Whether you’re a startup or an existing business, a rewards-based crowdfunding campaign offers debt- and equity-free money to launch a product. That’s right! You don’t have to give up a piece of your company in exchange for money or pay interest on a loan.
Photo credit: George Is Keeping An Eye On You!-by peasap via Flickr
Women are proving that they have the right stuff to be successful at rewards campaigns. I know this from first-hand experience and from women I’ve interviewed. I raised 71% more than my $7,500 campaign goal.
Women are organized, diligent, clear communicators, good storytellers and skilled marketers. The result: Women had a 70% success rate in reaching their Kickstarter goals vs. 61% for men. Further analysis showed that it was not women’s more modest financial goals that accounted for their higher rate of success, according to research conducted by Hebrew University.Berkeley-Haas School of Business and the Kellogg School of Management found women not only outperform men, but they uncovered why: the use of vivid and inclusive language. Women have the ability to tell compelling stories and connect at an emotional level. Crowdfunding truly is a female founder'sbest friend.
I recently connected with Shelley Prevost of Torch, who exceeded her goal of raising $150,000 by 8%. Two thirds of parents want to limit or guide their children’s use of the internet, according to Alexandra Samuel, who researches the way we use the internet. Torch is a simple-to-use, smart router that allows parents to guide their children’s use of the internet.
So how do women do it?
- Build your network before you need it.
The word “crowdfunding” is something of a misnomer. In general, the majority of money raised comes from people who know of you directly or are one degree away. They are interested in what you are doing. Few campaigns go viral.
For nearly a year before her company’s campaign, Prevost took every opportunity she could to connect with her community by speaking at conferences and school events about the challenges parents’ face with their children’s use of digital technology. She always brought an iPad so she could add people to her e-newsletter mailing list.
- Research which crowdfunding platform is the right fit for your campaign.
Prevost confessed that she was uncertain about which platform would be the right fit for her campaign. Ultimately, she chose Kickstarter. Her reasons include:
- Its air of exclusivity. They vet products. Not everyone “makes the cut.” Torch did. The bad news was that the vetting process took longer than Prevost anticipated, which delayed the campaign launch. Forewarned is forearmed.
- Because Kickstarter has the most traffic of any crowdfunding platform, you are likely to get more attention from people outside your network.
- Kickstarter backers are early adopters of technology and Torch is a technology product.
- Rewards matter.
Prevost had an intern research the types of rewards that work best for the most successful campaigns ‒ those that reached the multi-million level. The most successful crowdfunding campaigns:
- Skip the “atta girl” type rewards that you offer for a few bucks or less and concentrate on higher level rewards that include the product. Low-level rewards result in very little money. Higher rewards require fewer sales to reach your goal.
- Include time-limited rewards. Torch’s early early bird special sold out in a week.
Check out the Torch’s Kickstarter pageto see its rewards.
- Put the “Why” into your story.
“When you’re trying to influence, persuade or convince people, nothing is more powerful than a good story,” according to Donna Cravotta, CEO of Social Sage PR. Crowdfunding campaigns rely on generating attention through social media and Cravotta is an expert on social media. She was one of my advisors.
“People don’t buy what you do, they buy why you do it,” says Simon Sinek, speaker and author of Start With Why: How Great Leaders Inspire Everyone to Take Action. Your story and your passion make you stand out in a crowd and help you connect with like-minded people, the kind of people who will support you even when times are tough. Watch Sinek’s video on the topic.
“People want to be part of something bigger,” said Prevost. Her son was born to be a techie. He loves going online and exploring. She wanted to steer him away from the bad stuff and toward the good stuff. There were no experts to advise her on how to do this. Not even the American Academy of Pediatrics or schools provide guidance. The market had a hole. She recognized the opportunity and filled the hole.
- Grab attention with your video and spark controversy.
Video is a powerful way to tell your story. The extent to which a video can improve your chances of a successful raise through crowdfunding isn’t a hard number, but it does improve the odds. First and foremost, a video is a chance to tell your story and convey your grand plan. It lets you show why you started this venture and who is behind the company. Make the most of the moment.
You either loved Torch’s video or hated it. The voice-over opens with “Remember when playing with blue balls wasn’t painful.” The visual shows a young girl playing jacks with a blue ball.
The video drove a lot traffic to Kickstarter.
I used a startling statistic. Dream, Girl: The Documentary filmed young girls talking about their big dreams for when they grew up then provided the crushingly low stats about the percentage of girls with the confidence to pursue their dreams. The team at Thinx told an embarrassing moment that many women can relate to.
A good video makes your heart race and shows the fire in the belly of the entrepreneur and her passion to succeed.
- No one size fits all marketing approach works. Experiment!
Facebook ads, Pinterest and email were the clear winners for Prevost. Interestingly, buyers made the purchase a two-step process . Moms made the decision to buy, but dads made the purchase.
Continually writing about the campaign in Forbes, LinkedIn and elsewhere laid the foundation for my rewards-based campaign, but it was highly targeted emails that drove people to back my campaign.
For Dream Girl’s filmmaker, Erin Bagwell, waging a relentless marketing campaign won the day. The campaign included social media (blogging, Twitter, Facebook, and Instagram), phone calls, in-person networking events (attending nearly 80) and media outreach. The single most successful tactic for Bagwell was a blog about her by a well-respected blogger, Marie Forleo.
- Show momentum.
If you want to succeed at crowdfunding, you have to show support from the get-go. Backers are likely to stay on the sidelines until they see that others have anted up. Before you launch, identify the people you think are likely to back your campaign. For Prevost, that included family, friends, and people who had given her their email address. Target them even before the campaign begins. That way, you establish that all-important momentum and are more likely to succeed. Torch generated more than $25,000 in revenue on the day it launched.
- Money and work effort grease the wheels of a successful crowdfunding campaign.
Prevost was lucky. She had seed funding from the venture incubator, Lamp Post Group, in which she is a partner. She used the money to hire people to build the prototype and hire a marketing agency, which did the branding for Torch and the crowdfunding campaign, including the videos.
Prevost and her marketing team were agile. They strategized every other day at the beginning of the campaign and daily at the end of the campaign. They changed tactics based on what was working in the moment.
Importantly for Prevost, the successful campaign demonstrated that she and her friends were not the only ones interested in the product. It had a bigger market. Prevost is now raising $2 to $3 million in venture capital. The money will be used to build out a customer service team which, like Apple’s Genius Bar, will provide diagnosis and troubleshooting. Differently, it will also recommend appropriate content based on your children’s interests.
Torch is the kind of innovation that only a mother would think of. Which is why, it is so important to invest in women-led companies.
So, women, don’t let your dreams die. You can do it!
