Millions of people around the world are currently using Indiegogo to raise money for their entrepreneurial, creative and non-profit endeavors. But what are the best online funding practices? Founder Danae Ringelmann lets us in on a few trade secrets...
Entrepreneurs of all sizes and stages are using Indiegogo to launch and grow their businesses, but why?
Firstly, let’s consider the three major risks that entrepreneurs face:
- Market risk – the risk of building a service or product that no one (or not enough people) want or need
- Execution risk – the risk of poor execution in development
- Financing risk – the risk of not raising the capital to execute
Indiegogo is valuable for mitigating all of these risks. When people fund an idea or product on Indiegogo before it actually exists, it’s a testament that they really want it, demonstrating reduced market risk. And data collected from an Indiegogo campaign is real market data, not just hypotheticals from a focus group. CEO Sonny Vu of Misfit Wearables, that raised $846,000 on Indiegogo, described this phenomenon as “making you smarter, faster.”
Below are several tips we at Indiegogo have learned over the years that truly make a campaign successful not just at raising money, but also at mitigating market and execution risk.
Preparing your campaign
- Know your 4 Ps. The four reasons people fund campaigns are People, Passion, Purpose, and Perks. Funders want to empower the team behind the project, be part of building something big, put their money where their mouth is or get something interesting in return. This means that as you prepare your campaign, answer not just what your project is about, but who is behind it and why it matters.
Prepare your mindset. Indiegogo is a mechanism to bring together like-minded people passionate about making an idea happen, so treat your campaign experience like a collaborative journey. Treat your contributors like your teammates, not just funders.
- Outline your hypotheses. List out possible customer segments, possible media outlets that reach those segments, possible perks, possible features and possible price points. Indiegogo’s unique perk-swapping functionality allows you test all these possibilities during your campaign. Be prepared to be wrong and change your campaign as you go. By the end, you’ll know who your customers are, what products or features they prefer and what they’re willing to pay.
Prepare an authentic pitch. Ask yourself why your business or project is important. Why are you so excited about it? Those that speak from a truly authentic place on Indiegogo fare the best. When you put together your campaign video, make sure to speak from the heart.
- Set a specific funding target. You certainly don’t have to raise all of your financing needs in one campaign. Simply aim for how much money you need to move your business to the next milestone and outline how you plan on using the funds. Add incentives for your contributors by identifying and describing what we call “stretch goals,” which are how you’ll spend any funds raised above and beyond your funding target.
- Research campaigns like yours. After an Indiegogo campaign ends, it becomes a perpetual online resource. Campaigns that reach their funding targets tend to weigh the outcome of every decision they make, so studying and leveraging their decisions is a smart use of your time. Similarly, it’s a good idea to learn from campaigns similar to yours that didn’t reach their goals. Identify the aspects of their projects that didn’t perform as expected and think twice about incorporating them into your own campaign.
- Timing is key. Consider an overall timing strategy. Many first-time campaign owners are surprised to discover holidays aren’t necessarily beneficial to campaigns. Pay attention to the audience you’re looking to reach. For example, you may want your campaign to end on a workday so your funders will be more likely to be tuned into their computers and receive any final messages asking for support.
Running your campaign
- Make campaign management part of your workday. Be aware that a campaign is often not just a side project. You’re raising money, marketing, testing assumptions, discovering and engaging customers all at the same time. Don’t compromise the results; be fully committed.
- Engage. Engage. Engage. Indiegogo is a merit-driven amplification engine. The more effort you and your funders put in, the more Indiegogo promotes, shares and helps you reach new audiences. We’ve developed the Gogofactor – an algorithm that automatically and objectively measures how hard campaigners are working and how much their audience is engaged. The higher the Gogofactor, the more we amplify. Campaigners who update their funders three or more times raise 239% more money than those who update less frequently.
- Make sharing easy. A designated igg.me link (customized when you launch your campaign) and hashtag for your campaign go a long way toward enabling others to share your message – and keeping the traffic trackable. Every time you post, write or release campaign-related content, make sure to always include the link back to your campaign.
- Monitor your dashboard. Watch which perks are gaining momentum and which channels are driving traffic and funds. If a perk isn’t getting claimed, swap it out with another or change the price point. If one perk is claimed out, add the same perk at a higher price point and see if people claim it. Also, if certain people are driving many visits or contributions, launch a referral contest. Reward people for sharing and helping bring more people to your campaign. You can track all of this data on your Campaigner Dashboard.
- Reach out to media. Put simply, trying to land media coverage too early on may not be the best use of your time. For the press to bite, they need a story that will garner public interest and for your campaign to qualify, it should have already secured enough support from funders to encourage others to get on board. If you jump the gun and try to sell your story too soon, the numbers likely won’t be there to back up claims that you’re newsworthy.
My co-founders and I started Indiegogo to democratize funding and empower all people with the power to fund what matters to them. Today, it’s working and millions of dollars are being distributed to campaigns across the world every week. You can find many more useful tips at the Indiegogo Playbook and Blog.