When Kickstarter launched it was seen as a grand experiment for the largely untested crowdfunding model. Would people actually pony up cash to support others’ ideas? Would projects take off or die on the digital shelf?
Two years later and those questions have been answered. Kickstarter, which provides a platform for people to solicit pledges for their projects, recently released statistics on its performance: more than $53 million pledged, nearly 6,000 pledgers and a project success rate of 43%.
Clearly, crowdfunding can work. But there are some big lessons marketers should gleam from Kickstarter’s success. We share 5 of them here.
Never Underestimate The “Cool” Factor
On the face of it, people who support projects are on Kickstarter are not getting a whole lot in return. Sure, there are some incentives. But the biggest draw by far is the desire to be part of something inventive, new, exciting – just downright cool.
Take the case of Diaspora. The open source rival to Facebook drew a lot of attention from the Web and the mainstream press alike. People wanted to feel like they were playing a role in building something big, and so the little startup took in 2,000% of its funding goal and had 6,479 backers, including Facebook CEO Mark Zuckerberg.
For marketers this movement is a boon. Make your customers feel like they are part of something cool and they’ll be ready to throw their money behind it.
The Value of Visuals
Every Kickstarter project features a video of the founders explaining their idea, how they plan to build it out and what you’ll get out of it. Sometimes this can be as informal as a chat over coffee. In other cases, it’s much more imaginative, as this project demonstrates.
Kickstarter projects can live or die based on a video. It emphasizes the need for video marketing, and to create content that can spread from its place of origin to all corners of the Web. And it proves you can be entertaining and informative at the same time.
If someone is giving you their hard earned money to support your project, you should probably keep them apprised of its progress, right?
When Michael Rondinelli turned to Kickstarter to fund his GoPano micro project, a device that plugs into the iPhone4 to capture 360-degree movies, he made sure supporters were in the know. Using the platform’s “Updates” tab, Rondinelli answered a long list of frequently asked questions and a 360-degree sample video taken from the device he’s proposed to create. Additionally, Rondinelli has been steadfast in replying to the large number of comments posted to his project.
Good marketers know the value of lead nurturing. Kickstarter just proves how valuable continued engagement is. Rondinelli has far exceeded his fundraising goal with more than $128,000 raised and over 2,000 backers.
Incite With Incentives
As much as people love supporting something cool, they want to take away something tangible. Kickstarter projects offer incentives to supporters tied to the size of pledge. These incentives can range from a sticker to credits in a movie.
The band Green River Ordinance jumped on Kickstarter to raise money for an EP of covers and a new full-length album. And they came up with some creative incentives to entice supporters. For $5 you got three MP3s one week before the album was released. For $5,000 you would receive a whole host of goodies including an autographed guitar, a chance to play an instrument or sing on the album and guest list spot for life to the band’s shows.
The idea is not just to give out tote bags and branded mugs. Successful Kickstarter projects provide incentives that make the supporters feel like they are involved in the creative process or ahead of the curve. Marketers should tap into customers same desire for social status and personal involvement in the creative process.
Early Success as Groundswell
Once a Kickstarter project receives a single pledge, it’s chance of getting fully funded rises to 52%. Once it reaches 30% of its funding goal, it’s success chance spikes to 90%.
These numbers demonstrate the importance of measuring and building on early success. By tracking what moves the needle early in your prospects buying cycle, and using lead scoring to understand what actions push them further down the funnel, marketers can comprehend when they’ve reached the tipping point. Like Kickstarter, the job isn’t over ‘til it’s over. But doesn’t mean you can’t benchmark along the way.
What lessons do you take away from Kickstarter’s success?