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Cheat Sheet
- Most creators I speak to on some level think of Kickstarter and Indiegogo as a piggy bank… their source of the money they need to develop and launch their project. This is false.
- See those $500,000-$1,000,000+ campaigns? You need $20,000-$50,000 in cash flow for advertising to have a hope these days. Kickstarter and Indiegogo are too competitive.
- Turning even $50k into $500k IS a good move of course, but you need the $50k to start but finding the cash flow necessary to launch a Crowdfunding Campaign can feel daunting.
- Where do you find $50k? Either go out and ask your network yourself or find someone who is a connector and likes raising money and get them on your side.
- Find out how to do both in this episode!
About this Episode
Have you ever gotten stuck on a critical, 30 minute, task, procrastinating until 2 am the night before it was due, when fatigue forced you to complete, passing out at sunrise in a heap of emotional exhaustion?
Have you ever effortlessly executed on a brilliant brainwave, tirelessly toiling for hours that seemed like minutes, not wanting to get up, even to go to the bathroom, or to top up your coffee cup?
What’s the difference?
Why was one task hard and stressful and the other a blissful adventure?
With one task you were operating in your Zone of Genius and got into Flow and the other… you... weren’t…
It turns out that each of us has a particular zone of genius. Certain tasks that light us up.
Today we are talking with Brad Hart of MakeMoreMarbles.com.
Brad is a people person.
A connector. That’s HIS Zone.
He gets fired up meeting people and trying to add value to their lives.
He plays the long game and figures that if he adds enough value to enough people, eventually an interesting opportunity will come up. And he has done quite well for himself in the process.
And Brad has no problems raising money.
He did quite well in real estate and started a hedge fund after about 500 conversations with friends, relatives, and associates.
Those careers had elements of his Zone of Genius, some of the time, which is probably why he had the success he had.
Now, Brad works as a consultant and connector.
He is an expert at figuring out what it is your business needs, and then hooking you up with the person or company that can fulfil them.
That could be talent, or it could be an investment.
If you are a creator, flow probably involves thinking of new ideas, synthesising knowledge, and tinkering.
It probably does NOT involve spreadsheets and marketing execution plans, and it may not be around raising money.
The key to operating a high performing business is to divide the critical tasks out and finding people who will be operating within THEIR Zone of Genius when performing them.
This sounds easy and for some, like Brad, it is.
But if you have ever struggled with hiring or partnering, then I’d suggest you give this framework a try.
Resources Mentioned
Questions to ask google doc
Cheat Sheet
- Crowdfunding, while new, has evolved a TON in the last six years
- There is too much competition and repeat backers are too savvy to simply throw up a page and hope it does well.
- You’ve heard me say this before but rescuing a flailing campaign is possible... but not likely. Your pre-launch plan is critical. Build your list or you are likely to fail.
- Still don’t believe me? Listen to Roy… he’s raised over $75 million!
About This Episode
I love having industry insiders on the show.
I learn as much from these talks as you guys do, and it is nice to hear other people say the same things… like that you NEED an email list beforehand… but say it in slightly different ways.
It is also fun to watch what a guy like today’s guest, Roy Morejon, is up to.
Roy has been in the digital marketing space for a while and chanced into crowdfunding when a failing campaign came to him for help.
He was able to use his extensive PR contacts to rescue that campaign, and in the processes found his new calling… advising and managing Crowdfunding campaigns.
Since then, he has raised over $75 million for his clients and has taken the business of advising campaigns to incredible levels:
- He bought an industrial design firm to be able to help design and build client products and in-house products
- He took over The Art of the Kickstart podcast.
- And he now advises 80% of his clients AFTER the campaign and helps them transition from a campaign to a business.
I have been thinking for a while how a crowdfunding campaign is the start of a business, and how I can help my clients make the transition.
I believe that if you start thinking of Crowdfunding as the start of a business, and not a way to make some fast money, you will do a lot better.
Resources Mentioned
Cheat Sheet
- If you have a list, a certain percentage will be your True Fans. It is crucial you learn how to identify them. They genuinely want to help you succeed. Help them help you!
- One way to identify them is through a private, application required, Facebook group. If someone is willing to take the time to fill out an application then they are probably willing to help you out.
- Size doesn’t matter… it’s engagement. Talk directly with your fans. Give them insider access and perks (Hint… it is fun! They like you and want to help.)
- Leverage technologies like UpViral and ThunderClap to increase social sharing and increase sales. Reward the top sharers.
About This Episode
Two weeks ago, Austin Netzley talked about the famous “1000 True Fans” article from Kevin Kelly.
The essence of 1000 True Fans is that if you cultivate a relatively small tribe of people who love your work and are willing to pay for it, you can sustain a career in almost any field.
You can even fund a Crowdfunding Campaign.
But the key is learning how to identify them and how to engage with them.
Kevin Kelly wrote 1000 True Fans in 2008 before Kickstarter and Indiegogo were founded.
And in that essay, he even mentions that building and maintaining a direct relationship with your fans can be a bit daunting.
But that was 8 years ago and technology has changed.
We have Facebook Groups...
UpViral...
Thunderclap…
Typeform...
...and a host of tools that happen to make speaking directly to your 1000 True fans really easy.
In this episode, Nathan Chan and I talk about the “Facebook Insider Group”.
Nathan is the founder of Foundr Magazine and recently finished up a Kickstarter Campaign for a coffee table book for entrepreneurs.
While that campaign was going on, he gave me a behind the scenes look at how it works and it is super cool!
It is the most concrete and concise example of implementing 1000 True Fan Theory that I have ever seen.
And it works.
After seeing Nathan use it successfully with his Foundr Campaign, I implemented it for the JamStack campaign and it has been a huge success.
- 474 Members
- Great feedback and social engagement
- And we raised 50% of our goal in 4 hours directly from that group!
I will be using Insider Groups on all of my campaigns moving forward and you should too.
Special Bonus:
In this episode, Nathan and I go over some key MISTAKES we both made in our most recent campaigns that cost us a lot of money.
Here’s the thing.
Experienced entrepreneurs make mistakes all the time.
If this is your first campaign then you will too.
Accept this NOW, and go have some fun screwing up and learning from it!
But save yourself some headache (and make a bunch of extra money) by learning from our mistakes.
