The world of crowdfunding can be a little daunting. There are so many pieces to the puzzle and so many services available. From a layman’s point of view, many of them seem beneficial. However, it’s an entirely different animal than just typical development process as it is about running a successful campaign. Most do not want to burn time and money in areas unless they directly benefit the event. ISO Interactive thought this is valuable information for others that are trying to gain success for their venture. So here we are we are.
About:Interview Shane Liddell – CEO of Smart Crowdfunding LLC
A primer on crowdfunding
Before jumping into the interview, we thought it would be helpful to provide a general understanding of what crowdfunding is within the context of this article. So, to get started we are talking about online crowdfunding. This is where an individual or team decides to take their idea, prototype or project that they want to market and request financial donations from the public.
Crowdfunding is by definition, “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.”
People who donate to crowdfunding campaigns tend to support ventures they are interested in via an online system (website, app, etc…). More often than not, these are made up of micro-donations which are gathered from a fairly large group of people. The donors can be reached through various social media platforms, newsletters, blog posts as well direct email (and that sort of thing).
So where a typical funding campaign is based on a few investors with higher individual amounts of funding, online crowdfunding has many users with lower individual amounts of funding. For crowdfunding, many micro-payments add up to an amount to complete the current goals of the campaign. Now, this is just the rules in general. Each platform works slightly differently, with their own type of ventures and goals.
I don’t want to get too much into the details, but these are some of the more well-known crowdfunding platforms.
- Gofundme: https://www.gofundme.com/
- Kickstarter: https://www.kickstarter.com/
- Indigogo: https://www.gofundme.com/
- Teespring: https://teespring.com/
- Patreon: https://www.patreon.com/
- YouCaring.com: https://www.youcaring.com/
- Crowdrise: https://www.crowdrise.com
- Donorschoose.org: https://www.donorschoose.org/
- Kiva: https://www.kiva.org/
- Giveforward: https://giveforward.com
ISO Interactive was looking for a better way to understand the crowdfunding space as we have a few internal ideas that we want to fund. We figured it would be nice to fund some of our own projects instead of solely depending on clients to pay the electricity bill 🙂
We know a few buddies that worked on successful campaigns in the past, and some experts in the field. We also had some individuals that wanted to be part of our success. After some initial investigation, we found there was much more work that involved in crowdfunding than we thought.
One person, we reached out to was Shane Liddell of Smart Crowdfunding LLC. His entire business is designed to help increase success rates of crowdfunding campaigns. To be clear, most campaigns fail and like most reputable agencies and due to the fact that every campaign has differing levels of appeal, he does not guarantee success. He has some good common sense advice that is helping us set the foundation for a successful campaign.
CEO Smart Crowdfunding LLC
Interview Questions & Answers
Q. Hi Shane. Can you tell us a little about yourself?
A. I became active within the crowdfunding industry early in 2012 when I volunteered to try to help the non-profit Sanwild Wildlife Sanctuary raise funding to save their 16 lions. After losing almost 70% of their sponsors due to the recession, they’d run out of money to feed them and this was a really desperate situation. It meant that if the funds weren’t raised, there was the possibility that all 16 lions would be euthanized. To cut a long story short, through 60 days of crowdfunding we managed to raise just over $20,000 for them and bring a happy ending to the story.
Since then, I’ve delivered successful campaigns for entrepreneurs, startups, corporations and filmmakers and have assisted more than 500 crowdfunders with campaign development, consulting, marketing and promotion services, some of whom have raised millions of dollars in the process. I also hold the position of Executive Director of the Crowdfunding Professional Association (CfPA).
Q.Why did you create Smart Crowdfunding LLC?
A.I saw a need for marketing services to help others who were crowdfunding. At that time there were only 3 other crowdfunding marketing agencies in the world as crowdfunding was still in its infancy. In the early days, I was helping up to 30 concurrent customers with their crowdfunding campaigns each month. It was a crazy period and 16- 18 hour days were the norm.
Q. How does it work?
A.We offer standard promotional packages for those who have conducted their own pre-launch activity and are ready to launch within a week or two. However, most of our business is conducted on a consulting level where we guide our clients through the entire crowdfunding process.
Q. What are the major advantages over other competitors?
A.Hands-on experience is the number one advantage we have as we’ve worked directly with a lot of campaign creators over the years helping us to really understand how the different crowdfunding platforms work.
