Crowdfunding can be a major boon for a burgeoning business. This can be a bit of a Catch 22, however, as crowdfunding requires a wide reach and great community engagement to be ultimately successful. Businesses that are just beginning might not have the necessary network.
We talked to Daryl Hatton, the CEO of the company Fundrazr, to get some useful advice on how to run a successful crowdfunding campaign.
If crowdfunding is all about telling your audience a compelling story, could you share a few tips or ideas on how to convery a compelling narrative in a crowdfunding campaign?
A compelling story about your need for funds IS very important. Make sure you answer the 5 W's (Who? What? Where? When? Why?) in your story in a very succinct way. But what is even more important is helping a potential contributor understand the magnitude of the problem or opportunity, its effects on you, and the impact that their contribution will make.
Describe the impact of the lack of funds on you and don't hold back. This isn't about complaining; it is about stating the facts so that there is no doubt. Then, describe how a contribution will make things better or help solve the problem. If you've done a good job of telling your story, the contributor will have an emotional response. Sometimes the emotion is sympathy or concern. Sometimes it is hope or excitement that they can help. Regardless, evoking that emotional component is important to motivate them to take action.
This topic is important enough we made a blog post and video about it: How to write an effective crowdfunding story.
Great videos are an important aspect of a successful campaign. For companies that have never made a video, how might they go about finding a good director to work with? What should they look for?
There are really two levels of video quality: very professional and good enough. If you can afford the professional version of a campaign, it is obviously preferred. Networking (you're doing that, right?) and asking other entrepreneurs is a great way to find out who is doing good work in your region. You want to look for someone who is focused on helping you tell your story in the most succinct way possible. The emphasis should be on the message and not on the production. Multiple camera angles and trick shots look great but can sometimes overdo it. If you look like you went all out on an expensive video, it can hint that you don't need as much money as you are asking for.
If you can't afford the professional version, one technique is to approach the local media schools. These are filled with students looking to make their mark in the industry but without tons of experience. They can frequently do a great job (sometimes as part of their course) at a very low cost. We're done this a few times ourselves and have been very pleased with the results.
For information on how to produce a good video check out our blog post: How to create an effective crowdfunding video.
Great photography is another mandatory feature of a successful ad campaign. Do you have any quick guidelines for how to show a product in its best light?
Unless you are a professional photographer and already know and have the tools required, the best thing you can do is find a professional to shoot the product for you. Depending on the size of the product, "doing it right" may require lots of special lighting and rigging. As an entrepreneur, know when to outsource and when to try to do it yourself. You may not have much money, but the amount of time (which is really your most precious resource) you can spend on getting the shots to look great is likely much better spent on either driving your idea forward or prepping your networks to help support your launch.
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Do you have any thoughts on how to get friends and families to support a campaign, without being overly pushy or burning people out?
Many people don't realize that getting support for your campaign from your friends and family first is MASSIVELY important. Crowdfunding works on trust and transparency. One way that people learn to trust your campaign is to evaluate it based on the trust shown by others. Getting your first group of contributions is usually very difficult (even if you have a hot product). Your friends are your best chance of making that happen. Once they have contributed, others are more likely to want to help because they believe that someone has done the work or has the experience of working with you to verify that trust.
Given that, the best way to rally support from friends and family is to be very clear about what you are asking them to do and why. We talked earlier about helping your contributors understand the impact of their contribution. This is crucial to do with friends and family if you want to maintain good relationships with them over the lifespan of your campaign and afterwards.
To put it in very straightforward terms, ask them directly for what you want. If you want them to pledge to support you, ask for that. If you want them to help you promote it to their friends, ask for that. If you ask clearly, you are more likely to get a clear yes/no answer. Once you have that answer, run with it - even if it is no. Constantly asking for help overtly (or worse, hinting at it all the time) is a great way to burn out your relationships. Being clear, asking for their help in a sincere way, telling them why their help is important and being OK if they say "no" is the only way to do it. And make sure you never, ever, over-promise them something. Your relationship with them is WAY more important than any short-term gain from getting their money under false pretenses.
How might someone go about finding Twitter users that might be willing to support the cause?
The trick with getting anyone to help promote your campaign is to figure out what the potential "win" for them is in helping you. In the case of Twitter users, the win is usually helping them a) look smart, savvy, or plugged in and b) achieve higher engagement with their community, i.e. you've given them something to talk about with their followers that the followers also want to talk about. Just asking them to promote you doesn't usually work. To get great results, you need to do the work for them and give them a good story line that incorporates their online personality. This might include figuring out a key aspect of your campaign that will intrigue them and/or their community and then writing tweets in their style that they can simply cut/paste.
Now that you know what you need to do for them, the question is how do you find users who you can help (as opposed to just looking for those that can help you)? Start searching for hashtags or words that you might use to describe your product or campaign. You are looking for a Twitter user who is considered an authority or original source for material on these topics. You should start seeing patterns in the posts. Dig into those patterns and you should be able to find the sources. From there, contact them using a DM or even tweet about them identifying that you see them as an authority. If they are paying attention, you should get a response that can start the dialog of getting them to promote you.
With the diminishing organic reach of Facebook, should companies spend time and resources on a Facebook campaign? And should they consider a paid promotions campaign?
Many people think that Facebook is becoming less relevant because it is harder than ever to broadcast a message to a large audience. If your purpose is to just try to push your message out to a mass audience, then it is no longer the mechanism for you. But you should consider using Facebook as THE mechanism to build a community around your campaign, not just an audience. A community is engaged with your cause and wants a dialogue with you, not just a one way stream of messages aimed at them. Once they engage, they can be incredibly useful at sharing your message and your CONVERSATION with their friends. This helps you engage other like-minded individuals and builds a much stronger base of support. Twitter can help you push a message to many more people, but the engagement they will have with you is fleeting at best and non-existent at worst. Facebook conversations are less temporal, i.e. they last much longer. You can actually build a base of good content that sticks around to be useful to others, not scrolls off your screen never to be seen again.
I would consider paid promotions for your Facebook page once you have created enough content there to be "sticky" enough that a user will Like you and stay engaged after they visit just once. Grow your page organically for a while, pay attention to the conversations about your product or your campaign that you can have there, and eventually you'll get to a spot that you can leverage this investment. It takes some significant effort to make this happen, but that is the new reality of social media. The Wild West days where you could use it to shout from the rooftops and actually be heard are fading behind us.
Ideally, your choice of a crowdfunding platform leverages Facebook deeply. At FundRazr, we have the ability to not only publish your campaign on our site but on your own website as well - and most importantly, directly on a tab on your Facebook page. This helps drive all the social media activity to your Facebook page and makes it easier to build your community there from even casual visitors directed to your campaign by your supporters.
Are there any other social media networks that have proven to have a particularly good ROI in your experience?
If you have a very visual product or campaign concept, Pinterest can be a great way to build a community of interest that will help share your imagery with a broad base of users. If you have a very business-orientated concept, LinkedIn can be a good place to promote it and start a community discussion about it (similar to Facebook above). I think of LinkedIn as a place to essentially blog about your product in a way that might attract a community of interest. My team tells me that certain products (gaming and gadgets in particular) do well on Google+.
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