Resources Mentioned
Cheat Sheet
- Don’t build things people don’t want to buy. How do you do that? Pre-selling! “Wallet votes” are worth 1000x more than an encouraging word.
- Talk to as many people as you can, but only take advice from your target audience. Your 95-year-old grandmother may not be the best person to speak to about your new tech product.
- Take massive action on the ONE thing directly in front of you. Don’t worry about the next step.
- If you decide to write a book, what is the ONE action you should be focused on? Listen to find out!
About this Episode
I am going to write a book.
It is December 2016 and I am preparing to write out my goals for 2017.
So there.
I said it.
I am going to write a book.
I have big plans for 2017 but I am going to find the time and here is why…
It doesn’t have to be hard.
In fact, today’s guest, Chandler Bolt, wrote 3 books in 6 months that all became best sellers on Amazon without any previous experience.
“I’m a BIG believer in looking at what is front of you and giving it your all”
He then went on to found self-publishingschool.com to teach others how to publish a book in 90 days.
When he got started, Chandler pre-sold 44 spots for over $80,000 without having a single piece of content written.
He then let his audience dictate what he would produce next and built the course.
This conversation reminded me that marketing fundamentals are marketing fundamentals and business startups are all very similar, with founders and creators experiencing similar psychological hang-ups regardless of industry
These fundamentals apply to Crowdfunding and Book Launches and physical and info product launches.
This episode is PACKED FULL of strategies and tactics you can use for Crowdfunding.
Like Chandler says, tactics change with time but principles and strategy are timeless.
I think I am going to write a book on that...
Resources Mentioned
Cheat Sheet
- Want to position yourself as an expert in your market? Write a book.
- Not sure if you are qualified to write a book? Write a book anyway.
- Those of us who consume vast amounts of content in order to better ourselves often measure ourselves against the Titans in our field, and as a result, don’t give ourselves permission to write a book or don’t feel we are ready. Get over it and write a book.
- But if you are taking the time to listen to podcasts (like this one) and trying to better yourself, you are probably an expert on something. As long as you are one or two steps ahead of someone who wants to be where you are you have something to offer the world. Write a book on that!
- Worried about your writing style? There are people out there who can help you craft, edit, publish, and market your book. So no excuses! Write a book.
About This Episode
In last week's episode with Jon Bowes, Jon discussed his strategy to take successful ideas from one industry that is being underutilised in another.
In this episode, I am taking that advice!
Austin Netzley is a book launch expert.
With his 561 step book launch plan, he has the system dialled in and helped almost 200 authors launch books and build businesses, including real estate expert Kevin Ward…
...and the legendary self-help pioneer Brian Tracy,
Instead of crowdfunding, he launches on Amazon. But the parallels in book launches and Crowdfunding are fascinating!
Yes… you have to build your audience!
Like in Crowdfunding, email list SIZE doesn’t matter.
You want passionate engagement and a growth.
And you have to give a LOT of value to that list before asking for anything in return.
There is no use in an email list of 100,000 people and no one opens up your emails.
Like a Crowdfunding launch, Austin uses countdown timers to build anticipation for the book launch.
But the REAL benefit is taking that person who reads your book and helping them take the next step, which for a consultant may be a multiple five-figure consulting contract.
This is an area where I, and most crowdfunding campaigns, fall short.
Your launch is not the end game.
It is the beginning of a business.
Here’s my big takeaway.
The next evolution of MY business is to help transition my crowdfunding clients from the launch into an actual business.
Resources mentioned
Cheat Sheet
- There are really two campaigns going on in any launch. The first is to your audience -- you built your audience, right? The second is to affiliates, press, and influencers.
- Not sure how to position or sell your project idea? Look to different industries for examples and avoid “group think”.
- Experiment with value stacking. How can you create “no brainer” deals if your backers buy more from you?
About This Episode
Every once in awhile you have a conversation that tweaks your brain.
Gets you to think differently…
And then sends your mind RACING.
For me, this conversation with fellow Canadian, Jon Bowes, is one of them.
Jon Bowes is a master when it comes to product positioning, price perception, and copywriting.
Jon writes the words and crafts offers to help his clients make more sales, create repeat customers, and have those customers come back more and more often.
He has worked with Pat Flynn, Russell Brunson, and other top online marketers. Like a crowdfunding consultant, his results aren’t based on warm and fuzzies, but measured in cold, hard cash.
Some copywriters like to stick to one niche, for example, weight loss and dieting. That enables them to really know their target audience to write directly to them.
But Jon likes to take the Jay Abraham approach and work with as many different markets as possible. This is so he can avoid “groupthink” and import great ideas from one industry that are being underused or ignored in others.
That’s what he did while helping the Filippo Loreti Kickstarter Campaign become the most funded timepiece project in crowdfunding history.
John imported a common internet marketing concept, Value Stacking, into this campaign.
Value stacking is where you keep adding bonuses for larger and larger purchases.
For example, in internet marketing, affiliates will often give free products in exchange for purchasing through their affiliate link.
This strategy had not been used effectively in Crowdfunding to date.
But Jon helped the Filippa Loreti team implement it and so far they have raised over €1.3 million in 15 days.
Resources Mentioned
Cheat Sheet
- Equity Crowdfunding and Rewards Crowdfunding are very different, but also very similar. The preparation is different, what you are selling is different, but the need to build an audience and speak effectively to that audience is identical.
- The JOBS Act (in the US), in essence, allows you to “advertise” when raising money for small companies. You were not allowed to do this before.
- Public offerings (think IPO) are super expensive and private raises, (like Angel and Venture Capital) are inefficient because they are largely dependent on luck… who is within your network, what neighborhood you grew up in, etc.
- Risks are different for Equity and Rewards based Crowdfunding. Equity crowdfunding you are taking on investors, and all that comes with that. Rewards-based crowdfunding there is very little risk so long as you make a strong attempt at completing the project.
- However, if you spend your rewards campaign raise on strippers and Lamborghinis then you are committing fraud and could be investigated and thrown in jail. Luckily this is EXTREMELY rare.
About This Episode
If you thought Rewards-Based Crowdfunding was a new industry, wait until you check out the Equity Crowdfunding Industry!
We have talked about Equity Crowdfunding once before, but this episode we are going to take a look at the legal liability of Equity Crowdfunding, and also touch on Rewards Liability as well.
