Keep reading to learn more about what it takes to run a successful Kickstarter campaign. For more resources on starting a small business, check out our “side hustle” resources.
What is crowdfunding?
Rather than find a large grant or loan to cover the start-up and manufacturing costs for the SpinWheel, we relied on something called crowdfunding. By crowdfunding the SpinWheel, we found hundreds of people who were excited by our idea and were willing to invest in us to make it become a reality. Those who support a crowdfunding campaign are typically called “backers” and are kept informed of the manufacturing and other campaign updates. Crowdfunding allows you to determine if there is sufficient interest to justify the costs of launching a new idea. This style of funding is particularly useful for something like the SpinWheel which has a large initial cost in manufacturing.
Kickstarter
To crowdfund the SpinWheel, we used a platform called Kickstarter. This is one of the most popular crowdfunding sites and we highly recommend it from our experience. It is used to launch clothing, accessories, novels, and even educational kits like the SpinWheel! Kickstarter makes it easier for creators to successfully launch and provides loads of useful resources. If your Kickstarter campaign is successful, then they take a small percentage of the money you raised as overhead. However, if you don’t successfully reach your goal, then your backers aren’t charged and you don’t have to pay Kickstarter anything.
Before launching a product on Kickstarter, it is important to have beta tested and have a working protoype. This will help with creating your promotional video. Most successful Kickstarters have a video where you can make the pitch for your product. In crafting this and the other materials that are on your Kickstarter page, it is critical to understand who is going to back your device. This will take some time to figure out and might change throughout the process. For instance, we thought we would mostly sell the SpinWheel to parents, but we were much more successful with those who wanted to further our mission of inspiring the next generation of scientists.
Having a working protoype will also be essential for accurately setting your target funding goal. Take time to determine your expenses (providing wiggle room for unanticipated costs) and profit margin. If you set your funding goal too low, you won’t have enough money to run the campaign; however, it is important that it is realistic. We also found that there are also some people who will only back campaigns that have already reached their goal.
Each Kickstarter campaign has multiple levels that backers can choose between. These typically include levels such as supporting the campaign with a donation, getting the standard product (in our case the SpinWheel), and then other more expensive levels. It is also common to give a discount if people buy multiple of your product. For instance, we had discounts for earrings (two SpinWheels) and classroom kits (5-9 SpinWheels and 10+ SpinWheels). We also included some more expensive options, such as having our team come to your school or group to lead an outreach event with the SpinWheel. Most of our backers bought one or two SpinWheels, though some teachers and others leading STEM outreach events bought our classroom kits.
Most successful Kickstarter campaigns last a month or less. However, you have the flexibility to set your own timeline. We found that we raised the most money on the first day and last week of our campaign. Be sure to include on your page your schedule for shipping your product. While this may change, be realistic and generous on your timings. Something will likely take longer than you anticipate. Backers are understanding of this, as long as you are transparent with them when delays occur.
Spreading the Word
Because a typical crowdfunding campaign is short, the important advertising legwork needs to happen before the campaign even starts. The few months beforehand are key to reaching out to potential backers to find a set of backers who will support your campaign on your first day. We raised over a quarter of our funding that first day and that gave us an important boost through the middle of the campaign when interest slowed down.
How do you go about generating interest in your product? Perhaps even more than for other business models, crowdfunding campaigns have to sell the story of their product. Backers have to be sufficienlty excited about the product to wait months, if not longer, to receive it. There are lots of websites that will talk more about publicity and getting the word out, but the most important thing that we learned is that you will need to reach out to many people to get any responses. Most emails won’t be returned and many sources of publicity will only bring in one or two backers. Be sure to make good use of your personal networks and the networks of your friends and family.
Learning more
If you are seriously considering starting your own small business or running a Kickstarter, then check out this resources page based on a presentation on starting your own “side hustle” at the Society of Women Engineers WE20 Conference.
