crowdfunding workshop 48 west-feb-16-2013-propel arizona
DESCRIPTION
Hands on Crowdfunding Workshop by Propel ArizonaTRANSCRIPT
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Crowdfunding
WYNTK * (what you need to know)
Hands-on For Entrepreneurs
48-West , 16 February 2013 CJ Cornell – Propel Arizona
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10+ companies$250M Funding 4 Exits (great !)$3B Revenues 4 Failures (awful !)
Lots of lessons. Chaos, Pain and Joy.
‘Serial/Parallel Entrepreneur”
EIR, Venture PartnerAngel Investor
5 Companies 9 Boards3,000 Tylenol Caplets. Ego and Brain Atrophy.
Investor/Venture Capitalist
Professor of Digital Media & EntrepreneurshipArizona State University, SJSU, Stanford (Lecturer)New York Institute of Technology Knight Center for Digital Media EntrepreneurshipResearch in digital media, behavior, entrepreneurship
University Professor
Advisor/Mentor, Author etc.
ASU – Skysong, Venture Catalyst, RSS etcArizona Commerce Authority / Venture readyArizona Innovation ChallengeBook: Age of Metapreneurship. Blog/Articles
CJ Cornell
@cjcornell
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CrowdfundingWorkshop
Agenda1. Crowdfunding overview2. Crafting the Idea and Campaign3. Preparing the Visuals4. Perks and rewards5. Running the campaign6. Success factors
www.propelarizona.com
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What is Crowdfunding?
… and why should you care?
1.
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The Funding Gap
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Concept to Product to Growth
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Concept to Product to Growth
$ $ $$
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Concept to Product to Growth
$Entrepreneur IPO
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Concept to Product to Growth
$Entrepreneur IPO
$Entrepreneur IPO
$
Venture Capital
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The Kauffman Index of Entrepreneurial Activity is a leading indicator of new
business creation in the United States.
In 2012 - The state with the HIGHEST level of Entrepreneurial Growth was …
Arizona.
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# 1 in Entrepreneurial Growth
# 46th in Venture Capital $
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Concept to Product to Growth
$Entrepreneur IPO
$Entrepreneur IPO
$
Venture Capital
$Entrepreneur IPO
$
Venture Capital
$
Angels,accel & incub
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Source: http://theyec.org/making-sense-of-the-jobs-act-and-crowdfunding-infographic/
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Concept to Product to Growth
$Entrepreneur IPO
$
Venture Capital
$
Angels,accel & incub
Crowdfunding
$$
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Concept to Product to Growth
$Entrepreneur IPO
$
Venture Capital
$
Angels,accel & incub
Crowdfunding
$$
Crowdfunding$
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Concept to Product to Growth
$Entrepreneur IPO
$
Venture Capital
$
Angels,accel & incub
Crowdfunding
$$
Crowdfunding$
Crowdfunding$
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Concept to Product to Growth
$Entrepreneur IPO
$
Venture Capital
$
Angels,accel & incub
Crowdfunding
$$
Crowdfunding$
Crowdfunding$
Crowdfunding$
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Crowdfunding
Soliciting & Collecting relatively small amounts of money (“funding”) from a large number of people (“crowd”)
WYNTK(what you need to know)
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http://blog.intuit.com/trends/crowd-power-what-is-crowdfunding-infographic
“Crowdfunding is a term used to describe individuals
coming together to support – and directly fund
projects by other individual and organizations.
“
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• Source – http;//crowdfunder.com
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• Source – http;//crowdfunder.com
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Real Crowdfunding – that works.
Today
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“THE KICKSTARTER MODEL”Rewards-based, Donation Crowdfunding:
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ALL OR NOTHING
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Perks &Rewards
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Updates (and Blogging)
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Updates (and Blogging)
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Comments & Engagement
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Kickstarter (2012)
2.2 million people pledged a total of
$319,786,629
(up 221% from 2011)
Backers pledged $606.76 per minute
People in 177 countries backed a project in 2012
(That's 90% of the countries in the world)
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Source: http://KickstartersHQ.com
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WHY …Do people Crowdfund?
