Crowdfunding has become an essential part of launching any new tech product – and even established brands are using Kickstarter and its rival Indiegogo.
The reason is that crowdfunding is now about more than money. Many current Kickstarters have an abundance of dough, yet use the site to collect pre-orders, generate buzz and get coverage. Others are in crying need of a cash injection.
Essential reading: Top wearable tech crowdfunding projects to invest in today
We've researched into Kickstarter in some detail before, such as our investigation into the dangers of crowdfunding.
This time, we teamed up with Heather Delaney, head of Consumer Technology and Kickstarter at Dynamo PR to give prospective crowdfunders our top tips for turning wearable whims into crowdfunded cash.
Kickstarter vs Indiegogo
Choosing which crowdfunding site is the first step to success – and Kickstarter does have the bigger community of would-be backers. However, if you're not successful in hitting your goal, you won't get any of the money. There are also strict rules about the requirements of your project as well.
Indiegogo enables you to take the money if your project doesn't succeed (subject to a 9% fee, rather than 4%) – but most backers know this, and it means people are donating to your idea rather than investing. It means that you're likely to get less money overall. However, those two big guns aren't the only options:
Heather Delaney said: "The number of global crowdfunding platforms are vast and focus on everything from equity based crowdfunding, open-source software and creative projects so it is important that you pick the right one that best reflects your project and brand. You also need to think about which crowdfunding platform your target consumer base uses."
Do your research
Kickstarter itself is a treasure trove of information for any would-be campaigner. While plenty of that knowledge you'll find right here, there's some specifics that you ought to do your research on too. Take a look at the Further Reading section of the company's handbook, which features a tonne of case studies from successful projects. We recommend reading Giff's guide to starting a tech Kickstarter.
Delaney also said you need to put as much thought into the platform as you do your strategy:
"Most crowdfunding platforms include information on their site about their audience, where backers are based, what time it is best to launch, as well as a list of the most successful campaigns. This information is invaluable and can help you with your project. So before you get started make sure you know everything about the platform you're launching on and how to best connect with your backers," she said.
Obsess over the details
A successful Kickstarter campaign is well underway long before it's live on the site. Figure out who the audience for your product is going to be and starting working out how to get hold of them.
"It doesn't pay to rush. You're going to be incredibly busy once you hit the launch button so get as much as you can organised beforehand. Make sure you are confident in your page, write your FAQ ahead of time, think about which publications would write about the project, prepare tweets and mail outs to your contacts," Delaney advised.
Marketing, marketing, marketing
We mentioned that crowdfunding is more than about raising money, so get this side of your plan spot on. Projects that Kickstarter features on its front page have an 89% chance of success – more on that later. Sadly, not everyone gets that limelight. Instead, it's going to be up to you to work those contacts lists that you created before your campaign went live.
Get decent images, take your prototypes to show off to journalists and let them take their own shots – Pebble, pictured, did a great job of distributing and controlling their images, and the same shots are still used today. Make a Dropbox full of decent pictures, information and provide a clear way to contact you. You wouldn't believe how many projects don't have a single picture decent enough to use on the front page of the site.
"Talk to your contacts, share the page on social media, speak to the press and the crowdfunding platform to feature the project on the main page," said Delaney. "Make sure you have everything available including images, logos, product details and specs so that you do not have to rush around desperate to find it last minute if the New York Times call."
Timing is everything
The length of your fundraising campaign is up to you. It can be as short as a week or as long as 60 days. That said, the stats point to a 30-day project as the most likely for success. They have a 35% chance of making it.
As well as choosing the amount of time it's going to run for, you should also have a good look at the calendar too. It's no good launching on a Friday and pointless trying to get donations in months like January when everyone is financially crippled.
There's a precedent for this, as Delaney pointed out:
"Take Coolest Cooler, launching in winter and the campaign failed, launch in summer when the weather is hot and people are desperate for a margarita and you've got a $13million+ campaign."
Set a realistic target…
"You're on Kickstarter for a reason, you need the community to help your dream become a reality. You need to think carefully about what you need to go into business. If you set your goal too low then you can't move forward despite your project succeeding. On the other hand, you don't want to set your goal too high, even if you think your project will raise $10 million. The Kickstarter community is savvy and they will have a good knowledge of what you need and if you're being greedy," said Delaney.
Budget realistically, and break it down on your campaign page. If it looks realistic, it's going to instil confidence in your would-be backers. Finally, don't forget to add just a little bit more. Remember that Kickstarter and PayPal are going to take their cuts, and you'll want to leave yourself a little bit of breathing space.
...And set about it quickly
When dealing with crowdfunding, one of the biggest turn offs is campaigns that are lagging behind their target. Use your marketing tactics to try and get off to a roaring start. Generate interest before you launch and light that bar up green fast. It will increase your chances of getting on the Kickstarter homepage, and more people will invest if there's a good chance of you hitting your goal.
Errett Kroeter, of Bluetooth SIG who helps startups using Bluetooth tech get to market agreed:
“Potential investors will be looking at how fast you meet your goal. Setting a relatively lower target that funds quickly will be more impressive to them than one that takes a long time to meet a higher target," he said.
Pitch your incentives properly
Stats suggest that most people pledge to the tune of $25 so it's not all about those big-money pledges.
Kickstarter guru Heather Delaney had some tips for this, too:
"For every pledge level you need to offer something your backer wants, otherwise they simply won't back. The Kickstarter community loves a bargain and exclusive options proving they were there first so make sure you're giving them the best possible prices."
Tell your story
People need to believe in your product if they're going to back it and to believe in what you're making, they're going to need to believe in you. Telling your story - who you are, what you've done before, how you came up with your great idea and why it's important to you to make it happen - is the most important part of that. Tell the crowd how your idea is going to change the world and, if that's a world they like the sound of, then they'll make it a reality.
Make a video
Projects with videos succeed more than 50% of the time. People don't tend to read much online, and in fact, it's a minor miracle you're still with us here. Pictures and videos help explain it all without having to ask too much of your audience. It doesn't have to be a big budget affair with special effects and a cameo from LeVar Burton.
"The video is key," assured Heather Delaney. "It's the first thing people will see when they open your page. It's a great way to visually show your product and how it works. However, keep it short and sweet, and real. People will make up their mind pretty quickly so a long video full of tricks won't fool the backer!"
Be realistic on the timing
Turning a brainchild into an object of reality takes more time than you'd expect. Things will go wrong. Your prototypes will need alterations, your tooling will be delayed and you'll realise that you need plug adapters for all the nations of the world. That said, a timescale that's too far in the future will put off those about to lay down pre-orders: who wants a smart dog bowl in four years time?
"Don't put too much pressure on yourself," advised Delaney. "Always give yourself a buffer period because everything will take longer than expected and it is better to deliver on time, or in best case scenario early."
Keep the crowd informed
Your backers are just more than dollar signs. Once they've pledged their cash, they're going to expect to know what's going on in the run up to being the one of the very first people on the planet to get an entirely beta, semi-functioning version of your Wi-Fi sock.
"When someone backs your project they instantly become part of your community. You need to keep them updated with everything that's going on both the good and the bad," said Heather Delaney.
Crowdfunding isn't easy, but even unsuccessful campaigns can have their benefits. So follow our steps, talk to other Kickstarter successes and good luck.
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