A few years after college, I quit my first real job, as an accountant, to travel for a couple of years. That experience gave me an idea for a product - a convenient, nutritionally balanced meal for on-the-go - and when I got back, it was time to pursue a longtime goal: start a business. A few thousand bucks left over from savings helped turn the idea into a viable product, and our company, Greenbelly, was born.
But my savings were not enough to market and manufacture the product. I needed more money.
My traditional choices had drawbacks: 1) Bank loan - No one likes debt - especially me. 2) Find investors; sacrifice some ownership and spend time searching for deep pockets.
Instead, I chose crowdfunding. Crowdfunding is designed to gain funding from a large audience by launching a campaign in hopes of reaching a financial goal within a period of time. The business owner offers different rewards to incentivize backers to contribute to the campaign.
I chose Kickstarter as my crowdfunding platform. Kickstarter has several key advantages.
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First, a large audience. Over 8 million people have backed a Kickstarter campaign, and the website would direct a lot of eyeballs to our venture. Second, Kickstarter would allow us to test the market. Without overinvesting in production, we could test if people were actually interested in spending money on our product.
There was no guarantee we would reach our fundraising goal, and if we didn’t, Kickstarter would give us none of the donations we had secured. But I liked my odds.
I knew nothing about how to run a crowdfunding campaign. I started off Googling “How to Kickstarter.” It became obvious that running a successful campaign is a lot of work. It can take months of preparation – detailed cost analysis, customer traction, social media following, email lists, media relationships, a video and other things that we didn’t have.
In October 2014, I set a plan in place to launch our Kickstarter on March 3, with a goal of $10,000 within 30 days. With a borrowed camera and free Photoshop trial, we cranked out a video. My company’s social media presence was non-existent, so we got to posting. From there, I made a list of “influencers” - bloggers, magazines, athletes, anyone who had a reputable voice in our target market. We then sent out free samples of our meals to all of them.
When March 3 came, we already had customers in 47 states and 8 countries. We reached our $10,000 goal in 36 hours. The campaign continues until April 2: bit.ly/bellykick.
A few tips from our journey:
1) Set your goal low and hit it fast.
Set your financial goal as low as you possibly can while still being able to cover costs (typically rewards). Throw all efforts into launch day - don’t “spread out” your efforts over the course of the campaign. Utilize the snowball effect and build off your early momentum and quick success. For the same reason no one likes eating at an empty restaurant, people will gravitate towards a successful campaign.
2) Involve potential backers as early as possible.
People love to feel like they are contributing. Create an email list and ask your friends or customers for their opinion on your campaign video, strategy, packaging, etc. They will love being on the team and watching your project develop. Their feedback will be helpful and they can turn into your most loyal fans.
3) Use your personal email.
Your first big support wave will be from friends and family. Don’t alienate them with an impersonal MailChimp-type blast. Use your personal email address. You’ll get a much higher response rate.
4) Provide early-bird rewards and leverage them.
Don’t email blast everyone in your circle with “Please back us!!” On launch day, send an email offering friends and customers the first opportunity to get your new product at a discount for a limited time. They will appreciate the chance to save money, and it can generate needed early momentum.
5) Allow months to plan.
Clever marketing ideas will come. Email lists and relationships will build. You will learn things by planning properly and not rushing.
6) Budget and plan your rewards.
Your rewards will typically be whatever product or service you are creating. But how much will it cost you to create each reward? How much to ship to California vs. Mongolia? On top of these costs, factor in the 9 percent Kickstarter and Amazon fees.
7) Time your launch.
Time of year, month, week and day are critical: Never near a big holiday. Consider if your product might benefit by the season. Beginning of the month is preferable - after payday. Day of the week: Tuesday or Wednesday. Mondays are too busy, and after Thursday, people gear up for the weekend. Time of day: 10am - 1pm EST so the West Coast crowd is awake as well.
8) Be ready.
Have a Dropbox folder ready with product photos and content to post to make it easy for anyone to write about. Create an auto-email response that you will get back to your backers ASAP. You will be busy on launch day!
Christopher Cage of Newnan is founder of Greenbelly (www.greenbelly.co).