Diary of a Kickstarter: Post Mortem Part I. In which I open the kimono

KIMONO

(as a reminder in case this is your first exposure to The Hawaii Project: The Hawaii Project brings you books and book news you’d never have found on your own, by tracking hand-selected sources of great books, uncovering things that match your favorite authors, personal interests and current events, and bringing them to you daily. 10% of our revenue goes to 3 great literacy non-profits. Check us out:http://www.thehawaiiproject.com. You can see our Kickstarter page here)

This is a long post. And there’s another one coming. If you want the TL/DR version just look for the stuff in bold.

Why Crowdfunding?

I decided early on in my project that I wouldn’t try to raise venture capital, even though I’ve done it before and I think I could get angel-class funding. Why? A few reasons: first, it’s not clear if this is a “venture scale” business – i.e. one that has a rational path to $100M in revenue (that’s a rough benchmark for real VCs to invest). Second, I want this to be a vehicle to raise money for literacy, and I don’t want to have to “exit” the business – i.e. sell it to someone. That’s the expectation with VC-backed company, and I didn’t (don’t) want those expectations hanging over my head just yet.

A successful consumer web/mobile/app company needs press like a fire needs oxygen. One way to get press is with funding announcements. Raise a big round of funding and you’ll usually get some press, although perhaps not the press you really need (i.e. you’ll get people interested in startups, not necessarily people interested in your product). But more and more, people are using crowd funding as their company launch vehicle, or to validate there’s demand for the product. I decided to run a crowd funding campaign, less because I wanted the money (although I did), and more as a launch vehicle to generate awareness and press, and as a forcing function for myself to sharpen my marketing. We succeeded in getting a variety of press, including Hawaii Public Radio,Xconomy, BostInno, PJ Media, Beta Boston (part of the Boston Globe) and Hawaii News Now, so on that front we did ok.

One complication I hadn’t though of was the challenge of trying to get press on a consumer product not available to consumers (The Hawaii Project was (and is, for the moment), in private beta). That makes it tougher on journalists because they’re writing about something people can’t try yet. (and they may not be interested enough to become beta testers themselves, although in my case many did). For example, I really wanted to get covered by Lifehacker, and have a contact there, but they don’t write about things that aren’t available yet. Something to keep in mind if you are going this route.

Why Kickstarter?

If you’re going crowd funding, you have choices. Kickstarter and Indiegogo are the main ones, although there’s newer options like Patreon and others with various models. Kickstarter’s model is all-or-nothing – you meet your target and get all the money, or don’t meet the target and get nothing. IndieGoGo lets you keep all your pledges. I went Kickstarter. I didn’t want to spend a lot of time researching the different platforms. Kickstarter has the brand recognition and it’s a recognizable term. You can say “I’m doing a Kickstarter” and people know what you mean. I don’t think the same is true for the other platforms. Your Mileage May Vary.

I’d advise considering carefully whether your project is a natural “fit” for Kickstarter. Mine wasn’t. Kickstarter seems to be dominated by gizmos and games. My product, book recommendation engine, which is currently only on the web, not even an app – isn’t a “usual” Kickstarter. You may find other platforms work better for what you’re up to.

Getting started – preparing for Kickstarter

First, Kickstarter is a LOT of work. It’s effectively the same as launching your product/company. So you’d better have all your marketing ducks in a row. Positioning. Features. Benefits. Brand. Logos. Elevator Pitch. Competitive Analysis. Target customer demographics. Social Media Presences. A bunch of pre-written blog posts. If you don’t know what I mean by all that, Mike Troiano’s startup marketing 101 is a great place to start. If you have visions of spending a few days writing a fun page, posting it up and getting your $10k or $100k, forget it.

I read a lot about other success stories. For better or worse, my bible was from Tim Ferris’ blog, based on the SOMA water campaign which raised $100k:http://fourhourworkweek.com/2012/12/18/hacking-kickstarter-how-to-raise-100000-in-10-days-includes-successful-templates-e-mails-etc/. That article has a variety of useful email templates, which I took and customized. With one major exception I’ll cover later, I followed their advice to a T. I studied a gazillion (that’s a technical term) other Kickstarters, trying to see the patterns and what worked and what didn’t. There are other great articles are out there. google them and read them.

Here is the article I wish I’d found months before I even thought of running a Kickstarter: http://crowdfundinghacks.com/how-kittyo-gathered-13000-opt-in-emails-in-only-5-months-part-1-includes-successful-templates-strategies-etc/. The key to winning at Kickstarter is to have won before you launch the campaign. Seriously.

I networked to people who’d run campaigns to get advice. I learned many things from those folks. I consistently heard three things:

  1. Have a GREAT video. (more on this later).
  2. Kickstarter itself will not bring you much audience. You’ll get the audience you bring/create.
  3. Don’t try to raise too much money. It’s harder than it looks. Better to over-raise, than under-raise and get nothing.

One other bit of advice I got was to have some stretch goals lined up in case the funding goes really strongly, so you can put something out there to keep the momentum going. And put up the stretch goals when you hit 75-80% of your target. In my case, I never got to that level so that became irrelevant, although I had some in mind.

