By Ellen Eldridge
Crowdfunding means leveraging your network
Supporting an artist’s fundraising campaign means buying it before it’s out (and sometimes before it’s created) for fans, but for entrepreneurs, a clear mission, an established, dedicated fan base as well as careful thought and research are all needed for successful crowdfunding.
According to CNNMoney Dec. 2012, an incredible 84 percent of the top 50 most-funded projects missed their target delivery dates, so fans investing in projects need to anticipate disappointment or properly vet an artist before investing in his or her project.
Robyn Jasko first funded a project by 356 percent in April 2012 to take her book “Homesweet Homegrown” on tour, and in May 2013 she funded by 6,285 percent a project to grow and bottle fully organic, non-GMO hot sauces using heirloom ingredients that she plants, grows, harvests and bottles. She says the most important contributions to her success involved research, setting reasonable and attainable goals.
“Before I did Kickstarter I did a lot of research on similar projects,” Jasko says. “I spent at least three weeks researching Kickstarter to apply knowledge to my project.”
Launching a project after weeks or even months of preparation stresses artists Jasko says.
“The second you hit that launch button, everything changes,” she says. “You become extremely emotional.”
Programs like Kickstarter and GoFundMe take the spirit of independent art and run with it, in what seems like the perfect solution for bands, authors and all entrepreneurs with great ideas but no money.
The fact is that even with a great idea, a talented artist has to connect and engage with its fan base to reap rewards.
Paul Durham’s band, Black Lab, released Your Body Above Me on Geffen Records in 1998 before the label fizzled out as the music industry changed dramatically. Durham says he took his cue from the success of Amanda Palmer, a musician who was one of only eight to deliver her project on time according to CNNMoney, when he decided to invest $50,000 dollars in recording an album, and asked his fans to fund the costs involved with mixing, mastering, manufacturing and marketing the release.
“A lot of people are doing things they haven’t done before and they hit obstacles,” Durham says, and he admits that he is less likely to back a project of musicians trying to fund recording than investing in finishing a completed album. “Going into the studio is a more risky investment,” he says.
What kinds of programs and which artists are most likely to succeed with crowdfunding?
Durham says a lot of people buy Black Lab albums from iTunes and the band’s website, so he knew he had an established fan base as did Palmer. His experience with major labels allowed him to understand the time-table for mixing, manufacturing and distributing the new album, A Raven Has My Heart, so he knew he wouldn’t let fans down by not meeting target delivery dates.
As a platform that reached $1 billion pledges in 2014, Kickstarter can help projects it approves of as well.
“In the first campaign, they put us in a newsletter as a project and we hit $3,200 dollars that same day,” Jasko says.
During her hot sauce project campaign, Jasko says her project met all the criteria for Kickstarter success including following guidelines and best practices (Kickstarter offers a “school” for artists to understand how best to create and promote projects).
Though she had never spoken with anyone at Kickstarter, Jasko says her hot sauce project was boosted by Kickstarter’s decision to feature her project on its homepage.
“The success was really launched by Kickstarter,” Jasko says, though her diligent research and forethought included strategies for reaching out to local bloggers and networks in the organic and homegrown food industry.
Secrets to crowdfunding success
With a success rate of just under 44 percent, no entrepreneur should think crowdfunding is an easy endeavor. While 10 percent of projects never receive a single pledge, 80 percent of those that reach 20 percent of their goal reach full funding.
Durham says Kickstarter means making the best use of an existing network and fan base. “My network is in place,” he says. “For me, Kickstarter is a way to leverage your network.”
He told his fans that the funding of the new album is all-or-nothing and that “The thing that will make a difference between success and failure is your help.”
Other secrets to success that Jasko and Durham agree on include creating a concise message and great rewards.
In the research phase, Jasko reached out to her network and sent review copies of “Homesweet Homegrown” to magazines and others in the industry, while Durham polled his hardcore fans.
“Originally, I had three times as much text; I need to be more disciplined and make writing tight,” Durham says, adding that price point feedback also helped him hone his project.
Stretch goals become crucial once the initial goal is met because reaching the goal means “some of the specialness of the situation goes out of the balloon,” Durham says.
The new Black Lab album was successfully funded by 259 percent, and it included stretch goals of exclusive unreleased demos and an acoustic performance sent digitally for $30,000 and $35,000 respectively. At $50,000, backers who ordered a physical product earned the stretch goal of a laminated all-access pass to the 1998 tour. Durham says rewards like this often encourage backers of digital products to increase to a physical product tier. The final stretch goal reached for Black Lab’s A Raven Has My Heart is an 8-song U-stream concert where backers can make song requests.
Clearly, success is quite possible for entrepreneurs with clear visions for their projects, especially those who have already invested in their projects financially and through doing research. Find yourself, define your mission and hit your target audience to reap the rewards from crowdfunding.