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Learning from our Crowdfunding experience

July 25, 2018

 

Our campaign was to build the next generation of our network rendering software. It would allow combining computer power from the cloud, from friends and from a local network. Something we knew people in the industry wanted.

 

But, despite a lot of research, networking and careful planning we missed our campaign target by a huge margin, when the campaign finished, we had only 3% of the target. We thought we had a pretty good plan, a great video, great rewards, an engaged user base and campaign page which we tested with some of our users before launch and the response was all good. So what happened?

 

First, we did our research

 

When we sat down to work on our crowdfunding campaign, it seemed pretty inevitable that we had a good chance to be successful. We had a growing list of users, support from influencers, a modest budget for spending on paid ads and even data from a survey indicating that about 20-25% of our users were a 'yes' in response to our direct question of "would you support us in a crowdfunding campaign?".

 

All of this boosted our confidence, so we committed to build and launch the campaign. To hone our strategy further, we spent a lot of time looking at other campaigns on Indiegogo and kickstarter. We made sure we looked at a lot of failed campaigns to get at least an intuitive feeling for why campaigns fail. We knew the dangers of looking at too many successful campaigns. There is a strong temptation to imitate success, but this is a flawed approach because often there are other factors than their campaign page, video and perks that you don't see which ultimately make a campaign successful. More on this later though.

 

We developed a strategy

 

With our research done we decided on our strategy, which was fairly straightforward. Realising that we had limited reach on our own, we decided to seek support of key influencers. We were fortunate enough to have already made friends with influencers in the space. This allowed us to reach their much larger audiences on good will alone. They also kindly donated some of their own premium content to package with our campaign rewards (Special thanks to Oliver Villar from Blendtuts and Aidy Burrows and Gleb Alexandrov for their contributions!).

 

This really helped since our campaign goal was to build software that would be released for free,  which meant the main output of the campaign couldn't be a reward for backing our campaign, though we did have a reward giving early access to the software. This was quite unlike other campaigns on Indiegogo in which the project was to build a product that was for sale and the rewards were pretty much to get the  product they were raising funds for at a discount or with a package deal that wouldn't be available after the funding campaign. 

 

Our strategy included spending money on advertising the campaign, again we were very targeted. We'd already learned from experimenting with paid advertising on Facebook, twitter and so on; paid ad platforms had always performed worse than content marketing. Simply creating engaging material and then posting that content for free on the forums and websites our users go to was far more effective than any paid advertising we tried.

 

So the money we did spend went to influencers we didn't already know (thanks to Steve from CG Geek who was one such influencer :D) and websites like www.blendernation.com.

As an aside, to give you an idea of how much more effective posting our own content on blendernation.com was compared to spending about $200 on facebook advertising. The same content on blendernation.com would on average result in about 100-150 new signups on our website. Facebook produced about 100,000 views....and about 20-30 signups or thereabouts. The majority of the results of our paid ads were driving people from facebook.... to another page on facebook and not to our website. So we stopped doing that pretty quickly. 

 

A Crucial Lesson on Conversion Rates

 

And this leads nicely into the main point of this article, conversion rates. All of the large platforms, be they social media orientated, resources sharing or, in this case, crowdfunding likely have conversion rates that are small, usually 5% and lower. What I mean by that is this, for every 100 people a facebook add or campaign page is shown to; five will take action, everyone else does nothing.

 

This is likely the number one reason our campaign failed on Indiegogo. Can I also make it clear, this isn't Indiegogo's fault necessarily. The blame, rests solely with us on this one. It was the one factor that we didn't get a proper understanding on prior to launch. Had we known what our conversion rates would have been prior to launching, we'd have delayed the campaign until we were sure we had enough reach. Its likely we were lacking in reach by a factor of 50. We spent too much time on guessing how the campaign page should look, on the video script, what perks to offer. Though this does matter, not having enough people see it was enough to cause failure and would have been easy enough to factor into our decision making.

 

So, just know your conversion rate before you start planning, use it to base your figures on how many people you will need to reach in order to reach your goal (oh, you'll need to figure on an average backing level as well, apparently $20 is a good estimate, but be warned, one level does not work for all campaigns!). Then you should be totally good to start your own campaign right?

 

No.

 

Figuring out conversion rates can be hard

 

One thing that really complicates conversion rate tracking is that at each point along the journey - from getting a link in an e-mail or seeing an ad online - if there is any way a user can decide not to continue, some won't, and its usually the majority that won't. For example, our shout out e-mail to our users about the campaign.