Armstrong crowdfunding presentation public version


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Slides from my crowdfunding presentation at the University of Alabama Office of Technology Transfer's Innovation Day. I have supervised over 50 student crowdfunding projects in the past six months.

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Armstrong crowdfunding presentation public version

  1. 1. Run an insanely successful campaign Craig Armstrong, Ph.D. Innovation Day April 16, 2014
  2. 2. What is crowdfunding?
  3. 3. Unpacking the unique attributes of Crowdfunding • Your offer: unique, novel, “no one else has something like this!” – customers are backing both your offer and you • Experimentation: low up-front costs to test market interest • Validation of your product, project, or service idea: “everyone’s a liar until they’re a buyer” – paying customers = legitimacy • Reward structure: focus on uniqueness, individualization, and privilege; your campaign and rewards offer benefits to your backers’ social status • Ownership: you don’t give up any equity in your venture
  4. 4. What you get from your successful crowdfunding campaign • Control: you control everything • Money; sometimes much more than you wanted • Equity: you don’t give up any ownership in your firm • Validation of your product, project, or service • A direct conduit to shoppers • Relationships with Loyal early customers who will be your “evangelists” for future campaigns • Useful Advice: from experienced viewers you’ve reached
  5. 5. A crowdfunding campaign consists of: 1. The product, service, or event 2. The pitch 3. The video 4. The rewards 5. The funding goal 6. promotion Your task is to look at as many projects that have succeeded (and failed) to understand the subtle formulas for each component Note: These six steps come from the Crowdfunding Bible, which is available for free online at
  6. 6. 1. The product, service, or event
  7. 7. The product, service, or event • Does the casual observer find it interesting? • What makes it unique, exciting, or novel? • Is it compelling enough that people will pay for it? • How big is the audience for the offering? • Who is the intended audience?
  8. 8. Example: Luke Iseman – Project A The offer $ pledged $ project goal # backers
  9. 9. 85 backers, $1,164 raised, < $14/person Pledge level Reward # backers $ raised from pledge level $5 Ebook and full video of the conversion process, with each section available as I go. 34 $170 $15 Printed book signed by me upon project completion plus above. 40 $600 $50 An hour consultation by phone with me about your container plus above 4 $200 $150 Half-day visit to project site in Austin, Texas (y'all get yourselves here). 0 $0 $2,500 I will visit your site, within the continental U.S., at my own expense and spend a weekend helping you with your sustainability project 0 $0 Goal of $15,000 with average pledge of $14 requires 1,071 backers (i.e., >> 85 actual backers) 6 100 300 1,000 Backers needed at each level in isolation
  10. 10. Value proposition Customer segment Suggestion: Use a value proposition canvas to determine what customer pains or gains your value propositions can satisfy
  11. 11. What you can do 1. What can you provide to a customer group that will deliver value to them? 2. What features and benefits will deliver that value? 3. How many people are in your target market? Start by roughly quantifying how many people you and your teammates personally know (email, social media, offline, etc.) and who you can count on to contribute. The people you know will help pool the initial funds and give your campaign the momentum it needs. Think about how you will get in touch and interest them in your campaign.
  12. 12. 2. The pitch
  13. 13. Pitching • Pitching is a process intended to capture your audience’s interest by making them identify with an unmet need or “big pain,” then introducing your own brilliant solution • In less than one minute, you describe the pain, solution, how you’re different, why you? (or a status update), and a call to action • Generally, Your goal is to bait the hook, not close the deal – your product or service description and rewards should help close the deal • In crowdfunding the goal of your pitch is to make your campaign page “sticky” so that they will read your story and pledge-reward offerings
  14. 14. What you can do: A five-step approach 1. Open with a big pain or unmet need or WOW-inducing statement that instantly captures your audience’s attention 2. Follow your opener with your brilliant solution • Show the product or service 3. State how your offering is different from what audience is currently using – cherry-pick lesser features of your competition 4. Let the audience know “Why You” are the person they should back (or) • Let them know where you are in the project (status) (or) • Emphasize the cool factor or utility to current customers 5. Close with a call to action (pledge now, share this link with your friends, retweet, etc.)
  15. 15. 3. How to use video effectively The key to your campaign’s success
  16. 16. Why video? • Video offers a deep, rich communicative experience that can engage the viewer more effectively than text or pictures alone • A video says you care enough about what you’re doing to put yourself out there • A video is by far the best way to get a feel for the emotions, motivations, and character of a project – it’s a demonstration of effort and a good predictor of success. • As a result… “projects with videos succeed at a much higher rate than those without (50% vs. 30%)” (Kickstarter website).
  17. 17. People are funding you • Crowdfunding is (by definition) all about community • In most cases, people are funding you as much as they’re funding your project • Let them see you, hear your passion, and get excited with you • Make sure you come across as competent and trustworthy • Be energetic, have fun, and smile* when you’re on camera * But make sure you’re smile is genuine – see next two slides
  18. 18. People have seven universal emotions… Source: …only one makes us feel good! Blah!
