Slides from my crowdfunding presentation at the University of Alabama Office of Technology Transfer's Innovation Day. I have supervised over 50 student crowdfunding projects in the past six months.

1. Run an insanely successful
campaign
Craig Armstrong, Ph.D.
Innovation Day
April 16, 2014
https://www.kickstarter.com/projects/1778393222/alabama-garage-surf-and-punk-compilation?ref=home_location

2. What is crowdfunding?

3. Unpacking the unique attributes of
Crowdfunding
• Your offer: unique, novel, “no one else has something like this!” –
customers are backing both your offer and you
• Experimentation: low up-front costs to test market interest
• Validation of your product, project, or service idea: “everyone’s a liar
until they’re a buyer” – paying customers = legitimacy
• Reward structure: focus on uniqueness, individualization, and
privilege; your campaign and rewards offer benefits to your backers’
social status
• Ownership: you don’t give up any equity in your venture

4. What you get from your successful
crowdfunding campaign
• Control: you control everything
• Money; sometimes much more than you wanted
• Equity: you don’t give up any ownership in your firm
• Validation of your product, project, or service
• A direct conduit to shoppers
• Relationships with Loyal early customers who will be your
“evangelists” for future campaigns
• Useful Advice: from experienced viewers you’ve reached

5. A crowdfunding
campaign consists of:
1. The product, service, or event
2. The pitch
3. The video
4. The rewards
5. The funding goal
6. promotion
Your task is to look at as many projects that have succeeded (and
failed) to understand the subtle formulas for each component
Note: These six steps come from the Crowdfunding Bible, which is available for free online at
http://www.crowdfundingguides.com/

6. 1. The product,
service, or event

7. The product, service, or event
• Does the casual observer find it interesting?
• What makes it unique, exciting, or novel?
• Is it compelling enough that people will pay for it?
• How big is the audience for the offering?
• Who is the intended audience?

8. Example: Luke Iseman – Project A
The offer
$ pledged
$ project goal
# backers

9. 85 backers, $1,164 raised, < $14/person
Pledge level Reward # backers $ raised from pledge
level
$5 Ebook and full video of the conversion process,
with each section available as I go.
34 $170
$15 Printed book signed by me upon project
completion plus above.
40 $600
$50 An hour consultation by phone with me about
your container plus above
4 $200
$150 Half-day visit to project site in Austin, Texas (y'all
get yourselves here).
0 $0
$2,500 I will visit your site, within the continental U.S., at
my own expense and spend a weekend helping
you with your sustainability project
0 $0
Goal of $15,000 with average pledge of $14 requires 1,071 backers (i.e., >> 85 actual backers)
6
100
300
1,000
Backers needed at
each level in isolation

10. Value proposition Customer segment
Suggestion: Use a value proposition canvas to determine what customer pains or gains
your value propositions can satisfy

11. What you can do
1. What can you provide to a customer group that will deliver value to
them?
2. What features and benefits will deliver that value?
3. How many people are in your target market? Start by roughly
quantifying how many people you and your teammates personally
know (email, social media, offline, etc.) and who you can count on
to contribute. The people you know will help pool the initial funds
and give your campaign the momentum it needs. Think about how
you will get in touch and interest them in your campaign.

12. 2. The pitch

13. Pitching
• Pitching is a process intended to capture your audience’s interest by
making them identify with an unmet need or “big pain,” then
introducing your own brilliant solution
• In less than one minute, you describe the pain, solution, how you’re
different, why you? (or a status update), and a call to action
• Generally, Your goal is to bait the hook, not close the deal – your
product or service description and rewards should help close the deal
• In crowdfunding the goal of your pitch is to make your campaign page
“sticky” so that they will read your story and pledge-reward offerings

14. What you can do: A five-step approach
1. Open with a big pain or unmet need or WOW-inducing statement that
instantly captures your audience’s attention
2. Follow your opener with your brilliant solution
• Show the product or service
3. State how your offering is different from what audience is currently using
– cherry-pick lesser features of your competition
4. Let the audience know “Why You” are the person they should back (or)
• Let them know where you are in the project (status) (or)
• Emphasize the cool factor or utility to current customers
5. Close with a call to action (pledge now, share this link with your friends,
retweet, etc.)