And it is an especially important episode as Indiegogo JUST started offering to support Equity Crowdfunding Campaigns.
I hate to jump the gun and cry “Game Changer!” but frankly Indiegogo is further cementing its role as the “anything goes” crowdfunding platform.
That being said, to start you on your legal journey I have brought Mark Roderick on the show.
Mark is a lawyer that has been helping entrepreneurs raise money for years.
When he saw the JOBS Act on the horizon, Mark saw an incredible opportunity to help small businesses.
If you haven’t done it before, raising money is a bit of a pain.
You either have to have millions of dollars to IPO, or you have to know the right people.
With Equity Crowdfunding you can sell shares to anyone all over the world over the internet.
Equity Crowdfunding isn’t as easy as Rewards Crowdfunding.
With Equity Crowdfunding you have to have your paperwork in order.
Accounting, corporate governance, and business plan have to be all top notch.
...And then you have to do the same work as a regular campaign building an audience and putting together your pitch.
Generally, this means that you are looking to raise larger sums of money.
And for some businesses Equity Crowdfunding is the way to go!
For a legal conversation, the discussion is surprisingly entertaining. I promise you will learn something that will aid you in your journey.
Resources Mentioned
Circle up - Consumer Products Equity Crowdfunding
RealCrowd - Real Estate Crowdfunding
SPECIAL BEHIND THE SCENES EPISODE!!
If you want to hear all the gory behind the scenes details of a successful crowdfunding campaign, then you HAVE to listen to this episode.
In this episode, I am speaking with one of my clients, Chris Predergast of JamStack.
JamStack is the World’s First Attachable Electrical Guitar Amplifier. If you play electric guitar, then you are probably freaking out right now because you can guess what this thing does…
If you aren’t, you’ve probably seen acoustic guitars at house parties or around a campfire before…
The JamStack makes your electric guitar as portable as your acoustic guitar.
I am super excited about this product, but enough about that.
Chris and I are in the MIDDLE of the pre-launch campaign as of publication.
The actual launch is happening around November 21, 2016...
We are just waiting for Kickstarter to approve our project.
“But Khierstyn, if you haven’t launched, how do you know the campaign will be successful?
Because I have been a part of and studied so many campaigns, that there is basically no WAY this campaign can fail.
Although we don’t know how well it will do, the responses we’ve received to it so far put little doubt in my mind that we will hit our initial goal.
The product is great and fills a strong need.
The founder is incredible.
The audience is SUPER passionate.
And we are building the audience the RIGHT way.
In this episode, we go over pretty much EVERY DETAIL that’s required to build a list before you launch your campaign.
You have heard a lot of the information before, but the discussion has never been so specific because the conversations happen months after the campaign ends.
We go over…
- Ad spend
- Ad strategy
- Email strategy
- Facebook group strategy
- Influencer pitching
- *BONUS* special “Insider’s Group” strategy that I learned from a friend and am trying out for the first time and OMG it is unbelievable!
I’m adding this episode to my “required listening” page, it’s that important.
Over the past weekend, I received some news that a great mentor to me (and many) had passed away.
This episode isn't necessarily about Crowdfunding, but it emphasizes a few key things that Andrew taught me that has made me who I am today.
Not only as an entrepreneur, but as a person.
Cheat Sheet
- Do your research! Know what to expect and plan ahead. Your campaign will likely be delayed as it is.
- When launching, reach out to everyone you know with a personal note, not a generic “copy paste” message. The personal touch goes a long way to motivating people to help you.
- The personal touch applies to approaching influencers as well. The people you probably want to reach likely get dozens of promotional requests per month.
- Even with the personal touch, pitching influencers is a numbers game. Remember, you only need a couple of key endorsements out of hundreds of possibilities to get the social proof required to take your launch to the next level.
- It is crucial that your endorsements are relevant. While a random celebrity endorsement may feel nice, you want people who have the audience you want to sell to.
About This Episode
Jake Heilbrunn thought college was going to be the time of his life.
That’s what we are all told, right?
“I expected I would work hard and play hard.”
But early into his first semester he developed a chronic skin condition and ultimately developed severe anxiety and depression.
Something was wrong.
What Jake discovered was that his anxiety came from pursuing the life others wanted from him and wasn’t living life for himself.
So he left school after that first semester, left his cell phone at home, and took a one-way ticket to Guatemala to teach English.
While spending four months in Guatemala, he decided he found the relief from the depression and anxiety that had plagued him that first semester at school.
He realized he wanted to help inspire other college students to pursue life for themselves as well by telling his story.
After exhaustive research, Jake chose to write a book, self-publish, and raise money on Kickstarter.
Jake planned months in advance for his launch.
He made a budget and set realistic expectations.
He recruited friends to help him with copywriting and video production.
Se started writing a blog and got email subscribers.
He wrote guest posts
He even woke up at 2am the day of the campaign launch in order to send out personalized messages to 500 people on Facebook.
He wrote those messages so quickly that Facebook thought he was a bot and almost banned his account!
And he hit his funding goal.
There are a ton of practical crowdfunding gems in this episode and a healthy dose of inspiration.
But I really want you to pay attention at the point he talks about reaching out for endorsements.
By being genuine, reaching out personally to relevant thought leaders, he was able to secure some pretty big names...
He even got the one and only Jack Canfield of Chicken Soup For The Soul fame!
That story is heartwarming and unbelievably instructive.
And Jake did it all without a professional team like I use during my launches.
Don’t be fooled by the modest raise.
Launching a book is a lot different from launching a tech product.
Jake is a future rockstar. I guarantee you will be hearing from him again in the future.
Resources Mentioned
Off The Beaten Trail Kickstarter Page
Off The Beaten Trail on Amazon
The Disturbing Truth About Anxiety and Depression in College
Are you wondering what it takes to launch your project on Kickstarter and Indiegogo?
How is it that I raised $1.2 million in the last year while training for and completing a Half Ironman?
The answer may surprise you (and not at all flattering)….
Sheer terror.
Terror and threat of public ridicule.
As a Crowdfunding advisor, my results are public. The campaign succeeds or it fails and it is 100% on me.
Same goes for your launch.
When I get hired my ass is on the line.
