SA Crowdfunding Blog

StartMe Team

StartMe Team

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!!

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 10:48

Boosting a Slow Crowdfunding Campaign

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?

  • 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

    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.
    As crowdfunding is evolving into a real opportunity for entrepreneurs to get their businesses of the ground and we are seeing an enormous amount of interest from both the media as well as entrepreneurs themselves, crowdfunding certainly has not been without its criticism.

    Interesting then that a recent study by South African crowdfunding platform StartMe have found a much more clearer picture of what leads to crowdfunding success. What seems to be particularly important for would-be recipients of crowdfunding is for them to understand social media and the way social-technology users think. We must not forget that crowdfunding in itself is very much a technology based solution, so those involved are inherently driven by and accessible through technology. Today of course know that a key part of technology and how we use it to communicate is related to social media.

    First, crowdfunders seem to understand the high risk of putting money into a new idea, the survey shows. They're well aware that most small businesses fail. As a result, they spread their investments. Moreover, many take due-diligence seriously, and they limit their investments to amounts they can afford to lose. In other words, they may be inexperienced, but they're not stupid.

    Second, what seems to be happening is that the "social media culture," in which people feel close to and want to be part of brands they like, is extending into social investing. StartMe cofounder Ben Botes says two-thirds of investors surveyed expressed the need to feel some emotional connection with a target company. People are investing into ideas that mean something to them.
    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

    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?

    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
    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
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