UPDATE: This article is two years old now and it’s surprising that we don’t yet have more crowdfunding agencies and professional crowdfunding campaign managers by now. Here’s a discussion of why: http://crowdexpert.com/crowdfunding-info/crowdfunding-consultants/
The Rise of Crowdfunding Professionals
By: Jason Harris Koonce –
While crowdfunding may seem like a recent development, it actually has its beginnings in the 19th century when the Committee for the Statue of Liberty ran out of funds for the pedestal. A ‘crowdfunding’ campaign was then begun which asked the American public to donate $100,000 (which they did in six months) to complete the project. This article aims to address two main questions that are becoming ever more essential to crowdfunding campaigns:
A) When do you need to seek outside consultant assistance for your campaign
B) What are you looking for in a consultant to give your campaign the best chance for success
The first internet-based platform dedicated to crowdfunding had its start in 2001 with the U.S.-based company ArtistShare, timed just right for the coming dramatic change in global economics. There was a time when the best and brightest sought out the right fit in regards to a potential employer. However with college graduate employment rates at all-time lows, the talented and ambitious are trying their hand at creating crowdfunding campaigns.
It’s no wonder that the Andreesen / Horowitz venture capital firm invested 20 million in Teespring, an innovative crowdfunding platform for t-shirts. That isn’t even the first investment for their firm as they also invested 23 million in a Series B round for Crowdtilt in 2013. When you consider that venture capitalists conduct painstaking research into the companies in which they invest, it’s obvious that it takes more than ambition to attract that kind of investment.
Just Hire a Consultant, Right?
What we’re talking about now is an outgrowth of the crowdfunding boom; crowdfunding professionals. There are a number of companies that have sprung up fairly recently that specialize in managing aspects specific to crowdfunding campaigns. You must ascertain whether they are just applying their skills acquired in the business world, or their skills honed in campaigns. That is key. Still, there is a large untapped portion of the workforce that dovetail nicely with the following crowdfunding roles:
– Social Media management
– Crowdfunding Campaign Manager
– Financial Manager
Also, many of these professionals have experience creating, backing, and assisting with both successful and failed campaigns. Experience in crowdfunding projects (that is, repeated successes and failures) can tell you more about how it really works than any data you will find by applying traditional research methods. A large degree of the appeal of crowdfunding is that it doesn’t exactly adhere to traditional business management concepts. This basically means that finding the right people is going to be more about the right ‘fit’ with a lesser focus on conventional qualifications. A campaign team has more in common with a sports team where talent, while absolutely neccesary, is nothing without good chemistry amongst teammates.
Though we listed it fourth in the list of roles, it is critical you get your visual presentation right. Here, it makes sense to hire out a professional. Since your campaign obviously needs to present a serious, professional-quality, we’ll let an expert who has worked on crowdfunding campaigns have the floor. Kate McDonald of YUP VIDEO has the following to say about videos for your campaign:
“Get fancy, of course. However, there’s a fine line between adding some extra panache to a campaign and just going over the top. Video is the best way to do that. Hiring a videographer and using professional equipment is simply going to look better than having a friend shoot your campaign video with a Flip cam, smartphone, or digital camera. (no one wants shaky-cam either!) That being said, no one wants to spend the nest egg they’re putting forward to work on a crowdfunding campaign towards an elaborate video. Be sure to hire a company you can trust, who will work with your ideas and budget for the best results
Lastly, keep it to the point. Today, humans have an eight second attention span. That being said, try not to make your video long and verbose. Make your video direct and to the point, while still remaining engaging and relatable.”
Vab Media Design & SEO Marketing is a firm that assists creators with campaign publicity. Jaclyn Sorese, technical writer and bookeeper for the firm had the following to say regarding some process steps that were made for the Catamaran Library Reader Kickstarter Campaign:
“We thought we could just use social networks and emails to get crowdfunds…well…we were wrong. We began with trying to target advertisements…started posting more on Google Plus, focusing mostly on literature and arts communities…Since they had a few videos, we dressed up Catamaran’s YouTube channel and moved their videos from Vimeo to YouTube. We attempted to reach out to a few CEOs and influential backers to pledge higher amounts”
For this project, ultimately the founder of the Catamaran Library Reader was able to find a backer to pledge an amount that would reach the goal.
How do I Know WHEN to Hire?
Still, you need to know when to start looking for a professional? Secondly, where do you look for in when looking for a consultant?
The answer to the question ‘when to start looking’ really comes down to a single factor: time. Lukas McNelly who wrote a piece called CrowdFunding 201: How To (Not) Fail has this to say:
“…get ready to put in a lot of hours…How many hours is a lot? Well, how many do you have? That’s not enough. Now figure out how to increase that number.”