If I don’t have a successful campaign then I am not much of a Crowdfunding advisor, am I?
But here’s the thing…
I have learned how my brain works and how to motivate myself through the utter lows that come with entrepreneurship.
If I put my neck on the line, then I get things done.
If I don’t then I end up sloppy and depressed on the couch covered in Cheetos (nom nom).
Do you know how to motivate yourself? If you do, then you are 95% of the way to the finish line!
If you don’t, then I might suggest figuring that out as Step 1.
In this episode, my great friend and business partner, Jay Wong, is interviewing ME!
We dive into mental models and setting deadlines.
We talk about how my very first campaign was an utter failure, raising $17k, and how we were able to turn around and raise $500k with the same product, just by changing our strategy and tactics.
And we go over the most important things I have learned, like…
- How to give yourself a 90% chance of hitting your funding goal...
- How to get featured in the Kickstarter and Indiegogo Featured Campaign newsletters.
- And why you shouldn’t try to “game” the system. (Listed to find out what that means!)
I want to show you there is no magic to what I do. It takes work. And for me, I use fear to drive me rather than block me.
What is going to drive you to hit your funding goals?
Resources Mentioned
Cheat Sheet
- Burnout is inevitable if you try to do everything yourself. When you start to feel overwhelmed, that is when you should start outsourcing.
- Start small, with discrete, one-off tasks, that you could do, but someone else could do a lot better. For example, if you aren’t a graphic designer, don’t mess around in photoshop!
- As you get used to outsourcing tiny projects, your confidence in other people and their abilities will grow.
- Never settle for less than awesome. If you fail to delegate a task that could be better done by a specialist and instead do it yourself, you are settling for less. Settling is the path to mediocrity.
- An Entrepreneur is someone who builds a team to solve a problem. A solopreneur is someone who tries to do it all themselves. Which do you want to be?
About this Episode
If you have been preparing for your Kickstarter or Indiegogo campaign then you are probably finding out just how much stuff you have to do:
- Build an audience
- Source manufacturing
- Build a website
- Logos
- Copywriting
- Talk to potential customers
- Iterate
- Pay your bills in the meantime
- Patents
- Sleep
- Date night with your significant other
- Etc...
Oh yeah! And design your product!
And if you are like most of the people I talk to, you are probably a rookie in most, if not ALL of these categories!
When you are researching any one of these tasks, you have probably realized that you can go REALLY DEEP into any one of them. There are awesome, in-depth products on each one of these fields.
So where do you start - other than with my Product Launch Checklist?
Your time is scarce.
It takes time to execute everything you want to execute...
It takes more time to learn how to execute what you want to execute…
And it takes the MOST TIME to sort through all the information out there just to decide WHAT to learn and who to learn from before getting down to the business of learning and then executing.
And because you may not have the financial resources to go on a mad hiring binge, nor have the experience to be able to properly vet the people you want to hire, you probably fall into what this week’s guest, Chris Ducker, calls....
SUPERHERO SYNDROME
Superhero syndrome is where we as entrepreneurs try to do everything ourselves.
And that is incredibly overwhelming. It is hard enough to learn one new task as opposed to 10, and to be able to complete the task to your own high standard, let alone your customer’s.
At some point, the only solution is to cut something or hire someone to do it.
Enter Chris Ducker.
Those of you who have been following me for a while will recognize this episode from my original podcast, Entrepreneur Uncut #19.
But I have been getting so many calls from overwhelmed project creators that I decided to repost it for you here.
This episode is a crash course on both how to decide what to outsource, and how to outsource. It applies as much, if not more, to crowdfunding Project Creators as it does to any other entrepreneur.
Chris explains in detail his concept of the 3 Lists Of Freedom that I have personally used to delegate tasks in my business.
When I got started advising entrepreneurs launch crowdfunding campaigns I was doing most of the work myself.
But now, I have a team of people that help me do the copywriting, customer support, and technical work, while I focus on strategy, media outreach, and quarterbacking the whole project.
Listen to this episode, go through the 3 Lists of Freedom exercise, outsource something small, and then get some sleep!
Your business will thank you for it.
Resources mentioned
Cheat Sheet
- All consistently successful physical product companies follow similar paths to product launch. They may all have different names for each step, but goals of each step are the same.
- Great companies do as much work before launch as they can minimizing risk by controlling variables and costs. Inexperienced Crowdfunders don’t. The result is often a Manufacturing Death Spiral.
- Small-scale prototypes are often not fleshed out enough for mass production. Small changes in part design that you probably haven’t considered can greatly affect production and assembly costs.
- As a Product Creator, you have to know your customer and their needs well enough to be able to decide whether you can sacrifice a feature or tweak the design to save money on production without affecting your customer’s experience too much. Sometimes you will have to take a stand.
- It is not a good idea to let your manufacturer make these final design changes for you. You want to keep your design under your control. If you let the manufacturer have the final files, and you have a falling out, you will be hard pressed to get those files back.
About This Episode
Most Project Creators, and Product Creators specifically, have crowdfunding backwards.
They think, “Money first, product second.” (M-F-P-S)
It makes sense.
If you are looking at a low bank account, and don’t have experiencing raising angel or VC money or don’t want to sell ownership of your idea, then Crowdfunding sounds like a Pot of Gold at the end of a rainbow.
And while M-F-P-S CAN work, the failure rate is SUPER high.
That’s because there are two major ways a campaign can fail:
1- Project Creators don’t truly understand the problem they are solving and haven’t actually hit “Product Market Fit”, so the campaign fails at launch. Note: building a pre-launch audience (my favorite topic as regular listeners will note) is easy once you have hit Product Market fit, and nearly impossible if you don’t.
2- Project Creators have achieved Product Market fit, but their “Product” is in reality only an “Idea”. They don’t understand the manufacturing process and they haven’t fleshed out their true manufacturing costs. Once they raise a ton of money, they quickly find out that they are LOSING money on each order.
So you have to get as much of the manufacturing and marketing legwork out of the way BEFORE your launch as you possibly can.
So how do you do that?
Enter Filip Valica.
Filip Valica is a mechanical engineer and experienced product developer. He has worked for mom and pop shops as well as large companies like IBM.
He has brought a number of products to market and worked on all parts of the value chain, all with experienced companies.
