“Where am I going to get money to launch my brilliant idea?”
It’s a question many entrepreneurs ask when they’re looking for a home for their startup, and it’s one of the most critical aspects of choosing an incubator or accelerator.
There are many avenues towards raising funds as a startup. Some people call up their rich uncle and get a big check written, others scrap and claw for little amounts from several sources, and others already know investors or companies willing to give them the money to get going. Those are the great options of course, but in the modern world of internet connectivity there is a funding option available online to those not lucky enough to have a wealthy network: crowd funding.
Crowd funding is an excellent resource for entrepreneurs and startups when the only thing standing between them and success is funding. Several of our EvoNexus incubator companies have taken advantage of this particular avenue and done so successfully. For example, Hush – creators of the world’s first smart earplugs – had a target of $100k and raised just shy of $600k with their Kickstarter campaign. Here’s what their CEO Daniel Lee had to say about his Kickstarter experience as a member of EvoNexus:
“Coming out of the Kickstarter campaign, I think the most influential factor to Hush’s success was having good content. Clearly presenting a well-defined problem with a well-defined solution was critical to having a campaign that people would resonate with, support, and share. That is where the value of being in a community like EvoNexus really shined through. Being surrounded by smart people who would eagerly serve as a sounding board to mold and shape our product’s pitch was invaluable to creating a powerful pitch that made people put down their money to support the vision.
“Also, being in San Diego’s top accelerator was the angle that allowed us secured our first few key media coverage, which was very helpful in getting our campaign off to the right start!”
Ryan Tseng from Warehouse Innovations, creators of The Kitchen Safe, suggested that companies don’t reinvent the wheel. He noted that the most critical aspects from what he’s seen are: “Big first day, big mailing list of people who want to buy, coordinate press for launch day, good video, and a carefully considered marketing message.” He also acknowledged that he didn’t do all these things for the company’s first Kickstarter, but that he will certainly be implementing these tips in his second campaign, which is only a few weeks away.
Most people we’ve talked to about Kickstarter all point to that first day as critical. Crowd funding campaigns are very momentum dependent and getting off to a fast start can make or break most campaigns and Leo Trottier, founder of CleverPet, echoed these sentiments:
“We tried our best to generate enthusiasm within our local network prior to launching the campaign. That allowed us to generate a lot of traffic on our first day. Without that, we probably would’ve failed.”
Leo also added great insight into the various ways to do a Kickstarter:
“There are 2 ways you can do a Kickstarter. You can use it once your product is launched and then it functions as a marketing campaign in a sense. That’s the probably the best way to use it. However, you can also use it if you’re making something new or different and want to prove people are interested in what you’re doing. That’s what we did, and it functioned as a pre-product Kickstarter campaign. The purpose it served for us was to validate that we had a sensible idea and that a lot of people liked what we were doing. It also allowed us to begin to develop our brand.”
Finally, when asked what is the best advice he’d give to people looking to start their own Kickstarter campaign Leo offered this tidbit:
“Talk to people that have very recently tried Kickstarter campaigns, both successfully and unsuccessfully. The landscape of crowd funding is changing very quickly, so while there are some concepts that have stayed the same there are a lot of things that have changed recently.
“Talk to people that ALMOST reached their goal. They were competent enough to get to a particular amount, but because they failed they probably spent a lot of time contemplating what they could’ve done differently. Definitely talk to people that had a wide range of outcomes. You can read 20 articles on the internet about how to do a campaign, but it’s better just to talk to people that aren’t trying to sell you something.”
Each of these entrepreneurs were part of successful Kickstarter campaigns and they share a lot of the same ideas on what it takes to have a successful campaign. However, they each also acknowledged that there’s no one way to be successful crowd funding, and that every company and their situation is slightly different.