You’ve got a great idea. All you need to do is pay for it. Better yet, get other people to pay for it. Here’s how to crowdfund your project in six steps.
Brian Davis was working in marketing and sales when he came up with his first product, the Fix It Stick, a portable multitool for bikes. He sketched out the idea and took it to the owner of a local fix-it shop to ask if he would build a prototype. After fine-tuning the design with a faculty member from a local community college, Davis set up a Kickstarter page. In 30 days he raised more than R470 000. Since then he has successfully launched two more products – a hydration pack that doubles as a water bottle and a protective wind mask for cyclists, which debuted in January. Here are a few of the lessons he’s learnt about the mysterious and potentially lucrative world of crowdfunding.
Finish the product first
Before you launch the campaign, be ready for production. That way you’ll never miss a deadline for shipping to your backers. For my first Fix It Stick launch, I ordered 100 sets in advance for press samples and testing, then made the rest to order once the campaign was complete.
Set the right goal
In many cases, the crowdfund goal is arbitrary, as long as you hit the minimum amount needed to create your product or you don’t mind investing some of your own money, like I did. For BackBottle, the hydration pack, I needed R200 000 to build a mould for manufacturing. I set my goal at R100 000, and by the end of the campaign I’d raised R300 000. People love seeing that you overshot your goal. Every time I’ve started a new project since that first one, I’ve set my campaign goal lower than before. People are impressed when they see that you overshot your goal by 300 per cent.
Have a detailed plan
I knew exactly what I was going to do at each stage of the process, whether it was before or after the money was raised. I wanted to create social-media accounts, shoot photos and videos, prewrite press releases and Facebook posts. Nothing is too small to plan out, because otherwise you risk missing it entirely.
Don’t forget shipping
It’s easy to overlook packaging and shipping costs, which can get very expensive very quickly. You need to account for those early in the process, or it’s easy to go broke.
Embrace the bloggers
I didn’t even try to get coverage from major media outlets right away. I started with smaller bloggers who specialised in cycling, sending them information and samples. (Everyone loves a sample.) Once the product got attention online from that group, it was a lot easier to get press from bigger publications.
Keep your job
As long as you have a great product, the money-raising campaign is the easiest part of the process. But even if you are wildly successful at crowdfunding, don’t expect it to turn into a career. At least not at first. It’s a slow process to make money off the idea. If I were advising me three years ago, I would say to do everything you can to not quit your job. – As told to Lara Sorokanich
This article was originally published in the April 2016 issue of Popular Mechanics magazine.