What Filip noticed was that the systems and processes experienced companies use to minimize risk in a traditional product launch were nearly identical between companies.
After reviewing his DIY Product Development Flow Chart (see link below!) I knew his processes, when executed in parallel to my Product Launch Checklist, can drastically increase your chances of success!
In this episode, we take a deep dive into the interplay between marketing, design, and manufacturing.
I learned a bunch in this interview and I know you will too.
Resources Mentioned
Cheat Sheet
- Equity Crowdfunding and Rewards-Based Crowdfunding have some key similarities and some key differences. The main difference is instead of a reward, backers end up becoming shareholders.
- Projects that don’t make great rewards campaigns, like B2B, SaaS, or local services, can make great Equity Crowdfunding campaigns.
- Because the industry is so new, and securities markets are heavily regulated in most countries, the platform market is very fragmented. Instead of two major players, there are a number in every country.
- To satisfy regulators, there are a lot of extra financial projections and disclosure work involved with setting up an equity crowdfunding campaign. It is not a great idea to go for an equity raise of less than $30,000, and raises in the $100,000 - $200,000 are more common.
- Because you are selling shares, often campaigns have a funding ceiling. There are no “runaway successes”. You either hit your funding goal or not. You want to be able to maintain control of your company after the raise.
About this episode
I get asked all the time what the difference is between Equity Crowdfunding and Rewards-Based Crowdfunding.
There are certainly a few major differences and a few key similarities.
But I am no expert on the equity side of things...
So for this episode, I invited Nathan Rose, the author of Equity Crowdfunding - The Complete Guide For Start-Ups and Companies (launching November 2016). He also advises companies on how to raise money on equity crowdfunding platforms.
Nathan’s journey into Equity Crowdfunding was quite serendipitous.
He was an investment banker in New Zealand when he, like many of us, was inspired by Tim Ferriss and the 4-Hour Work Week. He wanted location independence but didn’t see himself as a product or software creator.
Right around the time he read the book in 2014, New Zealand was one of the first countries to change its laws to allow equity crowdfunding.
And when Nathan was working in banking, he had a lot of fun working with early stage companies raising money the traditional way.
As he was looking into the budding market, he spoke with the Kickstarters and the Indiegogo’s of the Equity world and found out that most Project Creators on those platforms were not strong on the financial modeling side, which was his specialty.
The platforms didn’t want to advise the campaigns. They wanted to build their software. But the platforms need projects to be compliant with the local securities laws, so Nathan ended up being referred by the platform to advise projects!
And since then, Nathan has helped raise over $11 million on Equity platforms all over the world.
In this episode, Nathan and I take a broad look at the equity crowdfunding industry from all angles and compare it to rewards crowdfunding.
Resources Mentioned
Cheat Sheet
- You will likely run into problems with manufacturing. These problems are exponentially expensive, meaning, they get grow with every unit you sell! You have to be aware of all the potential pitfalls so you can avoid the manufacturing death spiral as much as humanly possible.
- Having a buffer in the bank is a great idea. Build investment contacts before your campaign and then raise money immediately after your campaign ends. With positive energy and excitement from a successful campaign, money will be cheap. It’s much harder to ask for money (on your terms) when the shit has hit the fan and you’re about to go broke.
- Building relationships with people on the other side of the world is incredibly difficult. This difficulty is multiplied if you have never manufactured anything before. Find someone with existing relationships that you can leverage.
- Manufacturers will always push you to make your product easier to make, which is not necessarily better for the customer. Be prepared to push back if their design suggestions are not aligned with the customer.
- Always be in touch with your backers. This rule is especially true when things go south with manufacturing. Get ahead of any problems by being upfront, raw, and honest. It doesn’t take much time to send an update.
About this episode
Sometimes things go wrong…
Who are we kidding, EVERYTHING goes wrong! It’s crowdfunding....
Which means it’s likely the first time you have built and audience, reached out to media, made a sales video, or even designed a product. You’re going to mess a lot up.
But of all the mistakes you can make, screwing up manufacturing is possibly the easiest to do and also the most catastrophic for the viability of your business after a successful campaign.
That’s because mistakes are compounded with every unit sold.
So, the greater the “success” of the campaign, the bigger the hole to climb out of.
This is how the Manufacturing Death Spiral happens.
You’ve probably seen the Manufacturing Death Spiral from the outside multiple times because it always looks the same:
- Entrepreneur creates amazing gadget, raises millions! Smiling faces everywhere!
- A few months in, announces delays in shipment
- 6 months in Entrepreneur falls off the face of the planet
- Backers up in arms
- A few months later, TechCrunch reports company is folding
- Viability of Crowdfunding called into question by media
So what do you do when you don’t have the money to fulfill the orders you have because you find out your manufacturer’s quality is not up to par, or you didn’t price things out properly?
(...avoid the pitfalls in the first place… but more on that in a moment)
Michael Mataluni was the COO of the thingCHARGER, a brilliant and beautifully designed adaptor that lets you neatly charge all your devices while keeping your electrical outlets free.
thingCharger was in the midst of a Death Spiral of its own after a hugely successful, $600,000 raise. They had problems with the quality from their manufacturer and had to ultimately cut ties.
While trying to solve the problem, shipping delays, and subsequent backer complaints rose to such a level that he had to hire a team of people to handle them, which further strained the cash-strapped team.
It got so bad, they fell almost a year behind shipping at one point, that they didn’t have the money fulfill their original orders.
They didn’t know how to get angel investment and certainly weren’t in much of position to negotiate if they did.
But Michael Mataluni and the thingCharger team were able to regroup and fall back on their strengths while shoring up their weaknesses through effective partnerships.
Fast forward to today and they have since raised an additional $11 million over two separate crowdfunding campaigns:
- An additional $1 million on Indiegogo (for a total of $1.6 million) in a second, third party hosted, campaign
- $10 million on a self-hosted crowdfunding campaign
...and most important of all, they have manufactured and shipped over 250,000 units to their (now) very happy backers.
So how did Michael and the thingCHARGER team stop and reverse the Death Spiral?
What mistakes did they make after their original campaign and how can you avoid them?
Listen to find out!
Resources Mentioned
thingCharger Indiegogo Campaign
Cheat Sheet
- Getting customers is easy. Fulfillment is Hard. Lots can go wrong, especially if you introduce complexity into your perk designs.