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Lessons from Ethan Mollick’s “The Dynamics of Crowdfunding: Determinants of Success and Failure”
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3 Why’s: 1. They connect to the greater purpose of the campaign
2. They connect to a physical aspect of the campaign like the rewards
3. They connect to the creative display of the campaign’s presentation
three main reasons why people unconnected to a
project or business would support it:
What Is Crowdfunding And How Does It Benefit The Economy - Forbeshttp://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefit-the-economy
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The Real(Crowdfunding)
Why’s
• Passion– For the technology– For the industry– For the cause– For the product
• Affinity– For the Entrepreneur– For the region, industry etc
• Connection
• Every reason BUT R.O.I. …
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emotional ROI.Not financial ROI
WYNTK(what you need to know)
Crowdfunding is about …
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(when crowdfunding …)
“its not what you do, but why you do it,”
WYNTK(what you need to know)
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http://www.kickstarter.com/projects/1104350651/tiktok-lunatik-multi-touch-watch-kits
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http://trendwatching.com/trends/infographics/presumers/
“Consumers who want products before they are developed”
Pre-ordersEarly adopters
Supporters
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UH OH …The Kickstart Model..
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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
WYNTK(what you need to know)
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What does success look like?
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• 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.
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• 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.
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What do successful campaigns have in common?
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http://www.kickstarter.com/projects/hop/elevation-dock-the-best-dock-for-iphone
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Projectio
http://www.kickstarter.com/projects/1209578799/projecteo-the-tiny-instagram-projector
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http://www.kickstarter.com/projects/1719196889/iceblink-engine?ref=home_location
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http://www.kickstarter.com/projects/812916345/magnet-comic-a-custom-magnetic-and-dry-erase-comic?ref=home_popular
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http://www.kickstarter.com/projects/mikebond/ti2-sentinel-titanium-cache?ref=home_popular
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http://www.kickstarter.com/projects/poots/kingdom-death-monster?ref=home_popular
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http://www.kickstarter.com/projects/smartthings/smartthings-make-your-world-smarter?ref=category
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http://www.kickstarter.com/projects/thejumpshot/jumpshot-a-new-weapon-to-battle-pc-frustration?ref=category
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http://www.kickstarter.com/projects/374405221/mary-elizabeths-sock-the-first-book-collection?ref=home_location
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http://trendwatching.com/trends/infographics/presumers/
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Crafting a
Successful
Crowdfunding Campaign
2.
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Some initial rules ….
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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
WYNTK(what you need to know)
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Components
of a
Crowdfunding Campaign
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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
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Crafting the “Pitch”
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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?
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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?
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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!
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Exercise –
Craft the Pitch
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Crafting your Pitch 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
Tell a storyMake it about themThe History of the idea is intriguingWhat is the Impact? Why is this important?Try a FAQCall to action – get them involved!
The 3 Who’s:Who are the donors? (affinity & passion)Who is benefits? (the market)Who are you?
The 3 Why’sWhy would your donors care?Why does the market care?Why are you the right team to do it?
What is your project & goal?Understandable & SimpleCompelling & IntriguingRepeatable & Memorable
How and WhenHow will you achieve your goal? Realistic?When, after funding? When will I get my perks?
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Pitch Notes - 1• Who (donors, market)• “Why” – the story
• Impact (on the market)• Impact (on the donors)
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Pitch Notes - 2• Story, and History …• FAQ
• Perk Ideas (what’s important to donors)• Calls to Action
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Visuals 3.
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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
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7 habits of highly successful crowdfunding campaigns
1. 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!
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Perks & Rewards 4.
