Guide to Crowdfunding (that's not boring & actually helpful)
As recently as 10 years ago, hardly anyone knew anything about crowdfunding—including me.
At the time, I didn't think crowdfunding was important, but that’s because I didn’t understand solution it provides to modern consumers who not only crave good products, but also, good stories.
As I got more involved with digital marketing, people in my network started asking me to consult for their campaigns, and now I’ve worked on three campaigns, and learned quite a bit about crowdfunding.
I put together this guide from the lessons I’ve learned. I hope you find it not boring, and actually helpful.
— Lily Rothrock
What is crowdfunding?
Modern crowdfunding started in 1997 (according to this brief history of crowdfunding). It’s a way for people and businesses to raise money from large groups of people, or a “crowd.”
The basic idea:
You set up your product, idea, or prototype with a page, talk about it in a video, and enable people who would benefit from your product or solution to pre-pay you to make the thing that you’re showing them actually happen. The platform you choose handles payments and data collection from your audience, and you then deliver the thing you said you were going to do, using the funds you raised.
The goal of the campaign is to reach people who you think would be interested in investing in your project. Your work is to provide them with the right information in the right order (usually with the help of snazzy graphics) so they understand if they would benefit or receive value from backing your project.
What are common crowdfunding platforms?
The crowdfunding platforms I see used most often are:
Is crowdfunding relevant to your project?
It depends. I think crowdfunding works best if you have people who already trust you and follow you online. Ask yourself:
Do you already do the thing you want to crowdfund for?
i.e. If you want to crowdfund for an album, have you already produced one before? Or is it your first?
People will think you’re qualified to do the thing you’re trying to do if they see that you’ve already been doing it.
Do you have people online that know about your work and follow you online for that reason?
i.e. Would the people who follow you online be surprised if you launched this campaign tomorrow? Or would they be excited that they can also benefit from funding your business or project?
If you can answer yes to #1 and #2, then I would move forward with considering crowdfunding as a viable option to raise money for your project. If you can’t, crowdfunding may still be an option for you, however you will have to work a lot harder to gain an audience and build a relationship of trust with them.
It’s much easier to get people to trust and back your project if you already do the thing you want to start a campaign for, and if you have a significant online following where you talk about a topic related to your project.
Also, check out this article on 7 Questions That Will Help Tell You If Crowdfunding Is Right for You.
How much work does it take?
A lot! It’s like having a full-time job to prep, run, and wrap-up a campaign. You have to be willing to put in up-front work, without any guaranteed pay-off. It’s easy to visualize a campaign going viral and you over-funding your goal. However, actually making your campaign a success takes a lot of planning, team-work, emotional processing (I’m serious), and long nights on the computer.
How much time does it take?
A lot. Most of the work is done before the campaign launches. Not only do you need to create the campaign content (i.e. photos, video, copy, descriptions, website, social media posts), but you also want to be prepping your audience so that they are excited and ready to back and share your campaign on launch day. Depending on your campaign, a rough estimate is 1-3 months of prep time, plus 1 month of the actual campaign, then 3-12 months of post-campaign work (again, this really depends on what you’re trying to crowdfund! How long will it take you to make and deliver your promises?).
What kind of problem does crowdfunding solve?
In order to answer this question, I’ll give you an example:
When I worked on the “Prayers for Freedom” Campaign for MaMuse’s 5th album, MaMuse already successfully produced four albums. So, why did they suddenly want to do an campaign for their fifth? Why didn’t they just get a loan and start selling albums?
The simple answer is they not only wanted to raise money, but also share their message and engage with their community.
Their crowdfunding campaign was designed to raise awareness about who they are as musicians and the work they are doing. Creating a campaign content provoked them to dig into themselves, who they are, and what they do. They had the opportunity to highlight their existing collaborations, and through the campaign, they reached new collaborators that resonate with their message and music.
The campaign was not an advertisement to pre-order the album (although pre-orders was the main way the campaign was backed). If that’s all they needed to achieve, they could have set up a pre-order button on their website.
They needed an outlet to share their story (& music) with their existing audience, as well as reach new ones. That’s why they created a crowdfunding campaign.
What are the key parts of a successful crowdfunding campaign?
