At year’s end, the key question you are probably asking yourself: What makes a successful crowdfunding campaign? The answer, not as easy as the question, is many things for the different types of campaigns and platforms. What works on a massive crowdfunding platform like IndieGoGo, a global operation that features over 100,000 projects, will probably not work as well on a small, newbie platform like Crowdfunder. Kickstarter, the most famous of the crowdfunding platforms, has a 43.77% success rate. What does that tell you?
Even at the most wildly successful crowdfunding platform, less than half of the campaigns ever get to full funding. Of Kickstarter’s 32,670 successfully funded campaigns, over 22,000 were in the $1 to $10,000 range. And only 17 have passed the $1 million threshold. So a good place to start, for the practical campaigner, might be to pitch in that mid-tier.
Although the music, art and video categories have the highest rates of successful funding, gaming was one of the great breakout categories in 2012. Nine out of the 17 projects that broke the $1 million threshold on Kickstater were games. Star Citizen, which has brought in over $6.3 million in funding (their goal was $2 million) from over 90,000 fans, set the crowdfunding record for games in 2012. Star Citizen beat Project Eternity, the previous record holder, which had over $4.1 million in funding. Another example from this year is Shadowrun, which raised $1.8 million (the goal was $400,000). Shadowrun’s creator, Jordan Weisman, was named a GeekWire Newsmaker of the Year. If 2012 was the year of crowdfunding, games were the platform’s s all-stars.
The importance of social networks in crowdfunding cannot ever be mentioned enough. To whom are you marketing? This should be your social media audience—via Facebook, Twitter, Google +, etc— and the center focus of your campaign.
“Chances are if you’re crowdfunding, it’s because you don’t have that kind of money to play spendthrift with,” said John Trigonis in Daily Crowdsource. “With social networking, the campaign itself becomes the cocktail party; the pitch video is your opening speech; your perks the hors d’oeuvres; an email blast, a few Tweets throughout the day, and a Facebook status update serve not as ads, but as headlines in your very own newspaper. Think of all the money social networking saves you. No rental hall fees. No new suit. No caviar.”
Further, IndieGoGo’s blog has some great tips to increase Twitter followers. Becoming a curator, engaging with followers, and addressing trending conversations are all good ways to improve one’s micro-blogging traffic over time. Interestingly, IndieGoGo, which first went public after Sundance in 2008, has found that the most money is raised during the beginning and end of individual campaigns. If anything, this information suggests the value of perseverance.
”Raising funds at the beginning of your campaign is important because it builds confidence in subsequent contributors, a network of fans, and momentum for your idea,” writes George Xing on IndieGoGo. “The end of your campaign is also key as you can reengage previous contributors and attract new ones with a sense of urgency.”
Finally, as 2012 draws to a close, the fate of crowdfunding platforms like Fundable, which hopes to offer equity for investment, hangs in the balance. The deadline approaches for regulators at the Financial Industry Regulatory Authority – FINRA — to implement the JOBS Act, which the President signed in April. In next month’s column, I’ll review some of the big crowdfunding success stories of 2012—and how they got that way.
Any thoughts on Crowdfunding? Have you found it to be a successful way of funding creative projects? Let us know in the comments and connect with us on Twitter, Facebook, Google+, and LinkedIn.
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