People – who, the target(s) niches … why … what is important to themPitch – cool, intriguiing, MAKES THEM WANT to BE A PART OF YOUR JOURNEY! AND GET OTHERS TO JOIN!
Crowdfunding Hands-on For Entrepreneurs WYNTK * (what you need to know)48-West , 16 February 2013 CJ Cornell – Propel Arizona
„Serial/Parallel Entrepreneur” 10+ companies $250M Funding 4 Exits (great !) $3B Revenues 4 Failures (awful !) Lots of lessons. Chaos, Pain and Joy. Investor/Venture Capitalist EIR, Venture Partner Angel Investor 5 Companies 9 Boards 3,000 Tylenol Caplets. Ego and Brain Atrophy.CJ Cornell University Professor@cjcornell Professor of Digital Media & Entrepreneurship Arizona State University, SJSU, Stanford (Lecturer) New York Institute of Technologycj@cjcornell.com Knight Center for Digital Media Entrepreneurship Research in digital media, behavior, entrepreneurship Advisor/Mentor, Author etc. ASU – Skysong, Venture Catalyst, RSS etc Arizona Commerce Authority / Venture ready Arizona Innovation Challenge Book: Age of Metapreneurship. Blog/Articles
Agenda1. Crowdfunding overview2. Crafting the Idea and Campaign3. Preparing the Visuals4. Perks and rewards5. Running the campaign6. Success factors www.propelarizona.com Crowdfunding Workshop
What is Crowdfunding? … and why should you care?
Concept to Product to GrowthEntrepreneur IPO $ VentureEntrepreneur Capital IPO $ $
The Kauffman Index of Entrepreneurial Activity is a leading indicator of newbusiness creation in the United States. In 2012 - The state with the HIGHEST level of Entrepreneurial Growth was … Arizona.
# 1 in Entrepreneurial Growth # 46th in Venture Capital $
Concept to Product to GrowthEntrepreneur IPO $ VentureEntrepreneur Capital IPO $ $ Angels, VentureEntrepreneur accel & incub Capital IPO $ $ $
Concept to Product to Growth Angels, VentureEntrepreneur accel & incub Capital IPO $ $ $ $ $ Crowdfunding
Concept to Product to Growth Angels, VentureEntrepreneur accel & incub Capital IPO $ $ $ $ $ $ Crowdfunding Crowdfunding
Concept to Product to Growth Angels, VentureEntrepreneur accel & incub Capital IPO $ $ $ $ $ $Crowdfunding $ Crowdfunding Crowdfunding
Concept to Product to Growth Angels, VentureEntrepreneur accel & incub Capital IPO $ $ $ $ $ $Crowdfunding $ Crowdfunding Crowdfunding Crowdfunding $
WYNTK(what you need to know) CrowdfundingSoliciting & Collecting relatively small amounts of money (“funding”) from a large number of people (“crowd”)
“Crowdfunding is a term used to describe individualscoming together to support – and directly fundprojects by other individual and organizations. “http://blog.intuit.com/trends/crowd-power-what-is-crowdfunding-infographic
Kickstarter (2012)2.2 million people pledged a total of $319,786,629(up 221% from 2011)Backers pledged $606.76 per minutePeople in 177 countries backed a project in 2012(Thats 90% of the countries in the world)
Lessons from Ethan Mollick‟s “The Dynamics of Crowdfunding: Determinants of Success and Failure”
3 Why’s: 1. They connect to the greater purpose of the campaign three main reasons why people unconnected to a 2. They connect to a physicalproject or business would aspect of the campaign like the support it: rewards 3. They connect to the creative display of the campaign’s presentation What Is Crowdfunding And How Does It Benefit The Economy - Forbes http://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefit-the-economy
• Passion – For the technology – For the industryThe Real – For the cause (Crowdfunding) – For the product Why’s • Affinity – For the Entrepreneur – For the region, industry etc • Connection • Every reason BUT R.O.I. …
WYNTK (what you need to know) Crowdfunding is about …emotional ROI. Not financial ROI
WYNTK (what you need to know)(when crowdfunding …) “its not what you do, but why you do it,”
WYNTK(what you need to know)1. Crowdfunding = New “1st Money” for ventures ($10k - $50k average– but wild exceptions)2. Equity Crowdfunding is Still Far away3. Rewards based Model IS Crowdfunding today4. All or Nothing Crowdfunding – Standard5. Perks and Rewards: Pre-order Crowdfunding6. Social Media & Content Intensive www.propelarizona.com
• The iPhone-friendly Pebble watch earned $7.6 million more than its $100,000 goal.• And the Galileo iPhone platform closed its Kickstarter campaign at $702,000, far surpassing its $100,000 goal.
• Ouya raised $2 million in one day for a new Android gaming console (it’s raised more than $5 million to date),• the Nifty MiniDrive, external memory for Apple MacBooks. The tiny storage company is more than 2,000% above its $11,000 goal with 15 days left in the campaign.
WYNTK(what you need to know)1. Crowdfunding takes work, new skills.2. It takes a strategy, and preparation.3. The rules are different.4. You can’t just post and run …5. It’s a public success or failure – that “stays on your resume” www.propelarizona.com
Title & Short Description • (repeatable & compelling) Long Description (“The Pitch”) • Make it a story … about “them” Visuals: Video, Photos, Images Team, Deliverables, Details Perks & rewards Funding Goals: Amount and Timeframe Updates & SOCIAL MEDIA CAMPAIGN • Repeatable Messages • Daily “routine” • Traditional marketing too
First: Who What Why When …• The 3 Who’s: – Who are the donors? (affinity & passion) – Who is benefits? (the market) – Who are you?• The 3 Why’s – Why would your donors care? – Why does the market care? – Why are you the right team to do it?