- Having a working prototype is key before you launch. It shows potential Backers that you care enough about the problem to build it first. More importantly, if you complete the prototyping process, it proves to yourself that you have what it takes to complete the project!
- Not knowing everything is a universal trait of Creators. If you did, you’d probably go straight to Amazon… Embrace it and keep things as simple as possible.
- You WILL screw up. It’s what you do WHEN you screw up that matters. Do right by your Backers and you will have raving fans for life!
- Make sure you have put enough margin on your perks to allow yourself to reship your product no questions asked, when it gets lost in the mail, not “if”.
About This Episode
In this episode we are continuing our theme of “what to do when the campaign ends” with Maxwell Salzberg of BackerKit.
Full Disclosure: If you haven’t noticed already, BackerKit is a sponsor of the podcast.
But that is not why Maxwell is on the show.
Of anyone in the WORLD, Maxwell is one of the leading experts on how to fulfill the orders of your crowdfunding campaign.
That’s because he and the team over at BackerKit have helped over 2000 funded campaigns ship perks to their backers.
But Max didn’t come from the fulfillment or shipping world into Crowdfunding. He started as a Creator.
Back in the good old days of 2010, no one knew what Kickstarter or Crowdfunding was about.
Max and his friends had an idea of a decentralized social network so your data and privacy would not be solely controlled by “Big Zuck”.
They heard about the fledgling site, Kickstarter, threw together a “poorly scripted and edited video”, launched a campaign, and told “like three or four people”.
And the project, Diaspora, took off!
Their original goal was for $10,000, as Max puts it “so we could go up to a cottage and hack for 3 months, eat ramen, and not get real jobs for the summer”.
Diaspora ended up raising over $200,000 and was, in fact, the FIRST project to break six figures on the site.
Which is where the problems started.
Even though backers were supporting a software project, the perks were physical products... T-shirts, CD’s, and stickers.
And now a software engineer with no production or shipping experience had to ship items to almost 7000 excited fans.
“I planned to have a bad weekend burning a couple hundred CDs….”
Frustration soon mounted as he was spending all of this time fulfilling t-shirt orders and no time doing what his backers paid him to do… build Diaspora.
From that experience, and watching countless other Creators bang their heads against the wall of order fulfillment, he decided to found BackerKit.
Since then, he has seen every problem that can go wrong, go wrong. From orders getting lost, to shipping the wrong sizes of things, to address changes on three separate orders for the same person, to receiving email money transfers from people after the campaign ends because they want a second t-shirt and “ ...that’s easy right? Thanks! - Backer”.
Max will shed light on the “unknown unknowns” in fulfillment so you can avoid having the “ticking time bomb of Crowdfunding” blow up in your face.
Resources Mentioned
Cheat Sheet
- Amazon is simply a sales channel, NOT the “end game”. Build other channels in tandem.
- You are playing in Amazon’s sandbox. That means they can change whatever they want whenever they want. One of the channels you must build to have stable success is your OWN.
- You can essentially turn a physical product into a digital product by using Fulfillment By Amazon (FBA). Let them package and ship your product because your time shouldn’t be spent licking stamps and going to the post office.
- After a successful Crowdfunding Launch, put your product up on Amazon and begin to learn about sales page optimization. Learn from experts and look at other successful pages in your niche.
- Leverage your backers for high-quality Amazon reviews. Honest reviews are key for your Amazon page and if you have treated them right, your backers will be more than happy to help you out (especially with the sweet incentive system Scott goes over in this episode.
About this Episode
What is your plan for after you successfully launch your product on Kickstarter or Indiegogo?
In last week’s episode, you learned how Julianne Ponan got her superfood snack bars onto the shelves of the largest grocery retailer in the United Kingdom with persistence and creativity.
This week it’s all about Amazon with Scott Voelker of The Amazing Seller.
After running a successful, six-figure, portrait studio business for 10 years with his wife Lisa, Scott wanted to increase his income online, so he started teaching people how to start and run portrait studios themselves with New Portrait Biz.
That business was also successful, but he had caught the online bug, and eventually came across Amazon’s Fulfillment By Amazon (FBA) program.
FBA allows entrepreneurs and business owners to ship physical products from the factory to Amazon’s Warehouses. Once an order is placed either on Amazon, or your own website, Amazon will package and ship the order to the customer. No wrapping stamp licking required!
This means that Amazon has almost made running a physical product business like a digital product business. Your time can be focused on high value tasks like marketing and product creation.
Since discovering FBA, Scott has launched a number of successful private label products on Amazon.
He shares his knowledge and expertise on his Podcast, The Amazing Seller, which has over 4 million downloads to date.
In this episode, Scott offers an honest overview of Amazon’s platform and how it applies to your crowdfunded product.
There are a ton of tools and tips for you to sink your teeth into.
Resources Mentioned:
So you’ve listened to all the podcasts....
Perhaps even taken my course, Crowdfunding Domination...
You had a successful crowdfunding launch and now it’s time to create a real business.
Now what?
How do you transition from having a “campaign” to having a “business”?
If you are looking to eventually get your product into large retail stores, then this episode will provide the blueprint.
Julianne Ponan is the owner of Creative Nature Superfoods based in the United Kingdom. Five years ago, at 22 years old, she bought the company off of her father. It had £56,000 (~$75,000 USD as of publishing) in debt, and was also losing money month over month.
“It was a bit stupid, and when I look back it would have been easier to start from scratch....” - Julianne Ponan
The first thing she did was cut back on unnecessary expenses, eliminated almost all the products they were selling, and focused on hypoallergenic superfood snack bars.
Julianne then methodically built a group of loyal repeat customers with local retailers, but she had eyes on going national.
After hundreds of phone calls, trade shows, pitch meetings, she was finally able to secure listings in Tesco, the #1 grocery retailer in the UK. Creative Nature products are also in Ocado, Asda, and Sainsbury’s, as well as a host of other smaller health food stores.
So how did she do it?
She got “Creative”.
In this episode and you will learn some unconventional tactics, like “ethical stalking” and strategic brownie baking, that allowed her business to explode.
You’ll hear stories about her biggest mistakes so you can avoid them in the future.