  19. 19. 10 fakers, 10 not – Most people can tell when you’re faking a smile – be authentic! Take the test yourself:
  20. 20. Get your viewer’s attention! • Hook them with a compelling, emotion-invoking problem or a wow-inducing statement • You have 10 seconds or less to hook viewers and convince them that 1. your video is worth finishing, and 2. your project is worth investing in.
  21. 21. Cover these 6 topics 1. Tell viewers who you are. 2. Tell viewers the story behind your project. 3. Openly ask for people's support, explaining why you need it and what you'll do with their money. 4. Talk about how awesome your rewards are, using any images you can. 5. Explain that if you don't reach your goal, you'll get nothing, and everyone will be sad. “we don’t want that to happen!” 6. Call them to action! (“Please support my Kickstarter campaign now with a pledge”) Thank everyone!
  22. 22. What you will need • Camera: if smart phone, shoot in landscape • Tripod: to eliminate shakes and need for extra team member • Lights: room with lots of natural light or an outside location • Sound: smart phone < 1 ft from your mouth – you will get good quality sound just using the ‘voice memos’ app • Editing: Movie for Mac, Movie Maker for Windows, Camtasia • Graphics: Picmonkey • Location: natural light, power, sound • Script: with beginning, middle, and end – storytelling! • Storyboard, check lists and logging shots: Get organized, dammit!
  23. 23. Use a storyboard (even if you can’t draw) • It’s a visual interpretation of a story or script that depicts every scene, action and camera movement • The storyboard has to work technically and follow the same rules as a film; that means… • They must have shot, scene and panel numbers and be labeled with action notes and dialogue • The most important aspect of the storyboard is communication, not drawings Source: Karen J Lloyd
  24. 24. Storyboard examples Shot planner Storyboard with shot, scene, panel numbers, action notes and dialogue
  25. 25. Video shot log • a written record of the shots on a tape or disk • it really helps to do the shot log during the shoot — it will be easier and save you time later Source:
  26. 26. Example: Star Command [ Click to play video ] Star Command’s video showcased the game’s technology and quality of its graphics while using a clever narrative that reflected the attitude of the game
  27. 27. Other issues – “legal” media • Don’t infringe on copyrights and trademarks with music or artwork • Open source music resources: SoundCloud, Vimeo Music Store, Free Music Archive, and ccMixter.
  28. 28. What you can do 1. Develop a script for a compelling story 2. Create a storyboard for your video 3. Get the right filming and editing equipment 4. Project passion, trustworthiness, and competence 5. Edit and test on friends
  29. 29. 4. Rewards
  30. 30. Notes about rewards • Great ideas for CF campaigns can fail because of bad rewards structures • Consider: • How much $ you need • How many people will likely want to buy your offering(s) • How many people will actually view your campaign page • What you want to accomplish with each level of matched pledges and rewards
  31. 31. Example: "Your Amazing Movie Project" • $20 pledge = copy of DVD • $50 pledge = signed poster + DVD • $500 pledge = all of above plus credit as executive producer • $2,500 pledge = all of above plus invitation to exclusive launch party Pledge $ Valueofreward the best benefits often take the form of EXCLUSIVE offerings through merchandise, advance access to new releases, or more personal, privileged incentives.
  32. 32. Example: Luke Iseman – Project A The offer $ pledged $ project goal # backers How many people will be interested in watching this video, let alone be willing to support the campaign?
  33. 33. 85 backers, $15K goal, < $14/person Pledge level Reward # backers $ raised from pledge level $5 Ebook and full video of the conversion process, with each section available as I go. 34 $170 $15 Printed book signed by me upon project completion plus above. 40 $600 $50 An hour consultation by phone with me about your container plus above 4 $200 $150 Half-day visit to project site in Austin, Texas (y'all get yourselves here). 0 $0 $2,500 I will visit your site, within the continental U.S., at my own expense and spend a weekend helping you 0 $0 Goal of $15,000 with average pledge of $14 requires 1,071 backers (i.e., >> 85)
  34. 34. Luke Iseman (and team) – Project B The offer # backers $ pledged $ project goal
  35. 35. 136 backers, $5K goal, $47/person Pledge level Reward # backers $ raised from pledge level $5 A thank you note + copy of biochar study and inclusion of your name in study 12 $60 $10 Small Black Revolution burlap sack with printed logo + study 8 $80 $25 Small bag of Black Revolution (enough for 4-5 potted plants) + study 38 $950 $35 Same as $25 level but you get your order first 36 $875 $50 A medium bag of Black Revolution (enough for 8-12 potted plants) + study 13 $650 $100 Five small bags of Black Revolution (enough for 20-25 plants) + study 7 $700 $150 50-lb bag of Black Revolution. Enough for several raised beds. 7 $1,050 $1,000 Bulk order (500-lb) of Black Revolution delivered anywhere in the Continental US. 1 $1,000 Observe how pledges above the base “product level” of $25 add value while substantially raising higher-revenue pledges
  36. 36. Where’s Luke? His off-the-grid house is now a portable factory! “We can build distributed biochar production facilities inside 20' shipping containers. This means we can send production equipment directly where the demand exists.” By the way, Luke, I am a big fan of your ideas and projects. You are an exemplar for how people can become serial crowdfunders
  37. 37. The hidden costs of successful campaigns Average $32/pledge “Wow! We made nearly 100% over our goal!”
