How We Used Crowdfunding to Raise Over $4m and Pre-Sell 23,000+ Units
In December 2015 I was sitting at Crooked Tree Coffeehouse in Dallas, TX with the Pilot earpiece prototypes and the Android phone running our first translation software both tucked away in bubble wrap in my laptop bag. Jeremiah and I had agreed to have coffee for our first meeting, and I was going to pitch this young creative the idea of directing a crowdfunding campaign based on the technology that our small team at Waverly Labs had been working on for over two years. He was going to be one of the first people outside of our company to see what we had stealthily developed, and I was going to have to convince him to take the job on a tight budget.
I had become good at pitching and had convinced talented engineers to join this small team with no pay, a few family and friends to loan us money to bootstrap our startup alongside the personal funds we had sunk into the project, and pitched the team at Indiegogo to support our endeavor. A few days after we met, Jeremiah sent me an email saying that he shared our vision and wanted to direct the project. We met at the same coffee shop the next week to start planning.
Even in the beginning we all believed we were working on something amazing, and as such we continually stacked the team with experts trying to solve this insanely difficult problem. But despite the difficulty the engineers were faced with, I had my own challenge: how would we make Pilot’s public debut?
I had seen the success of other tech startups using crowdfunding as a launch strategy to debut their products and I was convinced that this would be our best opportunity. So I spent months, and I mean months, consuming every piece of information available online, attending meetups on the subject matter, and networking with professionals in the field, to devise a strategy for launch Pilot: Smart Earpiece Language Translator. Little did I know we would smash records and become the third most funded Technology campaign ever on Indiegogo.
Here’s how we did it.
Let me preface this by saying two main things:
First, we decided crowdfunding was best for our launch strategy based on a few factors. Backers of crowdfunding projects tend to skew high towards the “innovator” and “early adopter” segments of the product adoption curve, and technology campaigns on these platforms represent nearly ¼ of all the money pledged via crowdfunding. Based on the innovative nature of Pilot, it seemed like a good fit.
Second, we debated on which of the two most popular platforms to commit to: Kickstarter or Indiegogo. Both have their pros and cons, but in short, we chose Indiegogo for one very specific reason: of all the crowdfunding and startup events I attended, I never once met anyone from Kickstarter, whereas Indiegogo’s community team was always around and encouraging. As the days came closer towards launching the campaign, I knew I would want to lean on them for guidance, and these relationships really became indispensable for our success.
In the initial stages of planning, I decided to break up our launch strategy into three major sections: pre-launch, launch and post-launch. I knew that 80% of the success of the campaign would be based on the pre-launch strategy, and if we didn’t execute it well there would be no successful campaign.
The first thing we decided on was the financial goal of our campaign. Crowdfunding can be used for a lot of reasons, including product development testing, price sensitivity analysis, press and awareness, or attracting partnership opportunities, but most often it’s used for funding. We looked at some simple metrics internally to decide on a campaign goal near $100,000, and depending on the success of the campaign, we planned contingencies for our post-campaign strategy.
Once we decided on our funding goal, Indiegogo shared their formula for creating a successful campaign. That is to say, Indiegogo has 15 million monthly visitors, but no matter how great your campaign is to you, NONE of them will contribute to your project unless it’s already a success from the start. This is probably the biggest myth of crowdfunding: if you launch it, they will NOT come.
Here’s the equation I created based on the data Indiegogo directly provided:
Funding Goal x 30% / Average perk denomination / 3–5% = Number of backers ready to fund your campaign on Day 1.
Indiegogo estimates that 30% of your funding goal needs to be met within the first 48 hours of launch in order to attract enough attention from their internal community for the campaign to be a success (assuming a 30 days lifespan of your campaign). For us, that means we had to ensure $30,000 was committed to our campaign within the first 2 days of launch. If you factor our average perk size of $199, that equates to roughly 150 people backing the project. Lastly, with an average conversion rate of 3–5% (a common sales conversion metric) of people who say they will support your project versus those who will actually support it, that means we needed 3,000–5,000 people ready to go on Day 1.
Unfortunately for us, we remained in stealth-mode over the years and had a very small community. To build a following of at least 5,000 people ready and committed to our crowdfunding launch in a short period of time, I devised a growth strategy that would build excitement just weeks before we officially launched on May 25, 2016.
These tactics centered around a teaser video, press outreach, ad spend, and a rewards campaign, all with the purpose of driving traffic and increasing email signups to our website.
I’ll only focus on the teaser video here but go into detail about the aspects of our full video development in the Launch section of this article.
The idea for a teaser video was mapped around creating awe and excitement through a very short clip, and I took some inspiration from this Lexus teaser for a hoverboard they were prototyping (see: Lexus Hoverboard). Since our full campaign video ended up being 2:41, we chopped it up into 3 different teaser lengths of 17, 24 and 51 seconds for different use cases (Youtube, Facebook, website, etc). The teaser would create curiosity without giving away too much information and would encourage people to go to our website to learn more.