Today’s guest, Nathan Chan, is wired to be an entrepreneur. He’s built a 6 figure digital publishing empire from scratch, and admits that in the beginning he knew exactly nothing about how to do it. Foundr magazine is a huge entrepreneurial success and there are tons of lessons to be learned from Nathan’s story and he shares them generously in this episode. If you’re an entrepreneur who’s just starting up your business endeavors, Nathan’s story should be very encouraging to you, so stick around!
“I don’t work. I build businesses for fun.”
That’s the first line you’ll see on Nathan Chan’s LinkedIn profile and it’s true. You can tell from the energy and enthusiasm that he exudes on this episode of Crowdfunding Uncut that it’s true. Nathan started building his online media empire before he really know what he was doing. Now his online magazine, Foundr, is one of the top 10 digital magazines on the iTunes store and he’s very pleased with how things have turned out (naturally). In this episode we find out how Nathan got started, the first steps he took, and how he landed some of his biggest interviews, including the cover story on Richard Branson that he used to put his magazine on the radar of many other high profile people who would one day be a part of his media publication. You won’t want to miss this episode.
Cheat Sheet (What you can learn)
- How Nathan began his podcast as a part of building his media empire.
- The signs of success and the strategies that helped Nathan move his magazine forward.
- Ways Nathan has leveraged his marketing for more subscriptions.
- Tools that can be used to optimize listings in the app store.
- The importance of finding the right person to pitch with your interview request and how to make their involvement a “no brainer.”
- Offering a “feature” position to interviewees early on to get momentum going.
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Crowdfunding Uncut is the place where incredible project creators show you how they launched their products online using the world’s largest crowdfunding sites such as Indiegogo and Kickstarter.
Subscribe to iTunes or to Stitcher for more episodes of Crowdfunding Uncut.
Smart Player (for that episode)
Why the content of the episode is important
Not everyone is cut out to be an entrepreneur, but for those who have it in their blood to start and grow their own business Nathan Chan has two words of advice: Extreme focus. In his words, “You have to be hungry if you want to build a successful business.” There can’t be any part of the process that you allow to intimidate you or hold you back. You have to be constantly learning, constantly growing, and constantly pushing past the barriers to your next step so that you can eventually reach the pinnacle you’re shooting for. It takes that kind of relentless effort to make your business the success you want it to be. You can hear Nathan unpack those concepts as he discussed the issue of extreme focus, on this episode of Crowdfunding Uncut.
More about the show
As he began his digital magazine, Nathan wanted to get an interview with Richard Branson. He figured that Richard was the epitome of an entrepreneur and that he’d be a perfect fit for his niche audience. But it wasn’t easy to get the interview. He worked tirelessly to find just the right person, the “gatekeeper” he could speak to in order to make a good connection with Richard. When he finally did, he worked very carefully and consistently to make sure he was able to land the interview. Though he originally lobbied for a Skype interview, it wasn’t possible given Richard’s schedule so he opted for an email exchange. That interview and the cover article he published were the catalyst for the future success of Foundr magazine. In this conversation with Khierstyn Ross, Nathan shares how he went about getting that connection, step by step – and how the results were more than he hoped for.
Quotes
- "I don’t feel like I’ve attained success"
- "If things don’t work, you just keep moving and keep building"
- "Being so extremely focused provides an extreme amount of hustle"
- "You have to be hungry if you want to build a successful business"
Nathan Chan's Story
Most online enterprises today are launched with a very carefully thought out strategy for getting the most eyes on it as possible, right away. But back when Nathan Chan began his online magazine (it wasn’t called Foundr then) he didn’t have any launch plan. He just build a website, began designing his magazine, and started contacting people he wanted to have featured in its pages. That was it. Through a lot of trial and error he was able to land some “big fish” who he then used as leverage to attract more big fish. Richard Branson was the first and many others followed. In this episode you can hear the details of what Nathan did to track down Richard Branson, get an interview with him, and use that connection to get more high profile interviews to move the Foundr brand forward.
Thanks, Nathan!
(Click here to thank Nathan on twitter!)
Resources from Website
Foundr Magazine – Nathan’s flagship publication
https://sensortower.com/ – App store optimization tool
This episode is brought to you by BackerKit
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Clay Hebert is a Crowdfunding and Startup Advisor that’s helped creators raise more than $50M through Indiegogo and Kickstarter. He can be found at CrowdfundingHacks.com.
The Cheat Sheet
- Crowdfunding campaigns get funded before they are launched, not while they are live
- Good crowdfunding is just good marketing. If you are really good at marketing, then running a crowdfunding campaign should be easy
- Why you should do your own crowdfunding campaign, instead of asking someone else to run it for you
- “Below MSRP” and why you need to be aware of it
- What are the 5 biggest mistakes people make when crowdfunding
- The importance of defining your customer avatar before you set out to launch
Subscribe through iTunes
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In this episode, Clay and I discuss the common mistakes a creator might make when launching a crowdfunding campaign. We also discuss basic concepts and strategies which have a huge impact on starting a campaign.
More about the Show
Crowdfunding Uncut is a show and podcast hosted by Khierstyn Ross. Every week we co-host the show with successful project creators, and other minds in internet marketing. The goal is to help YOU become inspired, take action, and get real results when it comes to getting your campaign funded through Indiegogo or Kickstarter.
Thanks, Clay!
If you enjoyed this session with Clay Hebert, let him know by clicking on the link below and sending him a quick shout out on Twitter!
Click here to say thank you to Clay on Twitter! Click to tweet.
Resources from this episode
- Clay’s website CrowdfundingHacks.com
- Special gift for listeners. Click here.
- @ClayHebert on Twitter
- Crowdfunding Uncut Episode 33: The Facebook Ads Hack that Helped Ravean Raise $1.33M on Kickstarter | Bryce Fischer
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Let them help you take care of fulfilment, customer surveys, upsells, and more! Head to Backerkit.com for more information.
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Brian Clark is a recovering lawyer, serial entrepreneur and founder of Copy Blogger, RainMaker Platform, and several other successful companies. I met him in Cebu during Tropical Think Tank (notice a theme?), and I was able to ask him how he started out before there was crowdfunding and how he grew Copy Blogger to 8-figures with zero paid ads.
In this interview, Brian and I discuss the importance of validating a product before launching, and why having an audience is so critical, not just from a backer perspective, but for live feedback.