Done well, running a successful campaign takes a diverse skill-set. What you are going to be looking for in a consultant? Creative types, who are perhaps the largest group taking advantage of this new form of fundraising, likely need assistance with marketing and business aspects. There are many projects with tons of potential, but because the creator doesn’t have the requisite knowledge to take advantage of the method, they end up falling short.
With that said here are a few rules of thumb one can follow when searching for talent to give you a good chance of success:
- Don’t look for a ‘Crowdfunding Expert’:
The fact of the matter is that the industry in it’s present form is not mature, and no one has been running campaigns long enough to claim they are an ‘expert’. Murphy’s Law applies to crowdfunding just like it does to any start-up, and the methodologies and studies that will one day be the keys to success aren’t here yet. It’s best to look for someone who can shore up your weaknesses, the spots where you lack experience and have holes to fill.
- Be specific:
Of course this is obvious, however with crowdfunding there are a lot of moving parts. Many tasks must begin even before your campaign is setup on a platform. Additionally, assignments must be handled by relatively few people simultaneously, so confusion will ‘gum up the works’ if everyone isn’t clear on their responsibilities.
Salvador Brigmann who has participated in a number of campaigns from both sides has this to say:
“When hiring a crowdfunding consultant, it’s important to be crystal clear as to how they will add value to your campaign. Will they be helping you market your campaign to your target audience? Will they be working to generate news articles about your project? Are they helping with planning the campaign strategy?”
- Agency or Freelancer?
You already understand that you must have a solid relationship with your backers. Your passion and enthusiasm for what you are doing needs to be clearly evident. The question isn’t so much about your style – whether that be introverted engineer, or extrovert galvanizer – but has more to do with maintaining your vision throughout your campaign from start to finish. Will agency staff muddle your vision? Will a freelancer leave you short when it comes to support?
- No success guarantees:
The rate of success for campaigns is estimated to be around 50%. If a person or agency tells you that they can guarantee success, keep looking. There is no silver bullet or methodology for success.
- Consultants should be objective:
There are already a great many platforms out there and you don’t want someone steering you to any one in particular because of a business relationship. It’s not just about the money. They should also understand your passion and help you get that across, get your story out. The point is they should actually care about your story. If you are underprepared, they should be able to say no, and not only have an eye on making a profit.
Rose Spinelli, of The CrowdFundamentals has this to say regarding the services she offers:
“I’m going to get more stringent in terms of who I choose to take on, because what’s the point? If you can see from the beginning that they don’t have a lot of the elements in place, the social net- working community being one of them, I don’t think it serves anybody to launch [the campaign]. What I would tell people is, “These are the things I think you’re lacking, go and work on those, and then come back”
- Consultants should be part of the conversation:
Your consultant should not only have participated in projects from the management side, but also backed a number of projects. Anyone can find data on the internet, but you need someone who has gotten their hands dirty in blogs and forums. The crowdfunding community is still in it’s infancy and if someone is working in the industry as a consultant, they should be nurturing and shaping it as well.
The Campaign Doesn’t End Once Your Fundraising Goals Have Been Achieved
When you have reached your target, you need to deliver. Again, Murphy’s Law applies here. There are more than a few instances of high-profile projects that have matched or exceeded their funding goals, yet have failed to deliver the product as promised. Take Lockitron for example. The enterprise proposed building a smart lock that would enable you to open a standard deadbolt with your smartphone – an ambitious idea that raised over 2 million dollars. To boot, they shipped successful, crowd-funded projects in the past. The first version of their product required that you replace the lock while the current version doesn’t. As of January 2014 however, only about 100 of the more than 14,000 backers have received their (bug-ridden) devices. The original shipping date was March 2013…
Jamey Stegmaier of Stonemaier Games has launched and backed a number of successful projects and had the following to say regarding product delivery:
‘…common practice [is] for Kickstarter creators to deliver late…it is widely excused. That means that you can exceed expectations simply by delivering on time!’
Of course, immediately following he remarked:
“In the meantime, make sure to deliver on the other promises you made, especially in terms of quality. Don’t cut corners.”
A good place to look for crowdfunding strategies is the GoCrowdfund project, run by Elizabeth Gerber and her team of researchers from Northwestern University, “…which aims to help entrepreneurs looking for advice on how to run crowdfunding campaigns.” They are running a crowdfunding campaign that doubles as a research study. They are aggregating data and best-practices from multiple crowdfunding creators running campaigns. The goal is to create a toolkit for would-be crowdfunders ‘…to help entrepreneurs avoid making the mistakes of their predecessors and use existing knowledge to create a successful campaign’.
Whatever the case, time is of the utmost. Expect spending upwards of 40 hours a week working on your campaign. The start date and the end of the project are days you probably want to take off of work. If you are not too keen on being a full-time marketer, find someone who shares your vision and is willing to work with you as well as working for you. Again, time is of the essence because you need to make sure your backers feel comfortable pledging their support, not just their money.