7 Kickstarter tips to accelerate funding for your startup
May 12, 2015 2:16:00 PM. By: High Tech Campus
The last couple of weeks, we’ve enjoyed the company of several inspiring visitors to the Campus. Recently we welcomed Jon Leland, the Director of strategy and insights at Kickstarter, the New York based crowdfunding platform. He shares some tips.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 in 2009. Their site has currently raised over US$1.1 billion. And that’s set to rise further as Jon visits the Netherlands. Kickstarter is starting to strengthen its European operations. He shared the following insights with several Dutch startups during a whirlwind tour of Eindhoven, the world’s most inventive city:
1. Our primary mission is to help people create things, not to help people raise money.
Kickstarter helps creators and designers realize their ideas. That means it's really all about having the right mind-set and a powerful 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. But clearly, you need interaction before there is any talk of a transaction.
2. Crowdfunding may not be the best route for your startup to scaleup
The question for the entrepreneurs is always; how can you take an idea and turn it into a product or service that you push out to a mass market. In Eindhoven 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.
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” which means getting featured.
3. Ask for advice well before you launch a campaign!
In the six years since Kickstarter was launched, we have worked with so many startups to build successful projects. Many people don’t know that 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. Pebble, is the wearables company which has successfully used Kickstarter to raise over US$ 20 million. Actually the path to global 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 founder 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.
4. Spend time to understand your audience
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.
5. Be ready for Exponential Growth
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. Young companies would raise money and then not know how to produce their product 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.
Europe is different from the States
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.
6. Always Think Global
It is important to realise that more than the half of 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.
7. Perfect your pitch
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 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.
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.
More insights Next to Jon's visit we’ve enjoyed the company of Candace Johnson, President of EBAN who shared some amazing insights into how Angel Investors are looking more at startups with global ambitions and a strong hardware component to their business strategy. Her must-read thoughts are here.
At the same time, there seems to be an exponential growth in the global crowdfunding market, said to be worth around €10 billion today, rising to 86 billion by 2025 if the estimates in a report commissioned by the World bank come true.