Update: This post takes an in-dept look at a campaign that was run a few years ago. The observations still apply today but the subject is a little dated.
If you would like to learn how to run a winning campaign then please read our recently created: Complete Guide to Crowdfunding
The below post looks at a campaign run my music video site BalconyTV, who were looking for money to build a new website. Their campaign page on Indiegogo has since been taken down.
For those of you who don’t know of BalconyTV they started in Dublin about five and a half years ago with the premise of uploading a video to Youtube every day. Each video would feature a local or possibly an international act performing live on their balcony. In the last couple of years they have started opening franchises around the world and are now uploading videos from 23 cities world wide. (That’s almost 2hrs of video upload a day!)
They are asking their mailing list to help them raise $4K to build a new website.
I see three flaws in how they are running their campaign.
Firstly, they have given themselves only a few days in which to raise the needed money.
It has been proven that campaigns that imply a time restraint tend to have a better outcome. But this is in respect to limiting yourself to 2-3weeks instead of 2-3months. By limiting the time to a few days, you decrease the amount of updates you can send without upsetting subscribers. If you are going to plan a crowd funding campaign you should give yourself 3 weeks and update once or twice a week.
Granted with 20hrs to go BalconyTVs campaign they had raised $1,891, but that’s usually from your closest friends and most loyal followers. Raising the remaining 52% is always harder.
Secondly, they appear to be asking for maximum amount that they need.
Luckily they are on IndieGoGo, who let you claim your funds even when the total hasn’t been reached. Whereas on Kickstarter and others, if you don’t hit your target you don’t get paid. The money goes back to the funders and you wander off with you tail between your legs.
You should ask for the minimum you need to start your project. That way as long as you reach the target you can take that money. If you raise more then all the better.
Thirdly, their rewards are flimsy!
Crowd funding campaigns work on the premium model. You give a little, you get little in return, but if you give a lot, you give something unique and therefore worth more value to you. This is to encourage more people to donate more then they would otherwise be willing to.
Here is what BalconyTV is offering:
Peace and Love: $1
Tom will sing on the Dublin balcony!
Tom will dance for you: $5
On the Dublin balcony!
A big thanks!: $20
We will send you good karma from the balcony:-) And a big thank you.
A BalconyTV shout out!: $50
We will give you a special shout out in a special BalconyTV episode.
A shout out and a t-shirt: $100
We will send you a limited edition BalconyTV T-Shirt
Social media assessment: $200
A skype call or a meeting with BalconyTV founder Stephen O Regan. And a T-Shirt And a shout out!
The $1, $5, $20, & $50 are all the same. Why would I part with $50 and get nothing, if I could pay $1 and still get nothing?!
For $100 you get a limited edition t-shirt. OK, so finally they offer something different. But $100 for a t-shirt, come on! Maybe if I loved the BalconyTV brand, I might consider parting with $50 but no way would I pay $100 for a t-shirt. (I see 8 people did, but I say more fools them!)
And finally they offer a Social Media Assessment for $200. What’s an assessment? What is Stephen O’Regan’s experience in social media for bands? There is no incentive to choose this option as you have no idea what you are getting for your money. As far as I’m aware, he has no experience in developing a online profile for bands and his assessment could be as little as, you’re on Facebook but your not on Twitter, sort that out! This should have been detailed better to give it value.
Compare this to a successful crowd funding campaign.
Here a couple asked for $2,500 (the minimum needed to produce a run of their pens for $50 each). They set the campaign up on July 17th and 12hrs later had reached their goal. By Day 7 they had 1600 backers; Day 20 they had 3,000; Day 30 (closing date) 4,048 backers had purchased 5,443 pens, 425 drawings & 37 skype calls, raising a total of $281,989 (that’s 11,200% of what they were looking for)
Simply because they offered value. Of the 4048 backers, only 17 chose the none tangible fuzzy token option. 2969 bought a pen, while a further, 941 bought pens for their friends as well as them selves and 97 people spent over $200
If you are planning to crowdfund then bare in mind that the majority of people will go for the cheapest item that is tangible and most relevant to your campaign. In the Pen Type-A situation, it was simply a pen at $50. With BalconyTV they didn’t have anything tangible at a reasonable price so the majority of backers gave $20 purely for support.
There will also be a smaller number of people who will want to give a little extra and these are the people who if enticed, will spend a little more then they expected, but only if there is something of high value. In the case of the pen is was being able to buy your friend one and start up a conversation about how you got it, or at their highest end, the $200+ packages that included either a skype call or a series of drawings, plus a bundle of pens for your friends. BalconyTV’s premium options, were an over priced t-shirt or consultation from someone who appeared not to have experience in what they were consulting in.
Needless to say, BalconyTV didn’t reach their target, receiving only 64% of what they requested.
Of all the crowdfunding campaigns that reach 30% of their funding, 90% go on the receive all their funding. This would lead me to believe that BalconyTV has the support to run a successful crowdfunding campaign, had they not executed it badly.
If you are thinking of running a crowdfunding campaign then check out my Complete Guide. A one-stop shop to understanding how crowdfunding works and how to run a winning campaign.
There are over 100 comments below, where I have been answering people’s questions. You might see some that relate to your campaign.