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Directed by
Patrick Million
Executive Producer
CJ Cornell
a Patrick Million FILM
American Grandmaster
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Rewards Crowdfunding
• Incentives & perks• Pre-Orders• Pre-Sumers
• Market Validation
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Rewards don’t have to worth $$
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• $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.
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• $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
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some
Rules for Rewards
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1. Make perks unique & exclusive
Avoid T-shirts, Mugs & Hugs
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2. Target them
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3. Give them a connection
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“The Cocktail Party Effect”
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“The Restaurant Effect”
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“The Carey School Effect”
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The less tangible the perk,
the more public (visible) & EXCLUSIVE it needs to be.
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The Campaign 5.
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How much $$ ?
How long?
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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?
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HOW to Crowdfund?
PUSH - Running the campaign• Social Media• Comments & Updates• Networking• Personal Pitches
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Your mission: To get them talking about your project
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Now that you’ve launched …
Continue the story
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Social Engagement
– Transparency & Trust– Social Proof & Viral FX
– Engagement & “The Fundamentals”– Twitter– Facebook– Blogging
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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/
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1. Create:- A Facebook Account- A Twitter Account
(for your campaign)
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2. Tweet & Post –Frequently–Uniquely–Personally
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3. Post Updates & Blog•About your progress•About the subject•About the industry•About the People
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4. Go 1-1•Reply to comments•Retweet/Repost
Your fans and donors are your most powerful advocates!
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5. Target, Measure & Adjust•Different Messages for different groups
•Google, Hootsuite, others•Learn and Adjust focus
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Metrics
http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and-steady
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Metrics
http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and-steady
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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
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Success Factors 6.
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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
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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
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http://www.indiegogo.com/blog/2012/07/indiegogo-insight-winning-the-middle-game.html
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successful campaigns raise, on average, 49% percent of their goals during the first and
last 10% of the campaign length.
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Successful campaigns took an average 11 days preparing for their launch.
http://blog.indiegogo.com/2013/01/12-insights-for-2012.html
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Campaigns ran an average 49 days in 2012, as opposed to 60 in 2011.
Successful campaigns fundraised for 39 days.
http://blog.indiegogo.com/2013/01/12-insights-for-2012.html
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The Average Successful Campaign took 11 days to prepare.
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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/Donors
http://kickstartershq.com/articles/5-project-crushing-kickstarter-mistakes-how-to-avoid-themhttp://www.crowdsourcing.org/document/3-big-crowdfunding-myths-via-funderhut/23804
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www.propelarizona.com
WYNTK(what you need to know)
Successful Crowdfunding Campaigns Focus on
The new 4 P’s …
PEOPLEthe
1. PITCH
the
2. PROMOthe
4. PERKSthe
3.
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focus on “them” – not your company
WHO are they?What motivates them?Interests, Values … PEOPLE
the
1.The new 4 P’s of Crowdfunding ..
www.propelarizona.com
PITCHthe
2.You are pitching to “them”
TELL A STORY !!
WHY is more important than $$
VIDEO(s) & VISUAL(s)
Tell the story in small ‘chapters’
VIDEO(s) & VISUAL(s)
And even smaller “sound bites”
Give them a Story they can tell to others.
PERKSthe
3.$$ Value is a negative driver !
UNIQUE
It’s about THEM
EXCLUSIVE
And what is important to “Them”
FIRST
Make sure it is …
BUZZWORTHY
PROMOthe
4.It’s a daily/hourly effort …
SOCIAL MEDIA
It’s a conversation …
UPDATES, BLOGS, NEWS
Provide Value, and Talking PointsRE-POST, TWEETable
It’s about … for their network
VALIDATION & EVIDENCE
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The most important secret is …
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Showing Momentum
(the perception of momentum)
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The most obvious secret is …
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Credibility
= trust, competence & follow-through
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www.propelarizona.com
Crowdfunding
Entrepreneurship & Innovation
Arizona Economic Growth
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Practical Crowdfunding
Workshopwww.propelarizona.com @PropelArizona
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