Delving into the many layers of startup funding during the Covid-19 crisis It’s the question that’s been on everyone’s minds: what happens to startup funding in the age of Covid-19 when no business can reliably be expected to survive? With fewer resources, little experience in weathering [...]
Jumpstart talked to three startups that have successfully navigated the choppy waters of crowd funding to hit their target and get the funding needed to launch their products into the market. Here’s what we learned:
1. Choose your platform carefully
Today the crowd funding market place is indeed getting more crowded. With so many platforms to choose from, the right one for you will depend on your aims, target audience and sector. Whether Fundable, Bolstr, Crowdrise or Indiegogo, it pays to get to know each in detail before you commit. For Niwa, the established reputation of Kickstarter meant there was little competition. “85% of total crowd funding transactions on the web go through Kickstarter,” says Aga. “It also has the highest amount of pledges, for us this made it really attractive over any of the other platforms”.
Whilst Niwa was thinking global, Ezeecube selected the smaller, but mighty Indiegogo precisely for its local market appeal “We wanted people to know that we were based in Hong Kong and Indiegogo was the better option for this. In addition it didn’t require us to incorporate in the USA”. ZCan also chose Indiegogo for its local appeal, but mainly because speed was of the essence. “We went from planning to official launch of our campaign in just three weeks. Indiegogo worked for us because its approval time is shorter,” says Sam.
Whatever platform you end up going with, be sure to do your homework and choose the one that’s the best fit for your products, resources, budget and time constraints.
2. Build a community in advance.
Getting an army of supports to build momentum around your product is not a process for the faint hearted. Whilst it can be done on the cheap, it takes time, commitment and ongoing graft. One of the key things Niwa’s founders took away from their campaign was the importance of building this community well in advance of the launch. “As soon as possible identify your key industry influencers and connect with them – whether bloggers, journalists, or people with a big social influence,” says Aga. “Be active on social media, do guest blog posting. Startup events like pitching, conferences, appearances can also help you get leverage at the beginning”.
Getting support from those with big networks can help create a great chain reaction, but that doesn’t mean you should overlook those closet to you who can be equally valuable. For Ezeecube, leveraging the support of friends and family was what helped them find their footing on the long climb to their target. “In the first week the biggest source of traffic for us was our close friends, family and professional network which helped us raise USD$12,000,” says Ashok. “This made the campaign look more trustworthy and helped bring in other backers”.
Some great tools for engaging with your community recommended by our interviewees include Prefundia for getting bakers before you launch your campaign, MailChimp for email direct marketing and Quickmail for follow up and outreach. During your campaign, Sam advises not to let up on engaging with your community as it grows, even if your fund is approaching its target. “Be sure to keep the momentum throughout, and keep supporting your backers by keeping them in the loop with how things are going. Post ongoing updates and respond to any inquires or feedback within 24 hours – whatever the time zone! Let people know you care about their comments”.
3. Create a compelling pitch
Whilst having a great product is essential for any campaign, the story you tell and how you present it are equally important. Sam says it’s imperative to be genuine and true to what you are trying to do in order to build trust. “The important thing is to show people who you are. Backers are just as interested in the person behind the scenes making the product as the products itself. Ensure you have good marketing collateral, a strong landing page and good content, including a great pitch video to give people a better idea of the real you.”
One thing that’s been proven time and time again with successful campaigns is how you should never underestimate the importance of creating a good video. However, making it doesn’t have to cost the earth. Like all good bootstrapping startups Ezeecube’s approach was to make something good, but to keep costs low. “Professional videos can cost between US$5,000 to US$15,000, we did it ourselves for less than US$1000. We got a freelance videographer to help edit and shoot and edited some bits ourselves in iMovie”. It’s been said that you only have four seconds to connect with the viewer of your video before they make a decision to stay or go; good editing, a good script and good direction can make all the difference.
As well as the video, Niwa put a lot of energy into the campaign’s copy, particularly the tagline. “We spent weeks redoing it, thinking about our brand, our message and our target group,” says Aga. “We developed different marketing personas representing our potential customers. We wrote three potential taglines, and got feedback from our family and community before selecting the winner.” When thinking about your tagline, Aga advises thinking about your value proposition- what benefits are you providing? What’s your vision and bigger impact? What feelings do you want your brand to evoke? Considering each of these in turn can not only help you create a killer tagline, but also gain that all important trust and legitimacy.
4. Put in place effective PR and marketing
You know your product is amazing, but the only way the rest of the world will find out is though effective marketing and PR. Each of our interviewees agreed that contacting journalists in advance of your launch was one of most important elements of a successful campaign. Although plugging your product to journalists can be a little intimidating if you’re unsure of how the media works, doing your homework on journalists already writing about related news or products, sending them a short and sweet personalised email and suggesting a few story angles helped each of our interviewees get into their target media. “It’s also a good idea to send some demo units to reporters for review in advance and ask them to align coverage with the campaign,” says Ashok. “In our PR we saw a spike in backers when we gained coverage on some big blogs like Engadget and Techcrunch and from there it got picked up on regional blogs. However, be sure to line up PR at least 6 weeks in advance to make it newsworthy. It’s very difficult to get coverage after your campaign is launched,” he says.
Whilst contacting journalists ahead of time will help you reserve a spot in their editorial calendar, it pays to be strategic with how much effort you put in, as the payoffs may not always match the rewards. All of our interviewees agreed that it’s tough to get coverage once your campaign is launched. At the rate the media moves, even getting in touch just a few days after the start of your campaign may mean it’s considered ‘old news’. For Niwa, the initial launch period was the most intense and fruitful time in terms of PR. “In the first 24 hours we got over 40,000 visitors, after that it plateaued. To be honest after the initial momentum was gone it was very hard to keep it going. We saw spikes when big papers or magazines wrote about us and we got a few sales a day, but even though we were snowballing media, it was hard to keep the momentum going”.
In terms of marketing, social media is a no-brainer and whilst each of our interviewees harnessed a range of social media platforms to different extents they did so in combination with other strategies. “Social media helps to create the buzz around the product, and it did bring initial traffic to us, but social media can wear out after a while,” says Ashok. “I’m not sure if social media alone can get you fully-funded depending on your campaign goal and it certainly doesn’t undermine the need to have good PR”.
An area not to overlook in your PR strategy is the power of the various crowdfunding platform you’re promoting yourself on. For ZCan, Indiegogo itself was a major source of traffic. “Our tipping point came when Indiegogo sent an EDM about us. They were incredibly effective because they have such a big database”. Ezeecube also found similar success with the support of their crowdfunding platform, following being featured in the Indiegogo newsletter they raised US$20,000 in just three days.
Aga, Founder and Business Development, Niwa
A smart-phone controlled growing system
Amount Raised: $151,173
Ashok, Founder and System Architect, Ezeecube
An automatically sorting stackable media box
Amount Raised: $146,666
Sam, Founder, ZCan Wireless
The world’s first wireless scanner mouse
Amount Raised: $112,868
By Kimberley Hobson