15. 3. How to use video effectively
The key to your campaign’s success

16. Why video?
• Video offers a deep, rich communicative experience that can engage
the viewer more effectively than text or pictures alone
• A video says you care enough about what you’re doing to put yourself
out there
• A video is by far the best way to get a feel for the emotions,
motivations, and character of a project – it’s a demonstration of
effort and a good predictor of success.
• As a result… “projects with videos succeed at a much higher rate than
those without (50% vs. 30%)” (Kickstarter website).

17. People are funding you
• Crowdfunding is (by definition) all about community
• In most cases, people are funding you as much as they’re funding
your project
• Let them see you, hear your passion, and get excited with you
• Make sure you come across as competent and trustworthy
• Be energetic, have fun, and smile* when you’re on camera
* But make sure you’re smile is genuine – see next two slides

18. People have seven universal emotions…
Source: http://temasys.com.sg/vidyoedm22102013/
…only one makes us feel good! Blah!

19. 10 fakers, 10 not – Most people can tell when
you’re faking a smile – be authentic!
Take the test yourself: http://www.bbc.co.uk/science/humanbody/mind/surveys/smiles/

20. Get your viewer’s attention!
• Hook them with a compelling, emotion-invoking problem or
a wow-inducing statement
• You have 10 seconds or less to hook viewers and convince
them that
1. your video is worth finishing, and
2. your project is worth investing in.
https://www.kickstarter.com/blog/how-to-make-an-awesome-video

21. Cover these 6 topics
1. Tell viewers who you are.
2. Tell viewers the story behind your project.
3. Openly ask for people's support, explaining why you need it and
what you'll do with their money.
4. Talk about how awesome your rewards are, using any images you
can.
5. Explain that if you don't reach your goal, you'll get nothing, and
everyone will be sad. “we don’t want that to happen!”
6. Call them to action! (“Please support my Kickstarter campaign now
with a pledge”) Thank everyone!
https://www.kickstarter.com/blog/how-to-make-an-awesome-video

22. What you will need
• Camera: if smart phone, shoot in landscape
• Tripod: to eliminate shakes and need for extra team member
• Lights: room with lots of natural light or an outside location
• Sound: smart phone < 1 ft from your mouth – you will get good quality
sound just using the ‘voice memos’ app
• Editing: Movie for Mac, Movie Maker for Windows, Camtasia
• Graphics: Picmonkey
• Location: natural light, power, sound
• Script: with beginning, middle, and end – storytelling!
• Storyboard, check lists and logging shots: Get organized, dammit!

23. Use a storyboard (even if you can’t draw)
• It’s a visual interpretation of a story or script
that depicts every scene, action and camera
movement
• The storyboard has to work technically and
follow the same rules as a film; that means…
• They must have shot, scene and panel
numbers and be labeled with action notes
and dialogue
• The most important aspect of the storyboard
is communication, not drawings
Source: Karen J Lloyd

24. Storyboard examples
Shot planner
Storyboard with shot, scene, panel numbers,
action notes and dialogue

25. Video shot log • a written record of the shots on a tape or disk
• it really helps to do the shot log during the
shoot — it will be easier and save you time
later
Source: http://www.mediacollege.com/video/production/shot-log/

26. Example: Star Command
[ Click to play video ]
Star Command’s video showcased the game’s
technology and quality of its graphics while using
a clever narrative that reflected the attitude of
the game

27. Other issues – “legal” media
• Don’t infringe on copyrights and trademarks with music or artwork
• Open source music resources: SoundCloud, Vimeo Music Store, Free
Music Archive, and ccMixter.