  38. 38. Pledge-reward structure Pledge levelLevel name Reward # Backers $ Raised / level $5Redshirt MP3 of game soundtrack 97 $485 $25 Midorian Ambassador Game promotion code, upcoming DLCs, exclusive room, stickers, phone backgrounds + above 954 $23,850 $100 Starship commander T-shirt, poster, map, + above 97 $9,700 $1,000Fleet Admiral In-game character likeness, credits, + above 2 $2,000 Totals 1,150 $36,035 Source:
  39. 39. 0 100 200 300 400 500 600 700 800 900 1000 $5 $25 $100 $1,000 97 954 97 2 Numberofbackers Pledge Level The visual: Pledge levels and number of backers for Star Command The soundtrack The game (aka actual product) The game + tchotchkes Immortality
  40. 40. “$17,000 more than we wanted!” [ subtitle: “where did the money go?”] $ 37,000 Raised in KS campaign $ (2,000) Pledges never materialized $ (3,000) Fees from Kickstarter and Amazon $ (10,000) Reward fulfillment costs $ (6,000) Game music composer's fee $ (2,000) Poster design artwork $ (3,000) Presence at PAX East trade show $ (4,000) Lawyers, accountants, professional services $ (1,000) iPad units needed to test game $ (1,800) Taxes (30%) $ 4,200 Disappeared on daily costs and incidentals
  41. 41. Solution humbly suggested: Use a business model canvas Make sure costs and revenues are “congruent” and that revenues > costs Visit to learn more
  42. 42. Which character is your crowdfunding campaign?
  43. 43. Example of successful use of multiple reward levels - Jane Jensen Link to Kicktraq The smoothness of this funding line suggests she did nothing to promote the campaign
  44. 44. - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 $16 $30 $50 $51 $99 $100 $101 $102 $115 $200 $215 $224 $239 $250 $265 $500 $515 $1,000 $1,500 $4,999 $5,000 $10,000 Number of Backers by Pledge Level # backers These four pledge levels cover $3 of financial real estate, but contributed a combined $55,186! Ask yourself: “What if she had only used a $99 or $100 pledge level? You’ll never know how high your backers are willing to go unless you ask
  45. 45. 5. Funding goal
  46. 46. How much money to you really need? • Exposure and interest • How many people will want your offer? • How many people will view your campaign? • Can you scale your offering in terms of more valuable rewards for higher pledges? • Other considerations: • Are you testing a concept to validate a new product or service? • Do you need cash to start up a new venture? • Are you trying to build a “following?”
  47. 47. 6. Promotions
  48. 48. Steve Blank on customer development Source:
  49. 49. Layer new features Upsell Engage Referrals Value attributes Awareness Purchase Evaluation Steve Blank’s customer development funnel looks a lot like these two panels in the business model canvas
  50. 50. Source: 3 important approaches to customer development
  51. 51. How you can promote • Use your early backers to promote your campaign (they want you to meet your funding goal or they get nothing) • Social media! • Customized landing pages targeted to different customer segments for a/b split testing ( • Use Google Analytics and Adwords Kickstarter tells the creator the exact order backers pledge in.
  52. 52. What you can do: Promotions 1. How many people do you know? (email, social media, offline, etc.) and who can you count on to contribute? The people you know will help pool the initial funds and give your campaign the momentum it needs. Think about how you will get in touch and interest them in your campaign. 2. Use the business model canvas to determine your channels and customer relationships 3. Use a personalized email –the average contributions amount through email is about 20% higher than for contributions through other sources. 4. Use social media platforms – about 22% of the funds raised by a campaign come from people clicking on social media posts – direct traffic to you campaign site with landing pages and posts to social media – make a special Facebook page for your project
  53. 53. What’s next?
  54. 54. The reality of crowdfunding "If you think crowdfunding is easy, guess again: It's definitely not. It's actually pretty scary because you have to be prepared to put yourself out there on display [for the public]. It's the Internet and you have to expect mixed feedback.” - Jane Jensen, Pinkerton Road: A Year of Adventure
  55. 55. (but also) The reality of crowdfunding “Most videos are just someone telling their story straight into the camera. You can spend days shooting and editing, or you can just knock it out with a couple friends on a Saturday. It doesn't have to be perfect, it just has to be you.” - How To Make an Awesome Video, Kickstarter Blog
  56. 56. In other words… It’s never been easier to make money doing something you love or to raise money for something that matters to you
  57. 57. Free resources • IndieGoGo crowdfunding tips • Crowdfunding Bible - • Kickstarter Blog - • FundMeFundYou –
  58. 58. Campaigns cited in this presentation • Black revolution • Jane Jensen’s “a year of adventure” • Luke Iseman shipping-container-to-off-grid-house • Star Command
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