Once the viewer navigated to our website from the teaser video, our site was optimized around getting them to signup to our email list. There were 6 email signup forms throughout the website, each carefully placed to amplify lead capture. To encourage the user to sign-up, I turned to a growth strategy that Tim Ferriss discussed on his blog regarding how a men’s grooming brand increased their email sign-ups. You can read about it here, but essentially the idea is around offering a rewards campaign to encourage people to sign-up and share the campaign with their friends via email and social media. We used Gleam.io which offered a lot of options to facilitate high engagement.
As part of our communications plan, we made a conscious effort to build relationships with press that primarily covered wearable tech or new gadgets. It’s important to build these relationships far in advance of launching a campaign, and especially helpful if you find that one key writer who falls in love with your work and is ready to excite the world by publishing a story of your campaign the day it goes live. This is usually through an Exclusive, but another option includes an Embargo, where multiple press outlets have an article written in advance and all are released to publish it at the same time. Although this reach is more extensive, it is usually done by a press agency and therefore has high associated costs. It was beyond our shoestring budget so the best I could arrange was a couple of press contacts that I had persuaded to write about us. As a final hail-mary, I had compiled a deep press list to pitch quickly via email.
As I said, press can be a powerful tactic if you have a pr agency hustling for you, but even still it’s very difficult to have enough outreach to leverage momentum on its own. Therefore, we allocated a few thousand dollars to ad spend on multiple platforms, including Youtube, Reddit and Facebook. Broad demographic profiles were created and we ran the various teaser videos across these platforms during a test phase until we could gauge the profile of users who were most interested. In the end, we found that Facebook was by far the best platform in terms of creating outreach, engagement, social sharing and narrowing down to specific users.
In all, these four tactics combined were the crux of our pre-launch strategy. Jeremiah and I had sliced the original video into a powerful teaser that we felt created excitement for the product launch, our rewards program was in place to amplify email signups, the advertising campaign was running our video on several platforms, and I had convinced a couple of writers to publish an article of our work the day before we went live. It was a bootstrapped company with a shoestring budget of a marketing plan, but three weeks before the launch of the campaign we pushed the GO button on the pre-launch campaign, then sat back and waited.
… and we waited, and waited, and waited. After, six days of the ad campaign running, the needle was barely moving. Our teaser was getting very little traction and we were only seeing a few signups. I was thinking how I would break the news to the team, until something very interesting happened around the seventh day.
The ad with our teaser video was being shared across Facebook very slowly, but gradually you could see the numbers compounding. Eventually, a writer in the UK picked up the story and wrote about it over the weekend. That moved the needle a bit and we saw the number of shares jump from a few thousand to 20,000. I got on a call with the team to share the excitement but by Monday morning the video took on a life of its own.
Press all over the world were emailing, calling and sharing the story. The number of social shares began to climb RAPIDLY: 100k. 500k. 1m. 5m. All of a sudden we had achieve viral status and the teaser video, along with the referral campaign, was performing phenomenally. By the end of the two weeks, we had captured 175,000 email signups and had our video shared over 40,000,000 times on social media and by the press. A week later, we launched the campaign and hit our funding goal in 15 minutes. By the second hour, we had secured $1 million, and eventually $2.4 million over the 30 day campaign.
I credit the success of our pre-launch strategy to a few things. First, we had a really interesting product. The stuff of science fiction. It’s an exciting piece of technology, and although I recognize this helped our traction, I absolutely believe this isn’t enough to achieve the virality we had. I say this because before Pilot there have been other teams working on similar technology with very little public traction, however you never heard about them because they didn’t understand the power of storytelling.
This is the second thing we did very well — tell a beautiful and simple story in our teaser. One that resonates with people and is incredibly easy to follow. Often times, product launch videos describe all the use cases of how a product works and use the video to promote its features. For our campaign we brainstormed on a lot of ideas but eventually settled on keeping the story and message as simple as possible to highlight its effect: boy meets girl.
Lastly, the referral campaign worked tremendously well and encouraged people to share and like our content online. The referral campaign offered a chance to win a free Pilot earpiece, and people could increase their entries into the drawing through social sharing and getting other people to signup as well. You can’t have virality without sharing.
Once the campaign was officially live on May 25, everyone would be able to see our work in detail, and since all information about the company was kept purposely hidden (our website was an exaggerated landing page), people would only learn the details of Pilot from the campaign page and video.
The video is the first thing people are going to want to see once they are on your campaign and we invested a lot of our resources to make it perfect. I wanted the video to feel like an indie project to convey the small bootstrapped nature and grit of our work as a small team. Jeremiah had a good eye for this perspective and we spent a few months distilling the idea of Pilot to a simple message that would resonate well in video.
It took a few attempts to get the story perfect and after we had a reading of the first script we realized the story came across too much like a sales pitch. Jeremiah and I knew we would need to make major changes, so that evening I stayed awake writing a new script from scratch. The years of working on the project culminated in that writing session, and relying on a real experience from my past about meeting a foreign girl, I sent Jeremiah a new script at 2am in an email that simply read “I think I’ve written my opus.” Jeremiah’s response was “This is fantastic! I love it. I’ll read over it a few more times today, but I don’t really have any notes right now. It’s solid.” 5 days later we began shooting the video and completed production in 48 hours.
