Crowdfunding workshop 48 west-feb-16-2013-propel arizona
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Crowdfunding workshop 48 west-feb-16-2013-propel arizona

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Hands on Crowdfunding Workshop by Propel Arizona

Hands on Crowdfunding Workshop by Propel Arizona

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  • 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 workshop 48 west-feb-16-2013-propel arizona Crowdfunding workshop 48 west-feb-16-2013-propel arizona Presentation Transcript

  • 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?
  • The Funding Gap
  • Concept to Product to Growth
  • Concept to Product to Growth $ $ $ $
  • Concept to Product to GrowthEntrepreneur IPO $
  • 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 $ $ $
  • Source: http://theyec.org/making-sense-of-the-jobs-act-and-crowdfunding-infographic/
  • 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
  • • Source – http;//crowdfunder.com
  • • Source – http;//crowdfunder.com
  • Real Crowdfunding – that works. Today
  • Rewards-based, Donation Crowdfunding:“THE KICKSTARTER MODEL”
  • ALL OR NOTHING
  • Perks &Rewards
  • Updates (and Blogging)
  • Updates (and Blogging)
  • Comments & Engagement
  • 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)
  • Source: http://KickstartersHQ.com
  • WHY … Do people Crowdfund?
  • 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,”
  • http://www.kickstarter.com/projects/1104350651/tiktok-lunatik-multi-touch-watch-kits
  • “Consumers who want products before they are developed” Pre-orders Early adopters Supporters http://trendwatching.com/trends/infographics/presumers/
  • The Kickstart Model..UH OH …
  • 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
  • What does success look like?
  • • 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.
  • What do successful campaigns have in common?
  • http://www.kickstarter.com/projects/hop/elevation-dock-the-best-dock-for-iphone
  • Projectiohttp://www.kickstarter.com/projects/1209578799/projecteo-the-tiny-instagram-projector
  • http://www.kickstarter.com/projects/1719196889/iceblink-engine?ref=home_location
  • http://www.kickstarter.com/projects/812916345/magnet-comic-a-custom-magnetic-and-dry-erase-comic?ref=home_popular
  • http://www.kickstarter.com/projects/mikebond/ti2-sentinel-titanium-cache?ref=home_popular
  • http://www.kickstarter.com/projects/poots/kingdom-death-monster?ref=home_popular
  • http://www.kickstarter.com/projects/smartthings/smartthings-make-your-world-smarter?ref=category
  • http://www.kickstarter.com/projects/thejumpshot/jumpshot-a-new-weapon-to-battle-pc-frustration?ref=category
  • http://www.kickstarter.com/projects/374405221/mary-elizabeths-sock-the-first-book-collection?ref=home_location
  • http://trendwatching.com/trends/infographics/presumers/
  • Crafting aSuccessfulCrowdfunding Campaign
  • Some initial rules ….
  • 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
  • Componentsof aCrowdfunding Campaign
  •  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
  • Crafting the “Pitch”
  • 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!
  • Exercise –Craft the Pitch
  • Crafting your PitchTitle & 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, ImagesTeam, Deliverables, DetailsPerks & 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
  • Visuals
  • 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!
  • Perks & Rewards
  • American Grandmaster a Patrick Million FILM Directed by Patrick Million Executive Producer CJ Cornell
  • Rewards Crowdfunding • Incentives & perks • Pre-Orders • Pre-Sumers • Market Validation
  • Rewards don’t have to worth $$
  • • $25 perk is the single most claimed perk, representing nearly 25% of all perks that are selected.• While the $25 dollar perk is only responsible for raising 11% of total funds.
  • • $100 perks raise more money than any other perk price and make up nearly 30% of total funds. A $100 perk combined with the next three perk price points: $50, $500, and $1000 makes up about 70% of total money raised by perks
  • someRules for Rewards
  • 1. Make perks unique & exclusive Avoid T-shirts, Mugs & Hugs
  • 2. Target them
  • 3. Give them a connection
  • “The Cocktail Party Effect”
  • “The Restaurant Effect”
  • “The Carey School Effect”
  • The less tangible the perk, the more public (visible) & EXCLUSIVE it needs to be.
  • The Campaign
  • How much $$ ?How long?
  • 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
  • Now that you‟ve launched … Continue the story
  • 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
  • Metricshttp://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and-steady
  • Metricshttp://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and-steady
  • the importance of google analytics to track and improve performance• + perks from fivvr•• http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and- steady
  • Success Factors
  • http://online.wsj.com/article/SB10000872396390443855804577601013094084438.html?mod=googlenews_wsj#articleTabs%3Darticle
  • http://www.indiegogo.com/blog/2012/05/indiegogo-insight-campaigns-that-take-these-six-actions-raise-8-times-more-money-than-campaigns-that-dont.html
  • http://www.indiegogo.com/blog/2012/05/indiegogo-insight-campaigns-that-take-these-six-actions-raise-8-times-more-money-than-campaigns-that-dont.html
  • http://www.indiegogo.com/blog/2012/07/indiegogo-insight-winning-the-middle-game.html
  • 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
  • The most important secret is …
  • Showing Momentum (the perception of momentum)
  • The most obvious secret is …
  • Credibility = trust, competence & follow-through
  • www.propelarizona.comCrowdfundingEntrepreneurship & InnovationArizona Economic Growth
  • Practical Crowdfunding Workshopwww.propelarizona.com @PropelArizona