappointment amongst the fans. But some, like Pebble, have survived that journey, making it so much easier the second time around.
Benjamin Bryant: There’s a danger that you only have an idea, without a path forward in which to take the idea. You can get advice from others, but what also emerges is that everyone’s path in building a disruptive company is slightly different. There are pitfalls. There are things that will go wrong when your pioneering something new. That’s just the way the game works. But it’s an important self-learning process. It sounds difficult — and believe me it is. But if you persevere, and you learn from your mistakes, you will get to the place where you want to be.
Europe is different from the States
Jon Leland: Design technology in Europe is doing great, in fact doing very well. Kickstarter launched in Germany on Tuesday May 12th 2015. And one of the Dutch projects, was the MIITO project which came out the Eindhoven Design School and which raised more than €150,000 within the first 24 hours. That’s great.
I feel the projects we are seeing in Europe really do have a different flavour and approach to what’s being created in America. We’ve seen technology design to be our strongest category across Europe. But fashion and games are also very big. The more traditional craftsmanship is also something we’re seeing doing well. There are lots of opportunities, especially as the economic recovery has been slow and funding gets cuts for the arts.
It is important to realise that more the half the money raised by Kickstarter projects from the Netherlands comes from outside the country. So make sure your project can be understood by the whole audience or you are really limiting yourselves. On day one of our launch in Germany, half of the money raised came from Germany, the rest from elsewhere, predominately from the United States. We have also made changes in the last few days which makes it easier for Dutch creators to get access to US backers by converting all the prices into US dollars. Kickstarter has always been very international — and the cities with the largest backers are not the same places as the centres of creativity. Kickstarter is a community of 8.5 million backers, 2.5 million of those are repeat backers coming back for more.
Benjamin Bryant: Here are some thoughts from what I saw in Eindhoven. The question for the entrepreneurial creators is always how can you take an idea and turn it into a product that you push out to a mass market. With each of these projects, there is a kind of mechanism you follow in the journey from idea to a productised state. We saw some projects, for instance one designed for physiotherapy professionals, where crowdfunding just doesn't make sense. It is clearly a niche product and there are already B2B channels for these products to reach both backers and users. On the other hand, we saw several projects aimed at an interested public which would be absolutely perfect for a Kickstarter campaign. They would work because it is easy to understand what the project does and get people excited about it.
Remember that Crowdfunding is not a one-template fits all tool. Crowdfunding is really good when you have something that can inspire and connect a group of individuals.
Jon Leland: What’s key here is understanding who the audience is. Will they quickly understand what you’re doing and be inspired to get involved? That applies to most successful projects, whether they go the crowdfunding route or not. At Kickstarter, we are getting good at understanding what audiences want and getting involved in the Kickstarter community earlier in the process helps you understand what has worked for others.
Benjamin Bryant: It is extremely important that you spend time and effort working out how you are going to communicate your idea at the base level to your community. You need to distil your message down, so you can easily explain this is what I have built, this is what excites me about it, and this is what I want to do with it. You’re giving clear reasons why people should care and buy into that. The clearer you can express your argument, the more successful you’ll be.
Boiling it down to one sentence that resonates and clicks with that audience is difficult. It is lot of work. And note that the story it is constantly changing based on feedback you get when others share your story. If they didn’t hear what you mean, then you need to fix that. That’s the way you learn what connects and what doesn’t.
At the High Tech Campus Eindhoven, Jon Leland met two teams, alumni from the most recent Startupbootcamp HighTechXL program. Both Manus Machina and Runr were both judged to be worthy of being a Kickstarter pick.
Jon Leland: There is no magic template. Find your own story. Experiment with different ways of sharing your passion. There is no single paradigm that you can apply to everything. There are analogies to this in music. A great jazz musician is someone who has experimented with a lot of ways of playing the same tune. Once they have the skill sets in place, then they make a unique performance that excites the audience.