Selling $400K in 45 Days Crowdfunding: Tips From My Personal Journey
Selling $400K in 45 Days Crowdfunding: Tips From My Personal Journey
Crowdfunding is an unbelievable way to launch a new business. If done correctly, and with a lot of hard work, a successful campaign can lower the risks of starting a business, product or movement and fast track your awareness, fanbase, customers and investors.
That being said, what most people don’t tell you before you begin is that even if you’re successfully funded, there are still many risks that could present themselves during and after the campaign.
In this article, I’ll share a few crowdfunding tips that my team I used to raise $400k in 45 days on Indiegogo with just $30k in ad spend and share some of the pitfalls we ran into afterwards so hopefully you, or someone you know, can crowdfund their dream project and see it grow into a fulfilling business.
PREPARING FOR LAUNCH
For nearly 7 years leading up to the launch, I’d been helping e-commerce businesses scale their digital marketing campaigns, and while that came with ups and downs, I enjoyed it and found success doing so.
With household apparel names like Arc'teryx and Salomon as well as experience with multimillion-dollar Kickstarter projects like North Aware, I was full of confidence starting my own outdoor apparel brand.
What I didn’t know and completely overlooked was how difficult supply chain, customer service and logistics can be. More on that to come later on.
Find a problem, learn as much as you can about it, then try to solve it.
The problem we wanted to solve was how to keep people’s hands warm during the winter. We love the outdoors and believe that nature keeps us healthy, both physically and mentally. Most people want to spend more time outside, but for many, not being able to keep their hands warm makes it very difficult. A staggering statistic that we learned was that most Americans spend only 8% of their time outdoors and we wanted to change that.
The research, ideation, and branding exercises were super fun. For the campaign, I partnered with one of my lifelong friends, Nick Findler, and we hit the streets doing first-party user research. It was the summer and our goal was to launch our heated gloves by winter. On the hottest day of the year so far in Vancouver, about 30-degree Celsius, so we decided to hit the beach with our iPad Survey Monkey forms with a goal to speak to 100 different people about what they’d look for in a pair of heated gloves and if they’d find them useful in their day-to-day lives. What we found was really helpful.
Here are the top use cases that we uncovered (e.g. features and benefits):
1. Using them for sports like outdoor soccer. This meant they had to be warm when sitting, but breathable when running. Our original vision was to make them waterproof for skiing, but it seemed that the market was too saturated with competitors. We nixed this, as it’s difficult to have waterproof apparel that’s truly breathable.
2. Wearing them in the city for cold morning commutes. From what we gathered and understood about Vancouver, people would only wear something if they actually looked good and minimal, not the big, bulky and covered in reflective gloves you see most people walking around with today.
3. Wearing them skiing. As mentioned above, this was our original vision, but we pivoted after researching the competitors more and came up with the idea that we could fulfill both the urban market and the ski market by making them thin enough to be liners as well as warm enough to stand up on their own.
With that knowledge, the product development and branded exercises started.
Test your messaging, target audiences and unique value propositions:
This part was also very enjoyable and something that I’m continually passionate about. Whether it’s building my own businesses or consulting others, I’m usually surprised at what insights can come from proper message testing. Usually, it’s a very humbling exercise for everyone involved because we realize how wrong our initial assumptions can be especially when it comes to understanding your customer personas.
From June to November, about 6 months working together every night (or “nightcrawlers” we’d call our late-night sessions), we managed to sift through 6 different suppliers while testing and iterating on dozens of prototypes. While this was intensive since we both ran other businesses on the side, this period was an absolute blast.
With my background in performance marketing and mentorship from crowdfunding legend, Tony Yu, we knew how important it was to run lead generation ads, landing page tests and email automations to try and gather as much data as possible, build a list of interested early-bird backers and warm up our ad accounts.
Because our prototypes were taking longer than expected, we actually began our lead generation ads with stock and computer-generated 3D rendered content. Mainly, what we wanted to test was what messaging created the highest chances of a user subscribing to our early-bird list and then opening our email automations. We approached this testing with 3 main messaging themes: emotion/benefit, logic/features or superiority/comparisons.
After spending roughly $2,000 on ads and generating nearly 1,400 leads, we had a staggering amount of data showing that the ad copy we wrote which spoke to the users emotions and articulated the potential benefit to them drove by far the best results (e.g. the highest lead conversion rates and best open rates on our emails). If you’re wanting to learn more about writing ad copy that resonates with emotion, I highly suggest reading This is Marketing by Seth Godin.
Build an early community, nurture it and prepare them for launch:
While the process of gathering leads, testing audiences/messaging and optimizing your campaigns is helpful in preparing for your actual revenue-generating post launch ad campaigns, it’s important to also nurture and learn from the leads you’ve gathered.