Q. What sort of cost are involved in crowdfunding?
A.Most crowdfunding platforms such as Kickstarter and Indiegogo take a 5% fee of funds raised plus payment processing fees of around 3.5%. A campaign without an audience is not going to go anywhere so add campaign marketing costs of around 10% to this meaning that total campaign costs are 18%- 20% of the funds you hope to raise.
Q. What type of projects do you support?
A.We support all types of campaigns – Reward and Donation and Equity Campaigns
Q.Can you describe the major steps of running a successful crowdfunding campaign?
A.One of the most important steps of all is in identifying who your backer is as all other marketing activities form around this critical step.
Profile your backer
Who is this person you are searching for to fund your campaign? What are the demographics – male/female, geographic locations and age groups? What are their interests? Use brainstorming sessions with your team to nail this step down tight
Identify your Influencers
Who can assist you in reaching out to your profiled backers? For example, a campaign developed around an auto-focus product aimed at studio cameramen will have film producers, film directors, and possibly actors as Influencers. Communicating to these people should always form part of your marketing efforts too.
Identify communication channels
In order to communicate with your potential backers and influencers. Social media – make sure you create a Facebook page specific to your crowdfunding campaign and at the very least a Twitter account too! Identify other social media groups and pages where they can assist in reaching out to your audience. Begin to develop relationships with these groups and pages by engaging with members/followers.
Bloggers, journalists and other media platforms that can help you reach your target audience. Engage with them early and do your best to develop personal relationships.
Develop your social media audiences – using targeted Facebook ads to build up your list of followers. After all, you need to have social followers to add credibility to your crowdfunding campaign. Target your ads using the profiles you developed earlier.
Remember, Facebook is King! Plan to spend no more than $20 per day on this process as ad spend is far better utilized when you have a live campaign and can convert visitors to cash!
Build a landing page
To build an email database. A targeted email database is one of the most effective tools in your crowdfunding toolbox and targeted email lists generate 30% more funding than any other promotional tool. Use one of the recommended services listed in the free Indiegogo spreadsheet or build your own landing page on your website. Remember a landing page is only as good as its conversion rate so if you need help be sure to reach out to a professional.
Q.What other 3rd party support services do you suggest?
A.This is a tough question to answer as it really depends on the available budget. Effective marketing costs big money. Unfortunately, too many people think that paying $100 for a service will translate into thousands of $’s to their campaign. This is what we call unrealistic expectations, a common problem among those attempting to raise funding using crowdfunding. However, I do suggest those with a physical product utilize the services of GadgetFlow (www.thegadgetflow.com) as this service really does generate huge exposure, and in most cases many backers for campaigns. Your readers can claim a 30% discount using this link http://thegadgetflow.com/submit?ref=11 and coupon code 44JJ99.
Q.What type services should people be careful of?
A.Avoid cheap PR services. Think about it. If you pay $39 for a press distribution service then it’s highly unlikely that it’s going to help get thousands of visitors to your campaign page. Effective press distribution services (PRWeb and PRNewswire) do not come cheap and charge in the region of $400 for a single press distribution.
As the crowdfunding industry has exploded then so have a number of services on offer, including the charlatans and self-promoters. Always conduct your own due diligence on any service you are considering to hire and use the Whois lookup (whois.icann.org) to verify their claims of a number of years in business.
Q. How much work goes into a successful crowdfunding campaign?
A. It really depends on what marketing assets (social media followers, email lists etc) you already have before you begin. In most cases, I recommend a minimum of 60 days prelaunch period. This allows enough time to fully prepare.
Successful campaigns need constant monitoring and I would always suggest you have a team of at least 2 people available for the duration of your live campaign. I know of highly successful campaigns where the team has received over 4,000 emails a week! Be prepared for anything!
Just to give the audience an idea, these are some basic charts of average success rates for crowdfundraising campaigns based on certain datapoints.
Q. What’s next for Smart Crowdfunding LLC?
A.We are into our 5th year of operation now and although we support all types of campaigns, we are slowly moving more towards equity crowdfunding. This is definitely the high growth area of crowdfunding today and our parent company Spectikon Corporation is developing several platforms and portals in this space too, with our very first platform (Techfunder.com) planned to go live later this year.
Creating a successful crowdfunding campaign takes proper planning, appropriate budgets and the right team in conjunction with additional social media and consulting services. It can be an adventure that takes a lot of time and effort, but can also help fund projects dear to your heart. Or for us, it can allow creating a project we want for ourselves, versus what a client is paying us for. At the end of the day, it is about making things happen.
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