Part 8/8: Crowdfunding Lessons Learned
Our best advice if you’re starting a crowdfunding campaign.
We (Senic YC S13) are a hardware startup dedicated to making the interactions between humans and technology more seamless and natural. We want to share our experience making our first product, Nuimo through an 8 part series “Building a Hardware Startup”.
This is Part 8/8 in the series discussing how we approached crowdfunding. The first 7 parts can be found here.
Crowdfunding can be a little like jumping out of a plane — if you come prepared with a right equipment it can be an amazing ride. Without proper preparation it’s more like a long fall with few options for survival. We’ve taken the plunge twice now now and learned a lot both times.
To help you avoid some of our bigger mistakes and steal a few of the ideas that worked for us we’re sharing our quick-and-dirty crowdfunding roadmap for what happens pre-, during and post-campaign.
The ‘Right’ Time for a Campaign
The first thing to do is really ask yourself whether or not it’s the ‘right’ time for crowdfunding. This means considering two main factors before you embark on the journey. There is a definite ‘right’ and ‘wrong’ time for a campaign — and timing it right can make a 100k+ difference.
1. Current State of Your Prototype
The first thing is to outline your realistic timeline for delivering your product. This means exactly when you could deliver if you hit the ground running the second your campaign ends adding time for mess-ups, unforeseen issues etc. If your product still won’t be delivered for a year or more — its probably best to wait on crowdfunding.
An important consideration is that on average 75% of crowdfunding delivery dates are delayed — trust us, be on the safe side.
2. Lead-Time to Prep the Campaign
If your product is deliverable on a reasonable timeframe, it’s time to set a launch date. Rule of thumb is that it takes about 3 months to prepare a campaign (although people do it slower and much faster). The best way to plan when to launch is to figure out how long it will take you to complete the things listed under ‘Pre-Campaign.’
The Pre-campaign stage is the most important phase of your crowdfunding journey and being prepared is the best way to insure success. Once you launch, there is no turning back.
How well you prepare your campaign is the best signifier of its success. While there is no magic answer to getting funded — there are a few things that will definitely sway the odds in your favor.
Success in crowdfunding really centers on promotion, PR and outreach. For us, here are the 6 most important methods we found for promoting the campaign before and during the funding period.
1. Mailing List
Building a mailing list is step zero, most successful campaigns began with a few thousand newsletter sign ups that convert into their first backers. Strategies for growing a mailing list vary — most often it is some combination of Social Media, Events, Networking etc. We recommend starting really early and finding an easy way to manage it such as MailChimp.
2. Personal Network
Your personal network will likely be your first way to get the word out. For our campaign we each listed groups we could reach out to personally to ask to promote the campaign. This included meetup organizers, coworking spaces, clubs, other startups etc.
When do you do this, we found it’s quickest to give them simple directions, prewritten social media posts and at least a handful of options in how they can support you. Most often we write a form e-mail and then add a sentence or two to personalize.
Press outreach is a huge job. There are different ways to approach it basically you either have a team member that takes ownership over press outreach or to hire a PR agency to manage this for you.
There are millions of ways to handle PR but a simple strategy is making 3 lists to send your media kit and press releases before you launch.
- Priority or ‘WishList’ Press (reach out 1–2 weeks in advance)- These are the people you are dying to have write about you. Therefore you should offer them some sort of exclusive access by sending them your press info early, being available for interviews and generally giving them first dibs on the story.
- Previous Press and Niche Press List (reach out a few days before or first week of campaign)- These are press contacts that you should either tailor your pitch to because they have already written about you — or because they have a specific interest.
- Press Blast List (Send out on launch day and 4–5 days before closing)- Since time, money or manpower will inevitably limit your press outreach, maximize your impact by sending out a press blast of a few thousand journalists. This generally doesn't have nearly as high a success rate as individual outreach but can bring back some surprising connections.
Events are a great time to promote your campaign as well as meet your backers. For us, we tried to align our campaign timing with a number of larger startup events and design events in Europe. Events are very time consuming so it’s best to plan these far in advance and prep your team accordingly.
Attend these events with purpose — talks, pitches and stage time are a must but its also great to demo your device as a booth and have one-on-one time to connect with backers and potential backers.
New, fresh content is important for campaign momentum since the funding progress is only exciting for the first few days. To attract new backers and press you must be inventive in how to retell your story and keep people engaged. Preparing what and when you release new videos, blogs, updates etc is key.
For this we tried to really listen to our backers — when they asked specific questions (like how does nuimo connect to a computer) we responded with a video. We also tried to have some fun with how we showed functions like our post about connecting Nuimo to a gong and showing the process on our blog.
Additionally once you release content, consider how you will promote it beyond just social media and your newsletter or updates. We used reposting to Reddit, Product Hunt, LinkedIn and HackerNews to get the most out of the content we produced. Word of caution to really research etiquette and rules for using these in order avoid spamming people.