There are many fantastic email welcome series templates out there on how to prepare your email list for your crowdfunding campaign launch (here’s a handy free PDF template from FrontLineCopy.com you can personalize), so I won’t get into too much detail about that here.
What I do want to elaborate on though is how important it is to ensure your lead tracking form is glitch-free, that your first email sends out quickly (within 1-2 minutes), and that you pose questions to your leads in your emails and listen for responses.
While getting your email list to respond helps improve the likelihood of landing in their primary inbox next time, it’s also invaluable for learning more about your audience and what they want.
For example, during our Candle Apparel campaign, a handful of people were asking how long the batteries would last and at what temperatures the battery life would decrease. With some more back-and-forth, we were able to learn more about what cities they lived in, how cold it was there in the winter and how long of battery life they would want. We were then able to go back to our manufacturers and increase our battery sizes well before the launch and also know in advance to communicate the battery life and temperature data higher up on our landing page.
As mentioned above, we built a list of roughly 1,400 leads prior to launching the campaign. What this doesn’t include is the work that went into preparing our personal networks and community prior to launch as well. By the time we launched, because we’d be polling our network (e.g. sending our SurveyMonkey surveys on our Instagram stories) and polling anyone we could find in person (e.g. walking up to random people at the beach with iPads), most of our network were interested in what we were doing and felt in some part, invested in the project.
This is important because even if people in your network don’t back your campaign, the number of social media shares and total traffic the campaign page receives still counts towards your project’s leaderboard ranking.
The importance of the first 5 days after launch:
If you’ve ever looked into launching a crowdfunding campaign before, you likely know how important this is. Really, it can’t be stressed enough. Like SEO rankings, there are many factors that go into the leaderboard (e.g. popular projects) ranking on both Kickstarter and Indiegogo: project preview card click-through rate, time spent on your project page, visitor to back conversion rate, social media shares, overall traffic and comment engagements are a few of the more heavily-weighted ones. Just like the testing that goes into the lead generation campaigns, it’s extremely important to A/B test sections of your campaign page and preview card to try and optimize your metrics.
In the chart below, courtesy of ProductHype’s quick and very helpful Kickstarter tips article, you’ll see a typical crowdfunding campaign’s funding breakdown. Note how massive the first day of sales is, then they drove their next 2 largest days post launch and 2 significant days afterwards. This is important because the first 5 days can make or break your campaign.
While many experienced backers may wait for the campaign to reach its funding goal before hopping in, many people see the first day as an opportunity to snag the cheapest price. Also, the first few days have novelty working in your favor and the platform (e.g. Kickstarter or Indiegogo) show more new projects on their popular section than projects which are mid-way into their campaigns.
Pay attention to what channels are working and double down on them:
One of the most common questions I get, both from people interested in crowdfunding and e-commerce businesses looking to scale their store revenue, is what channels to use. This goes for deciding between Kickstarter vs. Indiegogo and between marketing platforms like Google Ad vs. Facebook or TikTok Ads. I’ll elaborate on what we used and why.
When deciding between Kickstarter or Indiegogo, we chose Indiegogo. Mainly, I wanted to pick Indiegogo because I felt like I had more control over our destiny. What I mean by that is Indiegogo lets you add ad platform conversion tracking directly to their project landing pages while Kickstarter does not which as a performance marketer I greatly appreciate.
While there are methods to pixel incoming visitors to your Kickstarter landing page, such as explained in this PixelMe article, and with creative post-purchase backer surveys you can upload purchaser emails to leverage Facebook Ad’s “offline events” attribution, there’s still no match for the real-time reporting possible with having the actual conversion tracking directly on the landing page. Because I was going into our campaign without any relationships with Kickstarter staff, popular Kickstarter newsletters or media channels, all I had was a modest $30k ad budget and previous expertise running ad campaigns. In the end, this worked out for us and we actually had to turn off our campaign sales due to supply issues.
As for choosing between ad platforms, tactics or ad types, once you begin gathering data you can compare multiple attribution types in Google Analytics and do your own last-click attribution comparisons in the ad platforms to see what’s working for your campaign and double down on the areas that are generating results. I set up a Google Ads account and built out generic and branded search ads as well as display and YouTube ads for our campaign because that’s relatively painless for me since it’s what I do for a living and I was curious to see if they’d work, but if you’re looking to save time and energy, in my experience running Meta (Facebook/Instagram) ads works much better for these types of ad campaigns (for multiple reasons which I won’t get into here, but feel free to message me if you’d like to chat about it) and you can be confident focussing there. Out of our $30k ad budget, we spent over 92% of it with Meta.