The most important thing I learned was not to expect the platform (e.g. Kickstarter) to generate much audience for you. You get the audience you bring. Unless you get featured by Kickstarter (I didn’t), your project is actually pretty hard to find on Kickstarter and people aren’t just sitting there trolling through Kickstarter looking for places to spend money. You need to marshall your community and get them there. And the conventional wisdom is that the first 48 hours set the pace and establish you as something hot for Kickstarter’s ranking algorithms, so get your community to show up and contribute early.

In my case, I did well on #1 and #2 and botched #3. More on that later.

Building the Kickstarter Page and Materials

Kickstarters have a few key components: the title, the video, the story, the desired raise ($ goal) and the rewards.

The title is important. That’s what people will see in the Kickstarter pages (along with a picture). Getting people to click through is important. Here’s a little trick I pulled. I used $50 worth of Google ad spend to A/B test 6 different titles and 6 different images to pick the one with the highest CTR. (here’s a contact sheet of some of them). They were designed to look like a card in a Kickstarter result page. What I found was interesting. In an ad where the only variation was the “title”, the CTR (click through rate) could vary by as much as 3x! (i.e. the best had triple the click through rate of the worst). And I saw similar CPC variations. I chose the best and ran with it. Depending on how much you’re trying to raise and how good you feel about your tagline, this might be worth trying.

The video might be the most important thing of all. I looked at many Kickstarters and the video length varied from a minute to 8 minutes, but the sweet spot seems to be between 1 and 2 minutes long. I hired an animator and spend nearly $1000 getting it put together, and it was worth every penny. The video came out great and I’ve already used it for any number of things besides the Kickstarter. It’s worth spending money to get it right. I felt I needed to be “on camera” for at least part of it, to establish a human connection, and I found that the most difficult part of all. I must have recorded my on-screen script 50 or 100 times on camera until I got something I was happy with. (Well, I’m still not happy with it 8) but it was good enough I could stomach watching it. You’ll want music for your video. If you want to be legit you should license it. You can get “stock” music (as in “stock photos”), here’s a couple of places: http://rumblefish.com/ or http://www.premiumbeat.com/, for not much money. But I know a musician named Will Weston, I dig his music and he’s from Hawaii, so I approached him about using something of his, which he graciously allowed me to do. Check his music out here:https://willweston.bandcamp.com/

I spend weeks crafting the language of the project. Writing high quality stuff is hard work and I’m not sure I got to high quality. Polish that writing! As soon as people hit poor writing they lose confidence in you as a serious entity. That work will be repaid – again, I’ve used the language in that Kickstarter for a million other things.

I initially put the project in the Publishing category, and after a few weeks switched it to the Web category. It didn’t seem to make much difference from what I could see.

How much to raise is a key question. Set the target too high and you don’t get any money (which is what happened to me). Set it too low and you don’t get much money, and people may not feel the pressure to contribute if it’s clear you’re going to make your goal. I struggled with how much to raise. I wanted to raise $100k because that would allow me to bring on a full time partner. But I knew I wouldn’t hit that number. So I thought I’d do 50k. Then I talked to some folks and got cold feet about how much I could raise. I built a model for how much I could raise, and eventually settled on a target of $35k (I’ll talk about the model and it compared to reality in the “Promoting the Kickstarter” section). In retrospect, since my primary goal wasn’t money, I wish I’d set the goal very low (like, $5000) – most of the people who contributed probably would have anyway, and I’ve have gotten the money. Hindsight: 20/20.

Finally, the rewards. I studied a lot of Kickstarter projects, and there’s a lot of material out there about how many rewards to have, what price points and such. I built a Stakeholder map of the various people and organizations who might be interested in The Hawaii Project (e.g. readers, authors, bookstores, etc – more on this later). I designed 10 rewards, some with “bookish” things like bookmarks for rewards, and targeted some of them at particular kinds of Stakeholders. For example, I had a reward designed just for Authors. I targeted a variety of price points: $10, $25, $40, $50, $75, $100 (multiple different awards), $250 and $1000. At $250 I let people request specific features. As soon I’d pushed the launch button, I remembered I wanted to test a product idea, the idea of a personal shopping service where I bought books and sent them to people based on their profiles. I introduced that feature at $200 and 5 people chose that too. You want a good spread of price points so people can spend as much as they would like, but not so many they get confused. Some asked if there was a way to do “gift” subscriptions to The Hawaii Project, so I added that as a gift, and a number of people ended up choosing that. Here’s how my pledges broke down by value:

One last bit of advice on rewards. Naively, you might think that people are funding your Kickstarter because they want to back your vision and see it come to fruition. And that may be true. But I’ve heard from many Kickstarter vets that a better way to think about it is that people are buying early in hopes of a discount. Think of them as early customers rather than as “investors”. This means you should price your product! In the story, call out what you’re selling the product for. Make it up if you have to. Then, in the rewards, identify the price discount you are giving. I.e.

$50 Reward
Get your Frobulator (a $100 value) at 50% off with this reward!

One detail to be careful of. Kickstarter has a place to put a Google Analytics tag on your page – use it! Like a bonehead, I didn’t do that. I have a branded url I used (more on that later), so I know how many Kickstarter page views I got through that URL, but some press used the native Kickstarter URL, and those views were invisible to me, so I can’t do good conversion tracking.

OK that’s enough for one today. In my next post, I’ll cover how I promoted the Kickstarter – how I generated press, how well it worked, how I did email outreach, and the various tactics, tips and tricks I used. See you there/then.

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