techhub meetup: how to crowdfund your tech product
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Post on 17-May-2015
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DESCRIPTIONEager to find out exactly what it takes to build and deploy a successful crowdfunding campaign? We brought together 3 experienced speakers in the matter and we summed up an evening's discussions in this slide deck. We hope you find it useful and pass it along to those who might need it.
- 1. Key talking points 1. When is the right time in your products development stage to do a crowd-funding campaign? 2. What are the main crow-funding platforms that tech entrepreneurs use and whats their specific profile? 3. What is the biggest challenge youve had in raising money in Romania for a tech product? 4. How should entrepreneurs prepare for setting up a crowd-funding campaign? 5. How do you gather an initial supporters base? 6. How do you calculate your goal? What are some hidden costs that may appear and how do you factor them in? 7. How do you define push points in the campaign? 8. How do you test your rewards and other features of the campaign? 9. In hindsight, what are the top 3 things you wish you knew at the start of the crowdfunding campaign?
2. TechHub Meetup Insights The right time for a crowdfunding campaign Dragos Stanculescu - The first time you can actually market your idea to the right user. You need to have the idea in a state that you can easily explain to your audience in 2 sentences. Theodor Milian - CrestemIdei.ro approached me about the technical projects I was developing with my team, asking if wed be interested to crowdfund one of them. The project was already under development, but we had to create the presentation for the campaign and explain why our ROV (Remotely operated underwater vehicle) was different from others on the market. Catalin Vasile - In crowd-funding money is the last thing you take. You get the validation of the idea, the prototype or the MVP (minimum viable product), which are all stages that you can pitch your idea for a campaign. You can also build a community around your idea and all these aspects are very valuable for your project. 3. TechHub Meetup Insights Crowdfunding platforms you can use Dragos Stanculescu We started with the best known platforms: Kickstarter, which you cantuse from Romania, then Indiegogo, which we chose and we didnt go any further. - Do more research (we didnt have any business developer on the team) - Look into legal aspects. Get legal advice on international law - Look into financial matters, such as transferring your money from the platform to your account. If you dont want to set up your own website and want to jump directly into crowdfunding, its best to start with a Romanian platform and maybe move on from there. If you gather a community and only go to a crowdfunding platform when you actually need the money, then do your legal research first, because international law is tricky. Catalin Vasile - Romania is a young market, but a Romanian crowdfunding campaign can be a first step before a bigger campaign on international platforms, such as Indiegogo, because there are a lot of things that cannot be foreseen in the beginning, when preparing for the campaign. I think the campaigns right now could be better, which why I believe that testing it on the Romanian market can be a learning experience. 4. TechHub Meetup Insights The biggest challenge in raising money Dragos Stanculescu We were lucky enough to become part of a pilot project in Indiegogo which assigned every campaign a person from the team to guide us and explain the mechanics and provide us with information on best practices and that was a great help for us. I dont know if it has become a common practice. Theodor Milian We made a list of people or companies we wanted to address with this product. We then went on to make a video specifically for those people (divers, people in research institutes, archaeologists, oil platforms, etc.). We made a video showing the ROV exploring a point of interest into the water. We also reached out to our friends and family, whom we got 20% of the entire sum from. Biggest challenges: to explain the product and its applications and to assure backers that there are no additional fees (theres still suspicion about payment methods in Romania). Its important to have someone from the platform to help you and guide you through the process. Catalin Vasile - We want to have an employee who can help every project that enlists for a campaign, because setting up the campaign is only the beginning. 5. TechHub Meetup Insights Setting up a crowdfunding campaign Dragos Stanculescu - make sure that you have all your documents. - If working with Paypal, make sure you have your account setup 3 months before. - Be prepared to spend every minute of your moments spent awake talking to your funders and taking care of the campaign - Find your tribe, the people who resonate with your idea and they will do awesome marketing for you. Take care of them during the campaign and beyond. Catalin Vasile - We try to be close to the teams from the beginning. Setting up a campaign is an entire process. Its not just writing the campaign, making the movie and hitting refresh on the page until the campaign end. - Engage your friends and family to promote you, to support you. - Learn how to market yourself. Sometimes, great projects from a technical point of view have a very poor commercial factor. The teams sometimes dont think about the use case for the product, how it will scale, or how it will go international. 