SA Crowdfunding Blog

SA Crowd Funding Blog

SA Crowd Funding Blog (55)

Discussion and tips on crowdfunding in South Africa

So we thought it may be a good idea to interview some of our most active funders on StartMe and ask why they do or do not contribute to projects on our platform. The answers was shed some real light on the issue of funding goals, rewards, presentation of projects and a few other issues.

In the end we convinced 7 serial funders to give us the low down on their decision process. The answers varied quite a bit as you can imagine but there were a few very interesting common ideas. 

These are some representative answers that some of the interviewees gave:

1) Don't ask for too much, tell us what you need the money for

The number one reason I'd say projects fail is that they ask for too much money. I know product design and manufacturing doesn't come cheap but if you have a small little item you want to produce that will have a final price of maybe R2000 or less, don't be surprised when you have trouble raising many tens of thousands of Rands for it.

Whatever you need in terms of money, be sure to explain in as much detail possible how the money will be used and what it will be used for. Sometimes I've seen too-high R projects get more funding when the creators came back to explain how much equipment was really necessary and what the going rates were.

This applies equally to products as it does to things like film or music production. If you asked a random person on the street if R5,000 was enough to record and produce an album in this day and age, I think you'd get agreement. If you said you needed R100,000 to make a record, I think most people would say that is too much. I've seen a lot of film projects ask for upwards of R300,000 for paying a team of editors, but very few of those projects get funded and I think that's because people are used to seeing smaller films done in something like Final Cut or even iMovie and would prefer to see them done for much cheaper.

2) Project need to be creative and unique:

There just seems to be too may generic projects. People on the site really seems to think that us visitors have money to give to anyone. Consulting firms, web developers, magazines, you name it I’ve seen it. If you want your project funded you better be unique. Look at the Trevz Eco friendly watch project, or the wind turbine project, these are unique ideas that we can excited about. Something I'm proud to put my name next to. A great idea is unique, it addresses a need that nothing else does, and it helps if it does so in a clever way. Now that can be a new iphone app, a great new SA band or whatever else, but it helps if it adds to the world as being a new form of creativity.

3) Why does no one tell us who is in their team. Do people really expect me to contribute to someone who I can’t see and don’t know who it is at all. Tell me who you are. Why do they not use the My Team section at the bottom of project to tell us more about the team behind the idea. I want to know who I'm supporting.

4) Structure your rewards carefully

Why do project not think about their rewards a bit more? I’ve seen quite a few of these projects, so lest for instance they have a great idea for a cool thing that I want to help fund (mostly because I want one of the things they will produce), and they are asking for a significant amount of money, but their rewards are structured in such a way that you get one of the things they are producing for a small amount of money.

So imagine you were making a thing and you needed R150,000 for it, but if you gave just R20, you got one of the things. You could offer more copies for R100,R250, and R1000 contributions, but imagine that a normal person only has use for one of these things. Chances are, you're going to have trouble finding 1,500 people on the internet that want your thing in the month or so you run your StartMe campaign. If instead you were giving away the thing at R300, you'd need just 500 people to get you to your goal. 

5) So many project get posted and then just raise nothing at all. It seems to me that those projects which does get funded and certainly the ones I always contribute to are the projects that have a chance of making it. I have not posted a project yet as I'm still trying to come up with the right idea but if I was going to post a project I will make sure that a get a few people to contribute t it just to show everyone that, hey this project is going somewhere, lets also support it.

I'd say if you had a project fail on StartMe, the best thing you can do is to try and cut your costs and scope of the project accordingly, and re-launch it. I've seen several projects fail at R100,000+ and come back in a slightly more limited form for less than R50,000 and get funded fully.

Personally I'll far rather post a smaller project of say R30 000 and get it fully funded and come again with the second part of the project. Much rather this than not get funded at all.

So to those of you creating projects, we hope this helps and is a bot more of an eye opener as to what funders look for before supporting project here.

All the best with it!!

Monday, 04 March 2013 11:26

Crowdfunding Advice From the top 10% Fund Raisers

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We have recently asked a number of our successfully funded crowdfunding campaigners to comment on what they thought made their campaigns work while so many others don’t. Around 10% of the campaigns on StartMe gets funded successfully so far so needless to say we were very interested to hear more about what these guys did to be in the top 10% of campaigns.

We got a range of different answers, its needless to say. Many of them agreed that apart from putting allot of work into their campaigns, they made sure that people they knew started donating early. Nearly all of those interviewed said that showing early momentum was key. But not only early momentum surely? So what else then we asked. These are some of the key points that they mentioned

What is exciting about your project. Find a way to get someone to take the time to look at your project for starters. You need to make your project relevant to THEM. You may have a real passion for your business or project, but others probably don’t. At least, not initially. So go and get them hooked by offering benefits or rewards something new, something desirable, something fun. Crowd-funding has really locked into this idea.

Introduce a sense of humour. Raising funds for your business or project is serious business. Yes of course you want to show your serious side, but also be entertaining.