PREPARING FOR FULFILLMENT
Your bulk order of products may not look exactly like your prototypes:
As soon as we raised enough money, Nick and I hopped on a plane and flew to China mid-campaign to meet our chosen suppliers and try our best to ensure that the production round of products would be made on time and be up to the quality of the prototypes. Despite all of our efforts, the outcome didn’t go as planned...
After spending a full week in Shenzhen, China with our suppliers working on the prototypes and touring multiple factories, we were happy with our prototypes and the assurances they provided us on the full production runs and decided to move on to Hong Kong to meet with logistics partners.
The prototypes, production and fulfillment plans all seemed quite solid and reasonable to our untrained eyes. Unfortunately, that was not the case.
There’s a lot of information online for raising money via crowdfunding and preparing for launch, but unfortunately the manufacturing and fulfillment process goes largely left undocumented. I believe this is primarily due to the vast majority of crowdfunding campaigns never actually making it to this stage and also partially due to it being slightly less exciting for some people.
As someone passionate in branding and marketing, I can safely say that was the case for me. I’d much rather spend 100s of hours conceptualizing ads, analyzing results in spreadsheets and tweaking campaign settings than planning logistics or manufacturing despite both being equally as important.
This is a prime example of how important it is to play to your strengths and delegate your weaknesses. After reflecting on this experience, I now try to only focus my time on my strengths and partner with others that are strong where I’m weak.
Most products are not perfect after just one manufacturing run:
How did our bulk production round go? Well, let’s just say there was a lot of room for improvement.
Our first official production round took place in January 2020, a month delayed (this is apparently common so make backup plans for it to happen and leave wiggle-room for yourself), and the COVID-19 lockdowns began happening in China. We were unable to fly back to be there for the full production run and do the quality checks ourselves. Looking back on this, if you’re planning on raising a significant amount of capital crowdfunding and doing a large manufacturing run, I’d recommend trying to stay at the location and overseeing it the full way through if possible. At the very least, be there in person for QC.
We couldn’t be there unfortunately, so we had a local friend in Shenzhen go to the warehouse on our behalf and send for videos/FaceTime us, but if they’re not as familiar with the product as you they can easily miss important aspects. For us, our achilles heel was our sizing which ultimately led to our demise. Another tip, if costs permit, I’d highly recommend breaking your production rounds into smaller batches and critically reviewing each one before authorizing the next.
Don’t take unnecessary risks and leave the project exposed to rising costs:
This part is especially important. If COVID-19 has taught us anything, it’s that the global environment can change very quickly. For us, during our campaign we promised our backers free shipping and exchanges. Prior to the campaign, we built these costs into our cash flow forecast, but did not leave room for the spikes in shipping costs, nearly doubling, that occurred following the lockdowns.
Looking back on the experience and chatting with other crowdfunded projects, what would have been a safer option would have been to charge for shipping later, once the products were all completed.
Coming from an e-commerce background, free shipping seemed like a standard option, but given the nature of crowdfunding, many backers are more understandable with shipping costs and are willing to pay. Many crowdfunding campaigns don’t even end up sending a product, so if you’ve actually successfully completed your production and are notifying backers that you’re ready to ship, they can be happy to pay for the shipping costs as long as they’re reasonable costs and the expectation was set at the very beginning.
Managing customer/backer expectations and emotions can make or break your campaign:
If you’re not able to make your first customers happy, then you’re going to have a very hard time building a sustainable business. One easy way to upset a customer is by not fulfilling the expectations that you’ve set.
For us, we let our backers down on the delivery dates and the product sizing. Being new to manufacturing overseas, we took the word of our manufacturing partners, added a couple of weeks for padding, and then communicated the dates to our backers for when the products would arrive.
Since COVID-19, supply chain and manufacturing has become increasingly more prone to delays, but delays in the industry were always prevalent. Internally, we knew this, but we also really wanted to believe that it was possible. This is a mistake that I now think about daily to avoid in all aspects of my business, from writing emails and quick coffee chats to partnerships and proposals, I try to be mindful about the direct, and indirect, expectations that could be interpreted from the language I’m using to ensure that I’m best set up to over deliver on expectations in as many places as possible and avoid under delivering.
Thanks for taking the time to read this very personal recount of my crowdfunding journey. Despite being a massive workload and an emotional rollercoaster, it was an unbelievable learning experience that I’m grateful for.
I hope this recount is helpful for you, or someone you know, in some way. I’m still as passionate as ever about crowdfunding, e-commerce and growth marketing and now spend all of my working time helping mission-driven businesses amplify their impact. If you’re running a mission-driven business or starting one, it would be great to connect. I’m always happy to provide any advice I can and work with great people.
All the best,
Rory, Nick and the Candle Support Team
*A big thank you to all of the Candle backers. Thanks for your support and patience with us over the months it required for fulfillment. Thanks to all of the contractors that helped with the campaign as well.