First: Who What Why When …• What is your project & goal? – Understandable & Simple – Compelling & Intriguing – Repeatable & Memorable• How and When – How will you achieve your goal? Realistic? – When, after funding? When will I get my perks?
Other Tips• Tell a story• Make it about them• The History of the idea is intriguing• What is the Impact? – why is this important?• Try a FAQ• Call to action – get them involved!
Crafting your PitchTitle & Short Description The 3 Who’s: •(repeatable & compelling) Who are the donors? (affinity & passion)Long Description (“The Pitch”) Who is benefits? (the market) •Make it a story … about “them” Who are you?Visuals: Video, Photos, ImagesTeam, Deliverables, DetailsPerks & rewards The 3 Why’s Why would your donors care?Funding Goals: Amount and Timeframe Why does the market care?Updates & SOCIAL MEDIA CAMPAIGN •Repeatable Messages Why are you the right team to do it? •Daily “routine” •Traditional marketing too What is your project & goal? Understandable & Simple Compelling & IntriguingTell a story Repeatable & MemorableMake it about themThe History of the idea is intriguing How and WhenWhat is the Impact? How will you achieve your goal?Why is this important? Realistic?Try a FAQ When, after funding?Call to action – get them involved! When will I get my perks?
Pitch Notes - 1• Who (donors, market) • Impact (on the market)• “Why” – the story • Impact (on the donors)
Pitch Notes - 2• Story, and History … • Perk Ideas (what’s important to donors)• FAQ • Calls to Action
The Importance of Visual Media• 64% of successful campaigns in had pitch videos.• Campaigns with videos under 5 minutes were 25% more likely to reach their goal than those with videos that were longer.• Average campaign video length for campaigns was 3 min, 27 seconds. Campaigns that reach their goal are 16 seconds shorter.• On average, successful campaigns uploaded 6 media to their gallery.• http://blog.indiegogo.com/2013/01/12-insights-for-2012.html
7 habits of highly successful crowdfunding campaigns1. They already have fan bases2. They build off of something familiar3. They are simple4. They are (usually) NOT about the company5. They appeal to a specific interest ….6. They are BUZZWORTHY ….7. They work really hard at it!
• $25 perk is the single most claimed perk, representing nearly 25% of all perks that are selected.• While the $25 dollar perk is only responsible for raising 11% of total funds.
• $100 perks raise more money than any other perk price and make up nearly 30% of total funds. A $100 perk combined with the next three perk price points: $50, $500, and $1000 makes up about 70% of total money raised by perks
Discussion• How much should we raise? – Have you raised money before? Return? – Do you/did you work at a highly visible position? – *** Your social network? Large? Followers? – Idea - big market? How unique? – How much (marketing) work will you do?
HOW to Crowdfund?PUSH - Running the campaign• Social Media• Comments & Updates• Networking• Personal Pitches
Your mission: To get them talking about your project
Social Engagement– Transparency & Trust– Social Proof & Viral FX – Engagement & “The Fundamentals” – Twitter – Facebook – Blogging
most successful projects receive about 25-40% of their revenue from their first, second and third degree of connections. This could include friends, family, work acquaintances, or anyone that the owner is connected to.• http://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefit-the-economy/
1. Create:- A Facebook Account- A Twitter Account (for your campaign)
2. Tweet & Post –Frequently –Uniquely –Personally
3. Post Updates & Blog •About your progress •About the subject •About the industry •About the People
4. Go 1-1 •Reply to comments •Retweet/Repost Your fans and donors are your most powerful advocates!
5. Target, Measure & Adjust • Different Messages for different groups • Google, Hootsuite, others • Learn and Adjust focus
successful campaigns raise, on average, 49% percent of their goals during the first and last 10% of the campaign length.
Successful campaigns took an average 11 days preparing for their launch.http://blog.indiegogo.com/2013/01/12-insights-for-2012.html
Campaigns ran an average 49 days in 2012, as opposed to 60 in 2011.Successful campaigns fundraised for 39 days.
The Average Successful Campaigntook 11 days to prepare.
Crowdfunding Myths & Mistakes• Myth #1: If You Build It, They Will Come• Myth #2: Cash is Free• Making it about you• Unrealistic Expectations• Lack of clarity• No call to action• Expecting to be found: (No Marketing)• Ignoring Small Donations/Donorshttp://kickstartershq.com/articles/5-project-crushing-kickstarter-mistakes-how-to-avoid-themhttp://www.crowdsourcing.org/document/3-big-crowdfunding-myths-via-funderhut/23804
Successful Crowdfunding Campaigns Focus on The new 4 P‟s … WYNTK (what you need to know) the 1. the the the2. 3. 4. www.propelarizona.com
The new 4 P‟s of the WHO are they? What motivates them?Crowdfunding .. 1. focus on “them” – not your company Interests, Values … the the the2. 3. 4. You are pitching to “them” $$ Value is a negative driver ! It‟s a daily/hourly effort … TELL A STORY !! UNIQUE SOCIAL MEDIA WHY is more important than $$ It‟s about THEM It‟s a conversation … VIDEO(s) & VISUAL(s) EXCLUSIVE UPDATES, BLOGS, NEWS Tell the story in small „chapters‟ And what is important to “Them” Provide Value, and Talking Points VIDEO(s) & VISUAL(s) FIRST RE-POST, TWEETable And even smaller “sound bites” Make sure it is … It‟s about … for their network Give them a Story they BUZZWORTHY VALIDATION & EVIDENCE can tell to others. www.propelarizona.com