Make sure you ask. Be brave, be bold, be unapologetic. Don’t offer an easy way out, offer something in return. The amount most commonly donated is R200 - R500 on www.StartMe.co.za. People tend not to go for the smallest amounts.

Make it easy for other people to spread the word. For crowdfunding, getting people to get other people onto your project is key. So provide them with resources that they will be excited to share. Get posting, tweeting, emailing—the lot.

Its an interesting one, crowdfunding. And over the last few years it has both made a big impact on how entrepreneurs, bands, artists and others are funded. It has also certainly divided opinion on just how viable the model of crowdfunding is. One thing that few people are admitting is that crowdfunding can be really hard work. And – a couple of campaigns later – I’m a staunch believer that the most important part of this fund-yourself-golden-carrot is the crowd, not the funding.

A crowd funding campaign is a bit like a wedding cake; it’s all about layers, and if you leave it sitting in the freezer, it won’t get eaten. A successful campaign identifies and engages with its core audience, then moves out beyond it and eventually gathers enough speed of its own that it (you hope) becomes contagious. And secret to all of this really working, is the work that you as the project creator puts in. Over the last 7 months or so, the 7 campaigns which have been successfully funded on StartMe, had one thing in common. They all put an enormous amount of work in - and today they are better of for it.

Monday, 04 February 2013 15:05

Get Money Flowing to Your Crowdfunding Campaign

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So you have taken the plunge and added your crowdfunding project to StartMe. You've come up with a few great prizes, added video and images to your project and even thought carefully about the wording of your campaign. You now start waiting for the contributions to start flooding in and nothing happens. You’ve checked the campaign quite a few times and its definitely live there on the website, so what is the holdup? Why didn’t yours make it when you’ve heard people making thousands of Rands in their campaigns?

The truth is that it takes time and dedication, but more importantly, strategic planning to have a successful campaign.

To get you started, here are 5 key tips to get the money flowing in your crowdfunding campaign:

1. Build a dedicated fan base beforehand

I want you to be real with me: every time you speak to your fans via social media or your newsletter, is your dialogue consistently, “Retweet this,” “Buy this,” “Come to my show,” “Support me here,”? Me, me, me. - Make sure you are engaging with your fan base not just asking asking asking.

Few relationships based on take, take, take from one party ever succeed.

The key ingredient to a successful crowdfunding campaign is having a dedicated bunch of fans that will truly promote anything you’re doing — we’ve seen that happen in the recent Arch Reactor project. But if you think you can start building your mailing list the day before you launch your project, you’re wrong.

You need to build your list months before your campaign can really take off! With a dedicated fan base, you can create a buzz about your upcoming project and have a better chance of making it go viral.

Monday, 04 February 2013 15:01

Enhance Your Crowdfunding Campaign by Adding Video

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Creating an interesting video is a great way to introduce your crowdfunding campaign to the world, it’s very marketable and adding a bit of music can really inspire potential contributors to support your project. Let’s face it, you are really in competition with those on StartMe to attract the attention and contributions of visitors.

So where do you begin?

That’s a good question. Creating a video is not as difficult as you may think it is. There are so many resources available. Here is a look at 5 tools that can help you create dynamic videos to represent you:

CamStudio – This free program is a great screen capture program that will record your viewing area. Videos when complete can be uploaded easily to YouTube and embedded on your site.

Animoto – This free and easy to use video program allows you to use still images, text, video clips and music to create a custom video that represents you. Don’t worry about not being able to create a video because if you can create a slideshow then you can use Animoto with no problem. The free program limits you to a 30 second video.

Masher – This free tool allows you to create videos easily. They offer a lot of content that you can use or you can upload your own. Add text easily. It’s just that simple. When you’re finished get ready to share your video with the world.

One True Media – This is an easy to use online program where you can easily create slideshows and videos. Audio effects and video transitions make this a great program. Plus you can easily upload videos to your social media outlets.

Photobucket– This free program allows you to combine video clips, photos and more to create videos easily. Want to share it with your fans on social media? You can do that easily.

So why exactly did Seth Godin, the world’s most well-known marketer use crowdfunding for his latest book? That's the questions many are asking. And how did he manage to raise more than his $40,000 in just 3 hours?

Two separate questions really as the one are related to the benefits of crowdfunding and the other, well obviously, what can your crowdfunding campaign learn from him?

Lets first look at, apart from the money itself, how else we benefit from crowdfunding. Three of the most obvious benefits to crowdfunders are:

First of all it clearly helps you to understand how much demand there is for your idea. The more advanced your product is in its development the more accurate this feedback really becomes. By taking your offering directly to consumers through a crowdfunding platform, you have the opportunity to get feedback and learn what people think about your product. A great market validation opportunity really.

Secondly it helps you to test your marketing and get the message out there about your product or brand. If the world’s best marketers are now using crowdfunding to market their products then who are to argue? A Crowdfunding campaign is a real marketing opportunity for your business. Entrepreneurs are encouraged to use their campaign as a platform to post an unlimited amount of information about their project — this can include anything you think your audience would find relevant, including commercials, team pictures, and press mentions. SatrtMe provides logos and widgets that can be easily embedded into your website, blogs, and emails to drive traffic to your project.

