Saturday, 23 March 2013

Kickstarting the gogofactor: Top tips I learned from my crowdfunding campaign

My Indiegogo crowdfunding campaign for a finance activism school was a great success. I managed to raise double my initial target, which is a good sign. I also learned a few useful things about the process along the way, which I thought I'd share with people who're thinking about running their own crowdfunding campaigns. Here they are:

Choosing a platform
There are plenty of articles on what crowdfunding platform to choose, so I won't repeat those here in any detail. I used Indiegogo because it offered the flexible funding campaign - which means you get to keep whatever money you receive even if you don't hit your target. That was appropriate for me because the perks I was offering were limited edition copies of my forthcoming book (The Heretic's Guide to Global Finance) and in a sense I was pre-selling them at a premium to fund the School. Thus, even in the event of the campaign failing to hit its target, people still would have ended up with a tangible reward.

What you don't want in the case of a flexible funding campaign is a situation where your campaign doesn't offer a tangible reward (such as a book), and where you don't put sufficient effort in to actually reach your goal, because then you could end up with initial donors feeling like they've given you money for nothing. One reason to consider using a fixed funding platform like Kickstarter (where you have to hit your target to receive any money) is precisely because donors know that their money only gets used if a critical mass of pledges to donate is reached, which psychologically charges the process and demands more of the fundraiser.

Coordinating with Paypal
In terms of fees, Indiegogo takes a 4% fee as long as you hit your target. If you don't hit your target they take a 9% fee. This is supposed to incentivise you to aim for targets that you know you can achieve. In practice, Indiegogo takes a 9% fee directly from your Paypal account every time someone donates, and then once the campaign has finished they rebate money to you so that the fee ends up being 4%.

A few words on Paypal:

  • Firstly, with Indiegogo and other sites, you need a verified Paypal account in order to receive donations. This takes several days to set up, and entails a somewhat mysterious process of entering into a direct debit agreement with Paypal via JP Morgan Chase (hence all the internet queries from people who've found JPMC RE PAYPAL INTL listed in their bank account direct debits). 
  • Secondly, you also have to have a premier (or business) Paypal account - this doesn't cost anything, but it means Paypal can charge you fees for receiving payments. 
  • Thirdly, a few days into my campaign Paypal detected that there were abnormal amounts of transactions occurring and temporarily froze my account. I had to send them documents proving that nothing suspicious was going on, which was annoying and potentially could have slowed down my campaign. So, make sure that you have updated your Paypal account (e.g. by updating your password etc.) and convinced them that you are who you say you are.

Creating a pitch
I spent a lot of time writing my pitch, but my video wasn't really good enough. People didn't mind it, but I made it in a hurry and it could have been more lively and more interesting. I'm an individual trying to raise cash, so perhaps I got away with not having a professional video, but if you can create it, a good video will certainly pay off. In terms of the pitch, Indiegogo gives useful suggestions on what to include in its campaign template. Basically, tell people what you want to do, why you should be the one to do it, how they can help, and what they'll get, and do it in as few words as possible.

Calling in the crowds
The most important part of any crowdfunding campaign is to call in the crowds. You can have a fantastic pitch and awesome video, but ain't nothing going to happen unless you ask individual people to go see your site, and to help you share it (this point is important, because even if someone doesn't feel financially stable enough to contribute, they can certainly help spread the word). Here are six channels I used:
  • Channel 1 - Email: I started out by sending emails. Group emails don't work. Personal emails do. I also used this as a means to contact people who I haven't had a chance to catch up with for a while, so actually this was very useful regardless of whether people contributed or not. I probably sent around 100 personal emails, plus a couple group emails.
  • Channel 2 - LinkedIn: Not everyone is a big LinkedIn user, but I've got 500+ LinkedIn contacts, so this was an important channel for me. I only chose contacts who I wasn't personal friends with in life (I used Facebook for friends) and I sent about 95 personal messages here. I also prioritised this before Facebook, because more distant contacts take longer to respond in general and so need to be contacted earlier. Indeed, I got some contributions via LinkedIn, but mostly it was several days after I sent the messages.
  • Channel 3 - Facebook: I did a big messaging and posting blitz on Facebook. I've got around eight hundred friends on there, and I sent around 460 personal messages to people. Yeah, that sounds like a lot, and it was pretty time-consuming (by the way, I learned that if you send a load of messages on Facebook, they begin to suspect you're a spamming machine, and require you fill out CAPTCHAs to prove you're not, so try space the messages out).
  • Channel 4 - Reddit: I posted the campaign link to Reddit. It didn't seem to work that well, but Reddit is a slightly unknown entity to me that I have not yet mastered. I suspect this could be a pretty amazing tool if you can choose the right sub-reddit and get a campaign voted up a page. It's potentially worth trying other social bookmarking sites like Digg and Stumbleupon, though I know less about how those work
  • Channel 5 - Articles: I wrote a couple articles about this, one on Liberal Conspiracy and another on Max Keiser's site. I also got some coverage from Pluto Press and the Italian site Non Con I Miei Soldi. It's hard to quantify the impact of these, but certainly worth doing.
  • Channel 6 - Twitter: Twitter was a big source of traffic for me. I tweeted from my @suitpossum account regularly, encouraged others to tweet and finally, I sent direct messages to about 200 followers. In the direct messages, I wasn't asking people to donate, I was asking them to tweet the campaign out. That got a lot of twitter coverage for me, which is turn captured a few contributions from people who I have no personal connection with.
So all in all, I sent roughly 850 personal messages to get traction on this campaign. An important element was getting those contacts to share the campaign on social media so that strangers could see it. Indiegogo also encourages you to get social media activity going in order for their algorithms to assess the popularity of your campaign (what they call 'gogofactor'). I managed to get a fair amount of gogofactor, reaching the front page of their London section and their Education section, and I also managed to get on their weekly roundup blog. That said, it's hard to quantify the effect of this - I suspect that many people casually browsing Indiegogo are actually Americans, so for a London-based project the effects of that were muted.

Collecting the statistics

So who contributed to my campaign? I had 168 contributors, and here are the stats I've collected about who they were:
  • 68 friends: These are people who might have donated because they know me, or as a favour, or a combination of liking the project and knowing me. Roughly 26 were close friends, and 42 were more casual friends. They constitute around 40% of the total number of donators, but interestingly, only 35% of the money raised, suggesting that on average they gave smaller amounts than more distant contacts (then again, I don't hang out in particularly wealthy circles)
  • 43 (friendly) professional connections: These are people who know me personally through a professional context, but who wouldn't feel under any obligation to fund me. They constituted around 25% of total donators, and around 20% of total money raised
  • 57 distant contacts, and 2nd/3rd degree connections: These are people who I did not contact and who heard about the campaign via social media, friends and articles. Around half of these people are individuals who I have some knowledge of, such as followers on twitter, or people I've briefly met at a conference, or friends of friends. The other half are strangers. They constituted around 33% of total donators, but, importantly, around 45% of the total money raised, suggesting that they gave comparatively large amounts.
The moral of the story thus, is this: Your friends and direct connections will donate to campaigns, but larger amounts come from more distant connections who hear about it indirectly. This again highlights the importance of social media and getting your friends to share on social media.

Now to the business of starting it...
So, as you can see, I now double as a crowdfunding consultant. If anyone wants more tips, please feel free to email me (see address in the sidebar). Oh yes, and now I have to actually start the School that I raised money for. More about that to come in due course. Please feel free to share your own crowdfunding tips in the comment section. Cheers!