In this episode you will learn:
- How to have these conversations with your customer: “Will it sell?” or “Will people buy it?’, as well as “Do people want it?”
- Always, “audience first”; find out what they want, and how to sell it to them. It’s your job to find out what people want to buy.
- How to ask someone to give you feedback on your idea.
- People love to complain: a complaint is a product waiting to be made, or it is an improvement on an existing product that is not living up to customer expectations.
- Validation has nothing to do with your ego.
Resources mentioned:
Click to Tweet
- “Luck is not a strategy.”
- “Content marketing is how we do things. Content marketing is not something we just preach. It is something that we do.”
Meet Maneesh Sethi, founder of Pavlok, a wearable that helps you break bad habits from the threat of a mild electric stimulus. Formerly a productivity hacker, Maneesh recorded all of his experiments on HackTheSystem.com.
Pavlok was originally put on the map after a successful Indiegogo campaign that raised over $250,000. We started working together while preparing for launch number two of the Shock Clock a miniversion of the Pavlok that focuses on helping you wake up earlier.
We were going to do the impossible... Launch a successful campaign in two weeks. Essentially there was a very short time for a prelaunch campaign. The only way we got away with this, is Pavlok had a sizeable audience prior to the second launch.
As it turned out, it was a very successful product launch, raising more than $100,000 in 8 days after the launch.
Shock Clock went on to raise over $300,000, be featured in the NY Times, Spike TV’s Life or Debt, and Shark Tank.
Resources mentioned:
Pavlok.com
90 Days to Becoming a Berlin DJ
Maneesh Sethi 4HWW Success as a Digital Nomad
In an increasingly connected world, it’s ironic that people are not getting the value out of their connections.
As Jordan Harbinger says it, “If you hoard your network, it will atrophy.”
Jordan is the founder of the Art of Charm Podcast. It’s also his second time coming onto the show.
Their site has evolved from personal development with tips on dating to its current state where it emphasizes personality development for business and personal use.
One thing that Jordan teaches is how to become an awesome human being. From tips on becoming more effective in business through confidence and social building exercises, it’s come a long way from its start as a pickup podcast back in 2006.
We are losing touch with real relationships. As we continue to mix up relationships with our virtual friends, we lose our ability to form real ones in front of us.
Your network is your networth. In this episode we are going to uncover some pretty epic social strategies and you’ll also learn how Jordan escaped kidnapping not once, but twice.
True story.
During this episode we discuss:
– Social capital, what it is, and how to properly use it.
– Framing it: What’s in it for the other person?
– How to use great networks, and what happens to those who don’t have them.
– Deflect, defer, disclose: controlling the conversation
– The Tornado Technique
Resources:
There are a lot of people who have an idea but don’t know what steps to take to get it up and running. These are usually ideas which need to be seen and touched first before the value can be appreciated. There have been attempts to have these ideas crowdfunded, however, the truth is, there is a lot of work needed before an idea can be presented to the world for crowdfunding.
In most cases, it would be better for the project creator to launch a campaign once they have a working prototype, and a good idea of the costs associated with manufacturing and fulfilment.. A working prototype should be the first of your goals.
Our guest this episode is Dylan Horvath, the head of Cortex Design. In the past, Cortex has helped many successful crowdfunding projects with their end-to-end services.
This is an animated discussion which shows Dylan’s passion for engineering, design, and getting a product through the whole design process from research and visualization to prototyping, manufacturing and logistics.
We discuss why it’s important, and what you can do to get the product funded, certifications, off-shore manufacturing, and long term relationships with your fulfillment partners.
Dylan has had a life long love affair with engineering and how things work and he has leveraged it into an engineering design firm which provides solutions for startups. If you have a product you want crowdfunded, but is still in its infancy stage, this episode will help clear up what you need to do next.
“You have a whole lot of risk, especially with your timeline when you’re right at the beginning. As you try to mitigate risk as you go along, if that risk mitigation is under the watchful eye of 2,000 people on the crowd funding campaign, it could be a difficult place to operate from.”
Raising money to develop your prototype a hard sell, and extremely dangerous if you don’t have experience in estimating costs.
You could end up raising money, and realizing you don’t have enough to complete a working prototype, yet alone bring a final product to ship.
Dylan carefully outlines the steps toget an idea moving with a prototype, and on to manufacturing, and distribution.
This is one of the longest episodes we’ve had and it is well worth the time to listen to.
Resources Mentioned
Cortex Design
“Kickstarter is Debt”, The Bold Blog
Cortex Design YouTube Channel
Are you, at some level, squeamish about the idea of self promotion and building your audience?
I consistently promote making connections and building your list as job #1 for the project creator.
Getting press and connecting with influencers who could help you promote your project to their audiences is the best way to build a list.
Why? Think about it.
What do they have that you don’t?
An audience.
But influencers especially, don't want to be spammed. Top people get dozens of awkward requests every day from people who just don't “get it”. And those requests get ignored.
You have to know the right way to approach influencers or they will delete your email, and you will never get their endorsement... Even if your project would genuinely help their audience.
In this episode, we speak with one of the best at connecting deeply with experts, Andrew Warner, founder of Mixergy.com.
Andrew had some street cred before launching Mixergy.com. He cofounded Bradford & Reed, a greeting card company that was grossing $38.5M per year.
After selling the company, Andrew went on to found Mixergy.com.
“I created Mixergy to help ambitious people who love business as much as I do learn from a mix of experienced mentors. I do that through interviews where founders tell their stories and courses where they teach a solution to issues that can cripple founders.”
Andrew has made connecting with influencers like Tim Ferriss, Gary Vaynerchuk, and over 1300 other world-class entrepreneurs into a multi-million dollar a year business.
This episode is filled with a number of dynamite tactics that will help you genuinely connect with influencers and make them want to promote your campaign.
But simply following the step by step procedures outlined won't get you very far.
Listen closely to how Andrew talks about his deep sense of curiosity and commitment to his mission, and how this will help you build genuine relationships.
Your outreach strategy should be built on a foundation of integrity, mutual benefit (as opposed to a “what can I get” attitude), and commitment to your mission.
If you do this, you’ll be able to take advantage of the #1 audience building hack:
Leveraging someone else’s audience to build your own.
Resources Mentioned