Not all campaigns choose to do ads on social media or otherwise. For us it worked well. When it comes to ads its a good idea to consider retargeting and look-alike audiences, particularly if you already have an e-mail list.
Because we didn’t have much knowledge on best strategies for paid online marketing — we simply defined our goals for the ads (what we wanted to push and how much we were willing to spend) and then let an agency handle the implementation.
Your campaign page should have one centralized story that will appeal to your market. The method by which you tell this story will be through the main video, campaign page and various updates, comments and interactions.
The central story that we told during our Indiegogo campaign was more geared toward young creative professionals who would use Nuimo with their computers for specific programs like Rhino, Adobe Creative Suite etc. The campaign showcased more workspaces - targeting the needs and requirements of designers, engineers and creatives.
The focus switched for Kickstarter and was based around the smart home integrations people at requested during the first campaign like Sonos Speakers and Philips Hue. The campaign aesthetic focuses more on domestic spaces, lifestyle and environment.
The core functionalities of the device are similar (and it can be used in both capacities) but the visuals and voice of the two campaigns were distinctly different.
Photos of the product are extremely important. Consider how they will be used and what types of photos you need before launching. For us it broke down into four main categories:
Classic Product Photos —shots of the device on a white or neutral background.
Environment Product Photos — shots of the product in a relatable environment with artifacts that are descriptive of our users.
Lifestyle Product Photos — Photos that feature the product that show our users in their environment.
Function Photos — Descriptive photos of how the device works.
For a crowdfunding campaign there is always amain campaign video. Usually people also decide to add in subsequent descriptive videos to really showcase functions and describe to their backers exactly how certain things work.
- Main Campaign Video- this video should really cover your entire campaign. The best ones are just 2–3 minutes at most and deliver all of the most important information. When you start planning your video we recommend watching a lot of other crowdfunding videos and making a list of how they are successful.
- Descriptive Videos — these videos serve as short little snapshots into how your product will actually function in different scenarios. For Nuimo we made sure to make a lot of descriptive videos on how integrations and functions work so that people could envision exactly how they might like to use the product.
The main layout of the campaign page requires a lot of consideration. Campaign pages take all different forms but we broke ours down into 4 main sections.
Section 1 — ‘Elevator Pitch’
This section is the first thing people see and should describe your entire product (in case people don’t scroll down). Think of this section of headline, main video and description as your ‘elevator pitch.’
Section 2- Problem and Solution
Since your backers can’t get recommendations from friends as they might from other consumer electronics, this is where you really outline why your solution is solving their problem. It’s a moment to really sell the vision. It’s also a good place to put press or quotes about the product to show that it has captured the interest of others.
Section 3 — How it Works
Sometimes crowdfunding campaigns can be misleading — but yours shouldn’t be! This is the place to show your backers that you know what you’re doing. We have found that the more specs you provide the better, it lets your backers know you’re qualified to actually deliver. Likewise, building out this section well will give backers better feedback for you because they can really understand what you’re doing.
Section 4 — What’s Next
This section can be built out in a lot of ways, since we have close contact with our backers it was important that they know a little about us and why we care about certain things. It’s also an important part to tell them exactly where their money is going and when. We have found that backers are very supportive (even with delays or mess-ups) as long as you communicated them correctly. This section is where you lay the first groundwork for that.
These parts can be shown in a number of ways, but generally its good to have a balance of text, photo and illustration. We found that most people prefer images over large amounts of text.
Crowdfunding campaigns tend to follow the same overall arc. The first 2–3 days are the days of most funding, followed by a period of major drop off with a smaller peak at the end.
Day one of the campaign is telling of the overall success. For the launch it’s important to let your personal contacts know when the campaign begins and to back it right away. This is also when you should be seeing your first round of press articles.
Timing is very important for the launch and you may choose to offset announcing the live project for a few hours so that it can gain some money before being made public — a type of ‘soft-launch.’ Additionally, if your main target audience is in another time zone, make sure to take them into account for timing of the launch.
The middle of the campaign is where things taper off significantly. This is a good time to plan some interesting content release and ask your backers for input on what they would like to see. If you are getting a lot of questions about a particular function — perhaps release a video about that. It is also a good time to reach out to a second round of press with particular story angles and attend events to meet new potential backers in person.
We got lucky during this campaign because a second major spike occurred with the release of a TechCrunch article. With good planning and some luck you can create a second spike- however it usually requires hitting some sort of major media outlet.
The final week is another push. This is a good time to really be attentive on your social media channels and release stretch goals or new interesting content. Also consider how you can time your communications to create urgency with your backers to help you reach a final goal.
Once the campaign ends its time to celebrate and then regroup for the next steps. The biggest misconception is that crowdfunding is free money — now you must do the hardest part which is to deliver your product.
We have discussed the design for manufacturing, and manufacturing steps that come after the campaign in depth in our other posts. Additionally you need to find a good way to keep your backers up to date, engaged and excited over the (sometimes) long wait until they get the product. We recommend talking to your backers early and often — they are your first and most important supporters, get to know them!