SA Crowdfunding Blog

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!!

Published in SA Crowd Funding Blog
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.

Published in SA Crowd Funding Blog
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.

Published in SA Crowd Funding Blog
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.

Published in SA Crowd Funding Blog
Monday, 17 December 2012 21:52

Marketing Your Crowdfunding Campaign

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.
Published in SA Crowd Funding Blog
Monday, 05 November 2012 00:00

Crowdfunding Success Series: Window Farms

Window farming is a relatively new idea. It taps into the spirit of environmentalism and people's interest in eating healthier, more natural foods. A window farm is exactly what the name implies. It's a way of growing food right in your window. Window Farms the company produces devices that are designed to make window farming very easy.

Window Farms started out with a goal of $50,000. They ended up receiving over $250,000 from crowd funding.

Why It Worked

Published in SA Crowd Funding Blog
Monday, 05 November 2012 00:00

Crowdfunding Success Series: Wasteland 2

Wasteland 2, not too surprisingly, is a sequel to the video game Wasteland. The original is a very old game, dating back to 1988, when it was published by Electronic Arts. The videogame falls under the role-playing game category, one of the most popular videogame types in the world.

The man who served as the executive producer for the original Wasteland, Brian Fargo, owned the rights to the game, and decided to make it into a franchise. He started soliciting donations on Kickstarter to the tune of $900,000. In the end, he raised $2,933,252 to develop the Wasteland 2 project.

Part of the success story has to do with how the developers of Wasteland 2 decided to reward those who sent donations into the project. Wasteland 2 pledged to give five percent of the profits that they made back to Kickstarter. In addition to this, people who offered different levels of donations received different awards for doing so, giving people an immediate gratification incentive to participate in developing this project.

Why Did This Work?

Published in SA Crowd Funding Blog
Having the Olympics come to town is a big deal for any city. Jon Pack and Gary Hustwit want to get beyond the advertising, however, and to give people a deeper insight into what having the Olympics come to your city actually means. Their project involves going around and taking pictures of cities that have hosted the Olympics in the past and seeing how they look long after the games have ended, the medals have been handed out and the world turns its attention to the next Olympic Games.

The total project goal was set at $45,000. By the time funding ended in the summer of 2012, the pair had netted $66,162 to complete the project.

The project is an ambitious one. The book is designed to be approximately 200 pages in length and is slated for publication in March of 2013. There will be digital copies of the books distributed, as well, in limited numbers. The project will take the photographers around the world to photograph former Olympic sites.

Why It Worked
Published in SA Crowd Funding Blog
Righteous is a UK-based salad dressing company that successfully crowdfunded their advertising campaign using CrowdCube.com. The company produces salad dressings that are all natural and that are highly regarded for their quality. The founder of the business, Gem Misa, wanted to expand their sales overseas and to, of course, get the product into new markets.

In the end, the company managed to get £75,000 toward the effort, with 15% equity offered over the course of a month. The company's investment graph shows steadily increasing interest over the period that they were seeking funding, owing to several different factors. The total funding project was slated for 40 days and funding was completed in February of 2012.

Why It Worked
Published in SA Crowd Funding Blog
Monday, 05 November 2012 00:00

Crowdfunding Success Series: Penny Arcade

Penny Arcade is an Internet comic site that used crowdfunding to improve what it offers to its visitors. Like many other sites on the Internet, Penny Arcade had to convert to an advertiser funded model, which the creators were not quite happy with. Advertisements, though they can bring in good revenue, take away from what a site has to offer by cluttering the site up, distracting visitors and, in some cases, visitors actually end up resenting the advertisements. Further, when a site is funded by advertisements, it makes it difficult for the creators to allow people to create apps and other ways that people can interact with the site, as they may lose advertising revenue.

Penny Arcade wanted to change the way it works. To that end, they started a crowd funding project with a goal of $250,000 so that they could convert to an advertisement free site. In the end, they brought in $528,144 off the Kickstarter site.

The company set up funding goals that were somewhat like videogame goals in the way that they were arranged. At each assigned increment, a new feature was unlocked. For example, at the $900,000 funding level, the company released its work under the Creative Commons license. At the $999,999 level, Penny Arcade when online ad free. There are other goals that lie ahead, though they are tantalizingly listed with "???" on the project's page.

Published in SA Crowd Funding Blog
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