28. What you can do
1. Develop a script for a compelling story
2. Create a storyboard for your video
3. Get the right filming and editing equipment
4. Project passion, trustworthiness, and competence
5. Edit and test on friends

29. 4. Rewards

30. Notes about rewards
• Great ideas for CF campaigns can fail because of bad rewards
structures
• Consider:
• How much $ you need
• How many people will likely want to buy your offering(s)
• How many people will actually view your campaign page
• What you want to accomplish with each level of matched pledges and
rewards

31. Example: "Your Amazing Movie Project"
• $20 pledge = copy of DVD
• $50 pledge = signed poster + DVD
• $500 pledge = all of above plus
credit as executive producer
• $2,500 pledge = all of above plus
invitation to exclusive launch
party
Pledge $
Valueofreward
the best benefits often take the
form of EXCLUSIVE offerings
through merchandise, advance
access to new releases, or more
personal, privileged incentives.

32. Example: Luke Iseman – Project A
The offer
$ pledged
$ project goal
# backers
How many
people will be
interested in
watching this
video, let alone
be willing to
support the
campaign?

33. 85 backers, $15K goal, < $14/person
Pledge level Reward # backers $ raised from pledge
level
$5 Ebook and full video of the conversion process,
with each section available as I go.
34 $170
$15 Printed book signed by me upon project
completion plus above.
40 $600
$50 An hour consultation by phone with me about
your container plus above
4 $200
$150 Half-day visit to project site in Austin, Texas (y'all
get yourselves here).
0 $0
$2,500 I will visit your site, within the continental U.S., at
my own expense and spend a weekend helping
you
0 $0
Goal of $15,000 with average pledge of $14 requires 1,071 backers (i.e., >> 85)

34. Luke Iseman (and team) – Project B
The offer
# backers
$ pledged
$ project goal

35. 136 backers, $5K goal, $47/person
Pledge level Reward # backers $ raised from
pledge level
$5 A thank you note + copy of biochar study and inclusion of your name in study 12 $60
$10 Small Black Revolution burlap sack with printed logo + study 8 $80
$25 Small bag of Black Revolution (enough for 4-5 potted plants) + study 38 $950
$35 Same as $25 level but you get your order first 36 $875
$50 A medium bag of Black Revolution (enough for 8-12 potted plants) + study 13 $650
$100 Five small bags of Black Revolution (enough for 20-25 plants) + study 7 $700
$150 50-lb bag of Black Revolution. Enough for several raised beds. 7 $1,050
$1,000 Bulk order (500-lb) of Black Revolution delivered anywhere in the Continental
US.
1 $1,000
Observe how pledges above the base “product level” of $25 add value while substantially raising higher-revenue pledges

36. Where’s Luke? His off-the-grid house is now a
portable factory!
“We can build distributed
biochar production
facilities inside 20'
shipping containers. This
means we can send
production equipment
directly where the
demand exists.”
By the way, Luke, I am a big fan of your ideas and projects. You are an exemplar for how people can become serial
crowdfunders

37. The hidden
costs of
successful
campaigns
Average $32/pledge
“Wow! We
made nearly
100% over our
goal!”

38. Pledge-reward structure
Pledge levelLevel name Reward # Backers
$ Raised /
level
$5Redshirt MP3 of game soundtrack 97 $485
$25
Midorian
Ambassador
Game promotion code, upcoming
DLCs, exclusive room, stickers, phone
backgrounds + above 954 $23,850
$100
Starship
commander T-shirt, poster, map, + above 97 $9,700
$1,000Fleet Admiral
In-game character likeness, credits, +
above 2 $2,000
Totals 1,150 $36,035
Source: https://www.kickstarter.com/projects/starcommand/star-command-sci-fi-meets-gamedev-story-for-ios-an?ref=live

39. 0
100
200
300
400
500
600
700
800
900
1000
$5
$25
$100
$1,000
97
954
97
2
Numberofbackers
Pledge Level
The visual: Pledge levels and number of
backers for Star Command
The soundtrack The game (aka actual product) The game + tchotchkes Immortality

40. “$17,000 more than we wanted!”
[ subtitle: “where did the money go?”]
$ 37,000 Raised in KS campaign
$ (2,000) Pledges never materialized
$ (3,000) Fees from Kickstarter and Amazon
$ (10,000) Reward fulfillment costs
$ (6,000) Game music composer's fee
$ (2,000) Poster design artwork
$ (3,000) Presence at PAX East trade show
$ (4,000) Lawyers, accountants, professional services
$ (1,000) iPad units needed to test game
$ (1,800) Taxes (30%)
$ 4,200 Disappeared on daily costs and incidentals