Monday, 14 January 2013 11:25

Get Crowd-Funded in 2013

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2013 – is the year for crowdfunders. The media has given huge momentum to crowdfunding in 2012 and now is your opportunity to get your business or creative ideas funded on StartMe. Its also your opportunity to move away from excuses and get your ideas of the ground. – It’s the year for you to commit!

Whatever your idea may be at this point, it’s time to spend some serious energy on getting your project funded. Are you still finalising the idea, are you perhaps getting the information ready to present to funders, or are you ready to add your project to StartMe today. Move away from procrastination and create a plan with actionable dates to finalise and post your project, starting today.

Crowdfunding is opening up a unique source of finance to all, without the need for business plans or bank loans, consultants or committees. It’s a real opportunity for you realise the idea that you have been thinking about for so long now, but have not started as you thought you can probably not fund it.

In The 6 months since the StartMe website has been operational, we have already successfully funded 5 projects. That is five entrepreneurs who previously did not know where the money for their ideas are going to come from who now has raised enough to make a great start. You can be next!

We have been getting a great team of people together to support you and your campaign every step of the way, whether you need support with putting the campaign together, creating the right reward structure, getting the word out or moving on with your idea once you have successfully funded your project.

So click here and lets get started and let us know where we can help!
Monday, 14 January 2013 10:48

Boosting a Slow Crowdfunding Campaign

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So after the initial excitement of your project and attracting a few promising pledges to your campaign things starts to quiet down a bit. You don’t look at your campaign s often as you initially intended and start realising that maybe this crowdfunding thing is not as easy as I initially thought.

This is exactly the time when you should be doubling your efforts. You have after all been able to convince a few investors already. Some backers may be waiting to see if your project evolves and attract more interest before they take the leap with you. Now id the time to convince them that yours is a project that is worth their interest and support.

So what is it that you can do at this point? Do we just let a few more people know about the campaign and hope for the best? If you are serious about getting your idea of the ground then be creative in the way that you approach this. Running a business is not child’s play and neither is convincing others to back you with their own hard earned money. You showing commitment will make it easier for backers to buy in to your idea.

Here are a few ideas from our side and as mentioned below, be creative and find ways to stand out from the rest.

  • Understand your market – Do a bit more research to understand what people look at when they fund crowdfunding campaigns – look at all the blog articles exploring successful campaigns.

  • Time to add or change your video – If you have not done so yet, add a video abouth your project or change the one you have currently. Videos are there to inspire. Take a look at our blog article here on how to include great video content. -

  • Use Social networks – You are likely to already be part of social networks like Facebook and Twitter – be active here and communicate your project to everyone.

  • Web site – if you have a website, have you included the Startme logo on your site - have you communicated your project clearly on your how page so that those who come to your site and are interested can support your campaign?

  • Thursday, 03 January 2013 20:47

    Using a Completed Product as Crowdfunding Reward

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    The use of rewards to attract business funding or contributions to your crowdfunding campaign has long been a key part of the deal, were you ask for a contribution with the agreement that something else will be given in return. In recent months however we have seen an increase in the use of the actual product and variations of that to entice the contributor to make the kind of contribution that will support the entrepreneur to bring product to market.

    In other words entrepreneurs are using crowdfunding as a launch pad to introduce the product to the market. This is a great idea of course as the entrepreneur is getting a readymade shop window where the product is introduced. Not only is the product introduced but a type of market research is taking place where the entrepreneur quickly finds out if the product is going to be successful based on the popularity of the product on the crowdfunding platform.

    In a recently published book The Crowdfunding Bible by Scott Steinberg, CEO of consulting firm TechSavvy illustrates this well where he discusses some of the options available when creating your crowdfunding incentives.

    Scott sugests the follwoing options as crowdfunding rewards:

  • The product itself. A copy of the item in question—and, potentially, one sold for a limited time at a steep discount. Be sure to calculate any associated costs and figure them into your pricing structure and funding goals.

  • Monday, 17 December 2012 21:52

    Marketing Your Crowdfunding Campaign

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    Being proactive in spreading the word about your crowdfunding campaign is essential. In fact this process is great as a taster of what creating and marketing your business will be all about. You may have the best crowdfunding campaign in the world, if no one knows about it, it will remain a secret. Creating marketing campaign both on and offline is the next step. The more you put into it the better your chances of gaining the trust and respect from potential funders will be.

    As with everything, the outcome will depend on what you put into it. How far re you prepared to go to ensure you reach your funding goal? The reason why there are far more business failures than successes is the same reason there are far more unsuccessful crowdfunding campaigns in comparison with successful campaigns. It takes, planning, hard work, commitment, networking and a little bit of luck.

    How committed are you to this project?

    If you are prepared to do what it takes then read on.
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