How to finance your start-up with crowdfunding?

I’d like to echo the words of Annika Lidne, whom has given us a fantastic lecture about how to finance a start-up last week. It was really amazing because she gave us an overview of all the means you can use, with pros and cons, how much money you can get, why is it different in Europe and in the US especially for crowdfunding, etc. This last point sounded very interesting to me as I’ve already helped finance a cinema project on the European crowdfunding website Ulule.com last year.

But how to build a successful crowdfunding campaign?

To answer that question, I’m going to analyse the Purple® Pillow campaign, which is currently one of the most successful on Kickstarter. It has raised more than 800k$ in 11 days, and is certainly not going to stop now, as they still have 19 days left to go. The Purple Pillow is meant to be an innovative pillow that fits perfectly your neck and head to give you as much comfort as possible. The product was created by two engineers -Tony and Terry Pearce- after they’ve patented a new material called “Hyper-elastic polymer”, which makes their product unique and ingenious. So it seems quite logical that such a product can definitely succeed to raise money via Kickstarter, right? Well, it’s a bit more complicated than just that.

The first thing you should know is that this campaign is not Tony’s first try. He’s already successfully financed his previous product -an innovative mattress- thanks to Kickstarter. He is also quite active on this website  because he’s backed 5 other campaigns that were not his. These are probably some reasons why his current campaign seems to work so well. Being active on Kickstarter gives him visibility, and also makes people more likely to give him their money because they feel that he’s not only asking for money, he is also giving his own money to support the others, which makes him appear as a sympathetic and passionate entrepreneur. Also, thanks to his previous campaign, he’s built a sort of fan base, which is always good to have to start a new project, because they might be the first people interested and likely to give you money, especially if they were satisfied with your previous product. Another way to get people to see your project and be interested in it is to be presented on various social media -Twitter, Facebook, Reddit, Pinterest to name just a few and maybe the most important ones- and that’s exactly what they’re doing right now by giving the opportunity to their backers to share the campaign to others on these social media.

Now that people are looking at you, you have to prove that you are reliable, that you can be trusted, so they will be more likely to help you finance your stuff. The way they do that is that they show they are really involved in their project. They communicate a lot, and especially they notice when a certain goal has been reached, and they don’t forget to thank all the people who support them, always with humour. They also have created a website, so people can learn more about the founders and their products. This is very important to provide enough information to people, so they can learn who you are, why you do what you’re doing. People get attached to people and especially for this kind of campaign, I think it’s really important to be liked be people because it is an quite intimate way to get financing. That’s why it’s better when people are emotionally involved with the product and with the founders.

Finally, this campaign has another huge asset -and it is my personal favourite- that is their presentation video. I highly recommend that you have a look at it because it is flawless quality-wise in my opinion, and they’ve put a lot of humour in it, that makes it is fresh and funny to watch. I feel like they really know how to advertise their product, and they make their campaign more human by being funny and showing that they’re really involved in what they do (you can actually see the two co-founders in the video.)

So what can you learn from crowdfunding websites ?

Studying crowdfunding campaigns may allow you to get amazing marketing ideas to sell your project. You can also learn a lot of stuff, how people interact on this kind of websites, how to get them to be interested in your idea, what kind of compensations you should offer to people who agree to give you their money, etc. But of course in the end, learning by doing is probably the best you can do to finally build a successful crowdfunding campaign.

And last but not least, looking at trending crowdfunding projects is also a great way to catch a glimpse of what may come in our lives in a close future, and it can be really exciting in my opinion. I remember when I first saw the Oculus Rift campaign on Kickstarter, which is a Virtual Reality headset. I was amazed by all the possibilities of such a device. It was only about two years ago and now these devices are really starting to become common products, especially in video games. I can’t wait to see if the Purple Pillow is able to make a breakthrough in the pillow market after its successful campaign, it could be really funny.

Here is an article which has inspired me to write this blog post. It gives you 10 tips about how to build successful crowdfunding campaigns, and I think it can be good to keep that in mind if you ever want to finance your own project this way.

Here is the link to the founders website, check it out.

Thank you for reading my post. Feel free to comment if you’ve already had an experience with crowdfunding, I’d really like to hear about it. See you next time!