41. Solution humbly suggested: Use a business model canvas
Make sure costs and revenues are “congruent” and that revenues > costs
Visit http://businessmodelgeneration.com/ to learn more

42. Which character is your crowdfunding
campaign?

43. Example
of
successful
use of
multiple
reward
levels -
Jane
Jensen
Link to Kicktraq
The smoothness of this funding line suggests she did nothing to promote the campaign

44. - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
$16
$30
$50
$51
$99
$100
$101
$102
$115
$200
$215
$224
$239
$250
$265
$500
$515
$1,000
$1,500
$4,999
$5,000
$10,000
Number of Backers by Pledge Level
# backers
These four pledge levels cover $3 of
financial real estate, but contributed a
combined $55,186!
Ask yourself: “What if she had only used
a $99 or $100 pledge level?
You’ll never know how high your
backers are willing to go unless
you ask

45. 5. Funding goal

46. How much money to you really need?
• Exposure and interest
• How many people will want your offer?
• How many people will view your campaign?
• Can you scale your offering in terms of more valuable rewards for higher
pledges?
• Other considerations:
• Are you testing a concept to validate a new product or service?
• Do you need cash to start up a new venture?
• Are you trying to build a “following?”

47. 6. Promotions

48. Steve Blank on customer development
Source: http://worxsolution.com/what-is-crm

49. Layer new
features
Upsell
Engage
Referrals
Value
attributes
Awareness
Purchase
Evaluation
Steve Blank’s customer development funnel looks a lot like these two panels in the business model canvas

50. Source: http://www.theingproject.com/blog/why-is-crowdfunding-a-powerful-marketing-tool
3 important approaches
to customer
development

51. How you can promote
• Use your early backers to
promote your campaign (they
want you to meet your funding
goal or they get nothing)
• Social media!
• Customized landing pages
targeted to different customer
segments for a/b split testing
(launchrock.com)
• Use Google Analytics and
Adwords
Kickstarter tells the creator the exact
order backers pledge in.

52. What you can do: Promotions
1. How many people do you know? (email, social media, offline, etc.) and
who can you count on to contribute? The people you know will help pool
the initial funds and give your campaign the momentum it needs. Think
about how you will get in touch and interest them in your campaign.
2. Use the business model canvas to determine your channels and
customer relationships
3. Use a personalized email –the average contributions amount through
email is about 20% higher than for contributions through other sources.
4. Use social media platforms – about 22% of the funds raised by a
campaign come from people clicking on social media posts – direct traffic
to you campaign site with landing pages and posts to social media –
make a special Facebook page for your project

53. What’s next?

54. The reality of crowdfunding
"If you think crowdfunding is easy, guess again: It's
definitely not. It's actually pretty scary because you
have to be prepared to put yourself out there on
display [for the public]. It's the Internet and you
have to expect mixed feedback.”
- Jane Jensen, Pinkerton Road: A Year of Adventure

55. (but also) The reality of crowdfunding
“Most videos are just someone telling their story
straight into the camera. You can spend days
shooting and editing, or you can just knock it out
with a couple friends on a Saturday. It doesn't have
to be perfect, it just has to be you.”
- How To Make an Awesome Video, Kickstarter Blog

56. In other words…
It’s never been easier to make money doing
something you love or to raise money for
something that matters to you

57. Free resources
• IndieGoGo crowdfunding tips
https://www.indiegogo.com/crowdfunding-tips
• Crowdfunding Bible -
http://www.crowdfundingguides.com/The%20Crowdfunding%20Bible.pdf
• Kickstarter Blog - https://www.kickstarter.com/blog
• FundMeFundYou – http://fundmefundyou.com/crowdfunding101/

58. Campaigns cited in this presentation
• Black revolution
• Jane Jensen’s “a year of adventure”
• Luke Iseman shipping-container-to-off-grid-house
• Star Command