Because we bootstrapped production, I had to quickly learn how to manage a shoot, including writing film treatments and planning a production schedule. Jeremiah (who I had hired to do the job) brought with him the technical background of filmmaking, and you can read his case study on how he tackled the project here: Waverly Labs Indiegogo Video
In the video, we wanted to cover three main points:
- What is Pilot?
- How did we do it / Who is the team?
- Why are we on Indiegogo?
The focus of the video was always product, team, and traction. Anything else would only convolute the story, which was suppose to be simple and beautiful. We intentionally did not include any technical details about Pilot in the video because we would outline this and everything else in detail within the campaign page. Again, the simplicity and flow of the storyline was always paramount.
When planning how to construct the campaign page, I studied multiple successful and unsuccessful campaigns to understand the similarities of popular and well funded projects. I also relied on this great online resource, http://artofthekickstart.com/, which was extremely helpful at developing a campaign strategy. Based on my research, I compiled a 12-point outline for designing a winning campaign:
- Have an exciting thumbnail and enticing headline
- Emphasize social media shares
- Showcase media/press for social proof
- Show how it works w/ detailed product pics and walkthroughs (copy, photos, video)
- Simplify the idea for the average person to understand
- Testimonials of real people, especially social influencers
- List the features and specs of what it does
- Reveal technological magic of how it works as proof
- Call to Action — lay out company history and difficulties/hard work put in, and ask for help to make the dream a reality
- Compelling Rewards — infographic with clear/concise reward tiers (a) small $1 tier for an easy pledge, (b) pricing tiers of high, medium and low rewards — price anchoring, (c) humor and intrigue into right panel pricing tiers to show personality, (d) scarcity & FOMO of limited rewards without running out of rewards, (e) photos and samples of what each reward tier includes, (f) infographic and “map” of reward tiers, (g) quality of reward tiers vs quantity of reward tiers — don’t make it too, (g1) simple menu including featured rewards, favorite of creators/backers and easiest choice, (h) consistency of reward tiers with overall product
- History and Roadmap/Timeline
- Showcase Team
Once we had an outline for what to detail on our campaign page, we hired a designer to help us layout the page. We only focused on the points which were most crucial and relied on feedback from Indiegogo’s team (their community was really helpful) for guidance. It took us several days and very late nights, but we worked on it all the way up until 6am, 1 hour before it launched. This was a time consuming project and Edgar, the young designer I had worked with on a past project, was extremely helpful: https://www.behance.net/edgarrios.
Lastly, customer service was an incredibly important component during the launch phase. Unfortunately we were inundated with emails and messages and struggled to keep in constant communication with our backers, press and others who were reaching out to us, which leads me to my last point.
Based on the overwhelming success of the campaign I knew we needed to meet two main objectives during our post-campaign phase:
- Maintain momentum
- Stay in communication with our community
The first thing I did was move our campaign into InDemand, which is Indiegogo’s platform for campaign’s after the initial 30 day funding period. This allowed us to keep the campaign running to raise additional money and continue building our community. Again, another great reason we chose Indiegogo.
Secondly, we hired a Director of Marketing and Communications. Up until that time I was trying to manage it all myself, but overseeing product development and other projects was extremely time consuming. If we wanted to keep press engaged and maintain our momentum, we would need someone on board full-time to oversee our global press and marketing strategy, which was vital as we began scaling our company.
Finally, combined with another support team member, we actively stay in communication with our supporters. The feedback we receive from them helps us shape our product development goals and as our first backers they’ve become some of our strongest evangelists. Whether through social media, blogging, updates on the Indiegogo page, or an email newsletter, we’re constantly keeping our community engaged and responding to their questions.
With all of these post-campaign tactics combined we’ve been able to secure an additional $2 million since the campaign first moved to Indiegogo’s InDemand platform, and it would have been practically impossible without having the right team on board during this stage of the company’s growth.
When we started this project a few years ago we were really inspired by wearable technology and wanted to solve a global challenge, and although I was confident that our campaign would be a success, no one is ever prepared for that kind of virality. Looking back I would have done a few things differently, such as building stronger press relationships well in advance and preparing the team to dedicate 100% of their time during the campaign to customer support. But all in all we managed to break records and become one of the most popular technology crowdfunding campaigns to date.
Hopefully our success is helpful for other companies preparing a crowdfunding campaign and inspiring for anyone thinking about launching their own startup.
The past few months have been some of the most exciting for our team, and as we celebrate our 1 year anniversary and reach a milestone of $5m in pre-orders this month, we can’t wait to see a world without language barriers when we begin shipping Pilot later this fall.
We now closed the campaign (https://www.indiegogo.com/projects/meet-the-pilot-smart-earpiece-language-translator) but you can visit us on our website to find out more about us!