Let’s break down the MaMuse campaign into its five parts:
The album and campaign was announced with a contest for the album art, followed by an invite for fans to join a water blessing and music video shoot in Oakland. Yes, they were announcing that they were up to cool things, an album was on it’s way, and a campaign would be coming soon. But, they weren’t just saying — “Hey! Give us money!” They were saying, “Hey! We love you and this is our vision and we want you to join with us!” It has a very different feeling than writing, “Hey, we need money to do our thing!”, and that is KEY for success in prepping people for your campaign.
Another important strategy they used was that they didn’t go from no contact with fans to bombarding them with emails and social media posts about the campaign. They consciously started sending out 1 email a week so people would get warmed up to their increased online presence.
They key for the launch was that people were ready to hear the campaign was live. They knew we had a great video prepared. They were excited to hear the first preview of the album. It’s all about prep, and launch is just hitting “go” and starting the countdown to the campaign close. You’re not suddenly surprising people and expecting them to pull out their credit card right away.
The campaign itself lasted 1 month (30-60 days is the recommended time frame of a campaign). It was punctuated by updates that often included a beautiful video of the musicians singing a song, which was an effective way of sharing about the campaign. We posted the videos to Facebook, which generated a lot of traffic to the campaign page. We also collaborated with several aligned organizations to coordinate newsletter blasts during the crowdfunding campaign to boost traffic to our page and build trust within the community. We planned for a focused “push” the final week, and including offline contributions, we raised $10,000 over our $40,000 goal. We succeeded!
Post-campaign was all about gratitude and celebration. We made sure to thank everyone, and because MaMuse had just released their album, they planned a tour that started right as the campaign ended. It was a fabulous way to give back to the fans that backed the album, and keep the buzz growing!
In this specific situation, crowdfunding not only enabled MaMuse to fund their album, but it also helped them grow their relationship to their audience. Their fanbase increased, new people heard about their music by dedicated fans sharing about the campaign on their social media posts, and MaMuse even found a new passion: writing spontaneous songs, which was one of the rewards we came up with for campaign backers.
As one of the emails MaMuse sent out during the campaign said,
"We are not independent artists, we are interdependent artists."
~ Margot Leom
Why do so many campaigns fail?
There are different ways of doing a crowdfunding campaign. I think that a lot of people try to go for something along the lines of, “I have this great vision, don’t you want to support me?” I’ve seen copy like that again and again, and it fails to connect and inspire action in an audience every time.
The problem is, “Support the Vision!” doesn’t translate to people handing you money. Online, it sounds more like you’re saying, “Help me out! Give me money!”
It doesn’t matter how great your vision is, or how committed you are to serving the greater good. You still have to market yourself in a way that helps people see what your vision actually is, how it will help them if they help you, why you or your team are going to be successful. If you can’t answer those questions in your campaign, it’s not going to be very successful.
What do I consider important in crowdfunding?
Your story! You have to make sure you’ve really got your story dialed. People first and foremost want to know if they can connect with you, and your story is the part they are either going to love or not understand.
Also, get professional photography and videography. Get a copywriter to help you with framing your story, your about me, and your video script. Get a designer to update your website and make campaign graphics. Check all your details and grammar, and make sure your timeline is feasible. Hire an admin person to help you respond to emails and post updates.
Or, be prepared to spend a lot of time (and money) learning how to do all those things yourself.
What’s my approach to crowdfunding?
I realized that my role in working on campaigns is to raise the likelihood of the people who want to back the project to actually back the project.
Conversely, I want to make sure that the ones who don’t want to back the project don’t back the project.
That sounds so simple it’s kinda stupid, but I realize that a lot of campaigns out there use slightly aggressive, or even overtly aggressive marketing tactics in order to get people interested in their campaign. Too often, campaign backers end up with buyer’s remorse because they weren’t actually that interested in the product or service, but they got manipulated into buying.
I’m not interested in tricking people. I’m interested in bringing out the authentic, interesting story that people will naturally connect with and want to support you.
About the Author, Lily Rothrock:
I have seen a lot of business owners that cared about their clients and customers, but they didn’t seem to care enough to create a message that would actually build long-term connection. I see relationship as the container in which successful business is conducted. Making a living with what we love needs to take into account that we are trying to do something differently, and conventional approaches won’t cut it. We are human beings, and not just sales people and buyers.
I didn’t start out in marketing—it’s where I ended up. Looking back, I realize all those experiences I made, modalities I learned, and crises I went through had to do with me learning to communicate and bring my message out there in the world. As a marketer, my job is to create clarity and connection, but also to build accessibility into what my clients have to offer.