Crowdfunding – 5 things that can help you to succeed

One hour after the launch FlowMotion startup reached their campaign goal – 30.000 USD. 45 days later the campaign ended, on 10th of January 2017. They have raised total USD 1.325.241 from more than 5000 backers.

  • How to go from 0 to USD 1.325.241 in 45 days
  • Study, prepare and execute
  • Reward-based or equity-based crowdfunding?

One hour after the launch FlowMotion startup reached their campaign goal – 30.000 USD. 45 days later the campaign ended, on 10th of January 2017. They have raised total USD 1.325.241 from more than 5000 backers.

FlowMotion was founded in 2015 by Didrik Dimmen, Eirik Dyrseth, Julie Bauge og Lars Flesland. Their plan was to raise money for production, pre-sell a unique smartphone stabilizer and make professional videography available for everyone. They had no idea that their crowdfunding campaign on Kickstarter, would do so well.

How did they do it?

Prepare and build a community

Crowdfunding is a practice of funding a project or venture by raising monetary contributions from a large number of people. Bauge is one of the masterminds behind the campaign. She says that every part of your campaign should be of high quality and show consistency. It all has to speak the brand identity.

How much did you work on your campaign?

“We decided early on that we wanted to launch our product through Kickstarter. That’s why we spent the last seven months before the launch working on the campaign and actively building a community of followers.”

“It is crucial to get your campaign in front of as many people as possible, especially during the launch. That’s why you should talk to journalists and influencers prior to your launch to spread your campaign.”

Learn the algorithms

To target potential customers, FlowMotion used Facebook as their main channel.

“Kickstarter’s algorithms work in the same way as Facebook and Instagram. The more initial engagement you achieve, the better placement you get. We spent a lot of time experimenting with different targets to find out how to gain the most engagement to our Facebook-posts.”

“During the campaign, we were 2-3 people working full-time on running the campaign, contacting the media, doing marketing and PR. There was always one person responsible to answering questions from backers. We got emails from people all over the world.”

Bauge adds that although you are busy with your campaign, don’t set the entire business on hold.

“The product development should keep going, so that when the campaign is over, you are ready to start the production process.”

Create trust with your backers

Bauge has studied at NTNU`school of entrepreneurship. During her master’s degree she wrote a thesis on the subject of crowdfunding. She says that the biggest challenge with crowdfunding campaigns is to create trust.

“People have to believe that your company has what it takes to deliver the products in the quality you promise within the timeframe you set. This challenge gets harder and harder to overcome since many crowdfunding campaigns fail to deliver. Therefore, communication with backers and transparency is key to achieve success with crowdfunding.”

What do you do when the campaign is over?

“When the campaign ends, that’s when the real work begins. Be transparent and honest about the process towards the delivery. Even if you are running behind schedule or meet a technical challenge, tell your backers.”

“Most Kickstarter backers understand that things might be delayed. But if you lie to your backers, they will not be happy, and you end up ruining your own brand.”

Reward-based versus equity-based crowdfunding

Campaigns on Kickstarter are reward-based. It means that backers can support your project by buying your product before it is released.

“It is a great way to test if there is a need for your product, and if people are willing to pay for it. It can also be a great way to finance your first production round.”

“Reward-based crowdfunding is mostly used for innovative hardware products, where people back a new product that is so game changing that it is not possible to buy anything like it in a store. But it is also great for culture projects or software products. For example, the video game Double Fine Adventurer, which raised USD 3.3 million from over 87k backers. Or culture projects and innovative consumer hardware products.”

FlowMotion has also tried equity crowdfunding, where you sell shares in your company to the crowd.

“As a B2C company, we saw this as an opportunity to include our fans into our brand. We now have 85 people who have invested in the company, are rooting for us and helping us spread the word about FlowMotion.”

“I believe that equity crowdfunding can be suitable for all kinds of businesses, as long as you are willing to give up a part of your company and treat your crowd investors as what they are; investors.”

Summary

  1. Plan your campaign many months before the launch
  2. Gather everything that can be useful, from relevant contacts to great photos and videos you can use in the campaign
  3. Learn Facebook and Kickstarter algorithms before you start, so that you target and engage your audience in a most effective way
  4. Keep in touch with the media, backers and potential customers through the whole campaign
  5. Always be transparent and honest about it with your backers.

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