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Funding Lessons from a Successful Kickstarter Campaign

document Crowd Creativity, Crowdfunding

Funding Lessons from a Successful Kickstarter Campaign
By Audrey Watters / January 5, 2011 11:37 AM /

Crowdfunding

your

startup has

through become

sites an

like Kickstarter and IndieGoGO

interesting, and in many cases, quite viable way of financing your project. A number of individuals and companies have been able to raise pretty substantial amounts of money through these services, going well beyond what they initially set as their funding targets.

Most notably of late, was the success of Lunatik/TikTok iPod Nano wristwatch, which set the record for the most money raised via Kickstarter to-date: almost $950,000 from over 13,000 backers. Not too shabby considering Scott Wilson and his MINIMAL design studio set out to raise a mere $15,000 in order to get licensing and manufacturing for the project under way. What made this project so successful? After all, there are other iPod Nano projects. And it's a wristwatch, which even with the addition of a Nano, might not be the coolest or most necessary of accessories. Bryce Roberts, the Managing Director of O'Reilly AlphaTech Ventures, points to some reasons he's identified that contributed to the success of the Lunatik/TikTok fundraising endeavor. These lessons that can be seen in

other successful Kickstarter projects (such as Diaspora), but they're also applicable in many ways to more "traditional" funding efforts.

Tell a personal story

The Lunatik/TikTok "pitch" wasn't a bulleted list of qualifications or clients. Rather, the members of the team "told personal stories that created a connection to the project that had nothing to do with their professional pedigree." While this sort of storytelling doesn't boost their professional credentials, Roberts argues, it does give the entrepreneurs a certain personal authority and helps to connect them to funders and potential funders in a different way. Roberts argues that the best fundraising pitches always emphasize this personal aspect. "It's a given," he writes, "that if I chose to invest in you I believe I can make money, but there are the intangibles around personality, perspectives, and life experiences that will make a potential funder more likely to want to believe you." Tell the product's story If you watch the TikTok video (below), you'll see the product is featured throughout. This demonstrates what the product can do - and that it can do what the startup promises. The video also demonstrates the larger potential of the product. These might be "small, nice little features" that some investors would dismiss. But with the crowdfunding model, the right storytelling around this seems crucial. "The difference between a nano strapped to a wristband and a premium quality, highly designed,

customizable piece of wearable technology is simply a matter of how you tell the story." But even when you aren't using a site like Kickstarter to raise money, it's crucial that your product be front-and-center in your presentations. Give rewards and issue progress reports Investors, by definition, invest in order to make a financial return. Nonetheless, argues Roberts, you should offer more than simply the promise of "making money." These sorts of non-financial rewards can be personal and personalized. By design, Kickstarter tells its users, "the best way to inspire support is to offer people great rewards. Everyone loves limited editions, one-of-a-kinds, and fun experiences (parties, screenings, balloon rides!). Spend some time brainstorming your rewards and people will respond. No one needs another coffee mug." And as your project and your company are constantly evolving, it's good to keep investors and potential investors up-to-date on your progress. In the case of TikTok, the creators even filmed themselves in China when they traveled to the factory where the watch kits were being made. But the same could be said for all funding relationships; keep your investors apprised of "how you're making progress and how your story is continuing to unfold in a big and important way."

Summary Bryce Roberts, the Managing Director of O'Reilly AlphaTech Ventures, points out the funding lessons learned out from the different KickStarter projects like Lunatik/TikTok, Diaspora and others, such as the following:

1. Tell a personal story
2. Tell the product's story
3. Give rewards and issue progress reports

Description There are a lot of iPod Nano projects out there but the LunaTik/TikTok project made it bigger because:

1. The members of the team "told personal stories that created a connection to the project that had nothing to do with their professional pedigree."
2. The TikTok video features the product all throughout.
3. By design, Kickstarter tells its users, "the best way to inspire support is to offer people great rewards.

Tags: Bryce Roberts, Crowdfunding, IndieGoGO, ipad nano, Kickstarter, KickStarter projects, LunaTik, O Reilly AlphaTech Ventures, TikTok

Posted by Luis Enrique Morales

Jan 14, 2011 08:39 am GMT Viewed 5079 times

Author: Audrey Watters Source

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Comments

Ron Simon Maxitees Nov 17, 2011 02:38 am GMT

Excellent article. I plan to use kickstarter in the future for my own projects and this gave me valuable information on how to proceed.
John Genovese Feb 09, 2012 03:06 am GMT

That seems like an extraordinary amount of money to raise compared to what they anticipated on raising... I'm curious of how non-profit startups do on KickStarter if they can't offer financial rewards in return for the investment

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