The 3 P's of Crowdfunding Campaign Success
Show me an entrepreneur with a big idea, and I'll show you someone who has considered crowdfunding.
The popularity of Kickstarter and Indiegogo (and the many others) doesn't necessarily correlate to a successful crowdfunding campaign however. Fortunately some research has been released recently that could result in more campaigns reaching their funding goals.
Researchers at University at Buffalo School of Management found that successful crowdfunding campaigns share fundamental similarities after they analyzed more than 170,000 Kickstarter campaigns that ran between the 2009 launch of the Brooklyn-based platform and the end of 2015. Only U.S.-based campaigns with a goal of more than $1,000 were included in the study.
So what are the indicators of whether a crowdfunding campaign will be effective? The answer is far more straightforward than you might imagine:
Photos & Videos: The study found that the more engaging and visual a crowdfunding page is, the more likely it is for a campaign to reach the funding goal - so include more (and better) images and concentrate on developing compelling and descriptive videos.
Awesome Shield, for example, is an at-home code school for kids. It currently has 181 backers and has raised more than $16,000. Awesome Shield includes a three-minute video explaining what it is, what its goals are, what past successes it has and more - to help backers not only feel comfortable about investing but also get potential customers excited about the launch.
Zilker, a smart irrigation system that works similar to Nest in that it waters based on time of day, weather and other elements to save this resource, provides even more images including what the product will look like for end-users, graphs showcasing how the money will be spent and even the hardware that makes up the device.
Previous Success: Experience matters to investors - even those investing with the "crowd." If entrepreneurs have a track record of success, the study found the campaign was more likely to be funded. Mr Beam II is a desktop laser and cutter and engraver. With "II" in the title, potential backers will want to know about the first Mr Beam kit, which the innovator provides. Previous successes can even be, however, a person's own experience outside of the product they are seeking funding for (e.g., relevant positions held).
Positive Comments: The researchers analyzed more than 8.7 million commented posted by 1.5 million individuals and measure the positivity of the sentiment in each comment. Those with more positive comments were more likely to reach their funding goals. While difficult to manipulate overall sentiment, it could prove useful to encourage backers to leave comments.
It's equally as important for creators to respond to comments once left. The Hip-Hop Word Count (a searchable rap Almanac) is a good example of the creator being active in the comments section.