6. TechHub Meetup Insights Gathering initial support Dragos Stanculescu - We used social media to garner support, we went to the communities we thought will be interested in our product and we never pushed too strong, we never spammed anyone. - We used the accounts we already had. - We made sure our call to action also stated that support is as important as contributing financially, and it worked. The people started sharing. - We also took a shot at the moon: we emailed the top 10 most popular video bloggers and we got support from Ray William Johnson. It was not all know how, but we also got lucky. Theodor Milian - My team and I had the advantage of a rich background in tech projects. Any search on Google would reveal our numerous successful projects and the competition we either participated in or organized. - You should donate some of your own money to get the campaign started and for people to see that you believe in your own project as much as to risk your own finances to do the best. 7. TechHub Meetup Insights Calculating your goal Dragos Stanculescu - Take the fees into account: fees charged by the platform, banking fees, Paypal fees, fees between the platform and Paypal and between Paypal and yourself, there are taxes and a lot of things that will eat away some of the campaign money. - A risky play is only to ask for 30% of what you think you need. A conservative play would be to ask for 60% more, and a safe play would be to ask for 100% more than what you think you need. Its less risky if you deal with physical products, but you still have to do a 30-50% extra. Theodor Milian - For us, the campaign was help to develop the project faster, a year faster actually. - As a result of the crowdfunding campaign, we got a lot of publicity and we attracted the attention of other investors, companies (as ISU for example) who needed the product that further funded us for future versions of the ROV. Catalin Vasile - Be transparent about what youre going to do with the money, because people are always worried about that. - We do consultancy for the projects on the platform, to make sure they cover all their costs and leave nothing out of their planning. 8. TechHub Meetup Insights Defining push-points in the campaign Dragos Stanculescu - Research many campaigns before. We noticed that the interest in the campaign is always a U shape: the beginning and the end see a lot of interest. If you fail to gain traction in the beginning, the people who stumble upon your campaign in the middle and see it has no traction will not trust you and wont get involved even if otherwise they would. If you have a marketing budget, make sure you spend it at the beginning of the campaign. - At the end of the campaign, you typically get the money from the people who wanted to back you up in the beginning, but didnt have the money, and got a pay-check in the meantime. - Close to the end, send out a press release and an email blast to make sure that you get all the people whod be interested. Remind people that time is running out (give them a brief status update and encourage them to get involved). Theodor Milian - Going to specific targets in our audience worked for us, people who would actually use our product. - We went for the 3 months, the maximum allowed length, because we thought wed need more time to raise awareness. We werent pressed with the time, and if youre the same, you should to for the maximum amount of time. - We used Facebook intensely, we kept our website updated, wrote a lot of emails and did a more personal approach. The audience in Romania is very different, so you have to see what works best with them. 9. TechHub Meetup Insights Creating and testing rewards Dragos Stanculescu - We had 2 types of contributors: people who spend time on crowfunding platforms and want to get involved to give something back to society, and people who are looking for deals. - Bring the deal seekers on your projects page. Sell your idea to them and make them feel like theyre getting something worthwhile in return. Since theyre backers in the beginning, theyre shouldering all the risk, so you have to give them a better deal (twice or thrice a better deal). Offer them deals and itll be more likely that theyll make accounts to back you up. Dont rely solely on people who already have accounts and are looking for campaigns to support. Theodor Milian - Make sure you dont spend too much money on the rewards. - Create a special experience for your backers, that nobody else gets (our biggest reward was a diving course in a secret location where hell be able to dive with the ROV and watch it in action). Catalin Vasile - The beauty of crowdfunding is that you can pre-sell your idea before you have the product, and you can develop your product with the bac