The most accurate test of whether you have a viable business concept is paying customers.
For entrepreneurs, crowdfunding is one of the best ways of validating your idea, as it gives you a way to acquire paying customers BEFORE committing to mass producing a product.
One entrepreneur who has successfully leveraged this platform to get his business off the ground is Entourage Alumni student, Vinson Leow, Founder of ASAP Technologies. Since raising $13,000 on his product Bondi Laces, he has now gone on to successfully raise close to $1 million across a suite of lifestyle products. Vinson raised almost $1 million across the 3 campaigns above
How did he do it you ask? With each campaign, Vinson took lessons from the previous campaign and iterated both his product choice and campaign strategy to increase the success of his subsequent products.
We chatted to Vinson to get some expert insight about what it takes to run a successful crowdfunding campaign.
1: What are the common mistakes you see entrepreneurs make when crowdfunding?
The most common mistake is not doing all the groundwork before you launch a campaign. Ninety per cent of the work is done before the campaign even launches. This includes preparing Facebook ad campaigns, building a targeted email list of people who are interested in your product and preparing email marketing campaigns.
2: What are the things you wish you knew before launching your campaign?
I wish I knew the ROI of each sales channel prior to launching my first campaign, so I could adjust how to spend my time and budget accordingly.
People often spend a lot of time on the things that don’t actually convert into a high volume of sales, like organic social media posts and neglect higher impact channels like Facebook ad campaigns and email marketing.
3: What are the changes you implemented in each subsequent campaign to increase profitability?
For us paid Facebook advertising and email campaigns have driven the highest volume of traffic and sales.
I’ve moved away from focusing on PR, while it can be effective for building credibility, for me it has never had a strong ROI in the short to medium term.
This is not the case for all products though, for some PR has been the sole reason a campaign was able hit or surpass their target. PR will come naturally if your campaign performs well so the focus should be strictly on driving sales in the early days of the campaign.
4: What are the golden rules of crowdfunding? Can you give us three quick tips to adhere to.
Essentially, Facebook marketing, email campaigns and securing a high ranking on your chosen crowdfunding platform are the three core components of a successful campaign .
Rule One: I recommend spending the majority of your marketing budget on paid Facebook advertising. Ahead of launching prepare lots of variations of ads, copy and audiences so that you can split test and iterate depending on performance.
I would highly recommend using a digital agency who specialise in crowdfunding for this. While they will take a cut of the profits they will also make your ad spend about 10 time more efficient (if you have a strong product), so it’s usually worth it. It’s better to get 70% of $200,000 then $100% of 20,000.
Rule Two: Email marketing is the most underrated tool in advertising. Email is still king and has the highest ROI by far as it lands right in front of potential customers. If you don’t have a big database to begin with I suggest running a competition giving away your product ahead of launching, in order to build a strong following of qualified emails that you then can market to during the campaign.
Rule Three: Ranking on the first couple of pages of your crowdfunding platform, particularly on Kickstarter is crucial to your campaign’s overall success.
The first 72 hours of your campaign is so crucial – if you can generate a lot of sales and hit your target in this period you rank higher in your category and location. This also increases your chances of being chosen as a ‘staff pick’ which could double your sales over the duration of the campaign.