Elements of Crowdfunding Campaign
Fundraising through crowd funding, which is perhaps one of the most exciting new ways to actually make money from your fan base and actually from potential donators all over the world. In order to get your project done now, let's face it in the past, the only way a musician could really generate a lot of money is to go to a major label, and a lot of times, if you're going to go with a business partner like a major label, they understand how the music industry works. They will ask for the rights to your music as a result of this, and that deal isn't always good for every musician, as people know, but what we can do nowadays is go directly to our fan base and say, hey, help me make this album, make a donation, you can say, hey, I'm going to give you the reward is part of it, including getting the album so you're kind of paying ahead of time and making it possible for me to make anything that I'm trying to make, and they could buy a piece of your dream basically, so we want to talk about ...
exactly how to do it. The best ideas that we've seen are not just places where you search on crowdfunding for musicians, some of the very best ideas was crowdfunding for investment. Into business they actually had done the studies, they've done the work they had this and we're going to include ideas from all this stuff and boil it down into a set of steps that you can actually use so let's get started the question the question we're trying to answer is how do you make and raise money now throughout this whole course we've given you an awful lot of ways on how you can make money selling your music licensing merchandise shows monetizing videos grants we just talked about fame and fans skills is a musician everything on this board is fair game we gave you step by step methods to do this but there's yet one more method and that of course is crowdfunding now there are quite a few crowdfunding platforms, but with kickstarter alone and here's some statistics you might find interesting. First of all, more than one million people have backed music projects one million people ninety four million has been raised to date this is just on kickstarter thirteen thousand five hundred plus projects were successfully funded and you've got to keep in mind that on kickstarter if you're not familiar with this if you don't fund then none of them donation money gets funneled to the people who put up the project so it actually matters quite a bit on whether you funded or not let's talk about a few success stories they're really worked amanda palmer she got one point, two million, and she was only shooting for one hundred thousand natalie dawn of pompom moose one hundred four thousand just asking for twenty thousand I fight dragons one hundred fifteen thousand also just asking for twenty thousand amanda palmer's campaign in many ways has been quite a standout and those of you online who are watching now, you may want to just check out her video while we're talking about this stuff because it will actually really make sense in context. You look at amanda palmer, kickstarter, you can see her video, she did a particularly good job of it, and we're going to break apart the elements that really worked with her campaign so that you can incorporate the same ideas into your own campaigns. There's some gouaches here, though, because here's some other statistics in two thousand twelve on lee fifty five point eight percent, we're successfully funded so there's certainly a lot of times out there were people have tried to do this and it hasn't worked out. Our goal is to get all of you who decide to do a crowd can't funding campaign to carry it over the line and be successful so here's some techniques you should use to make your campaign in a success, we always start with the question, how do you run a successful crowd cunt funding campaign here's five elements that you need to put together choosing the project the right way, choosing the funding goal that makes sense choosing the platform, the crowdfunding platform that makes sense it is not automatically kick starter. There are many other options. Plan your awards and this is really critical if you do this the right way, not only when you get more people funding it, but the people funding it will actually put an even more money than they would otherwise, and you plan and execute your campaign. We're going to go through this step by step in breaking apart. Choosing the project is probably the most important part they funded if it's interesting, intriguing and compelling and it's not just about your awards, the key thing is here's what the funders want again, I want to go back to the theme that we've had from the beginning as we've talked about this throughout, you get in the head of the person you're trying to influence our market, too. So when it comes to this kind of thing, um, you need to hit all of these marks, they need to be part of the story. Part of the dream part of something bigger than themselves is what they want to be, they want to be part of your success, and so this is the qualitative part this is the qualitative part of everything here that you want to put together it's something that we can't give you a step by step method to dio but if you don't have the right kind of dream that they could be a part of, it might not work out so well in fact, there's some rules to this the projects that are successful are number one, they're achievable you don't want to put something out there that clearly is never gonna happen a concrete and understandable and fortunately fortunately putting out an album is probably one of the most common ones you'll see and it's the most concrete and understandable things that you can d'oh randi, I just wanted to interrupt while we're at this moment and in the side and make sure everybody remembers teo stick around because we were mentioning the twitter contest earlier in the last two days and we have a couple of winners that were really excited to announce and we're going to announce them next segment so I just wanted to make sure everyone stuck around because you might just be one of those winners and there's a really great friends don't go anywhere there's a great prize of a convention in the book the articles from the magazine the subscription you're going to get so stick around we'll be talking about that soon sure, no problem needs to be achievable concrete and understandable and popular how do you prove that it's popular you need social proof that will succeed we'll talk about how to do that I think some good examples this is amanda palmer's project versus bjork's project so why don't you talk about amanda palmer's project amanda promise project she was trying she had already recorded the in the context of these three in the context of the street she had already recorded her her album she just wanted to produce the album and distributed to people and go on tour as a result of this it was an achievable yes very simple was a concrete understandable if you watch her video she said this is great you know if you fund this we're going to go on a great tour if you fund this even more we're going to go on and even more incredible tour and put even more things into it visit even more cities very very clear was it popular from the very beginning she had the video out and doing a lot of viral work so is getting a lot of plays in the first place he had a lot of reason to let people believe that this basically was something that had a lot of momentum so let's take york's project would you like to take that one? Does anybody know bjork's prada? Did anybody know york did anything on kickstarter? She what was her project it was she wanted to make an album no, no wasn't enough she wanted to make on f an app for that she already having it well that's right? She wanted to make did that's right? She had a nap in a was in and I felt going up already so she already had a nap so what did she want to know? She wanted to that's right? He wanted to port the iphone half and make a windows version windows phone version and an android version wow, what a dream! So that was what she was doing was doing this. So that is the dream that she set out tio get people to buy into ok, uh we'll see achievable let's talk about achievable well, amanda's and I forget what amanda was looking for one hundred thousand, which with her fan base was achievable certainly. And then she got one point two uh I think new york was looking for a three hundred fifty thousand pounds yes was enough, which is about six hundred thousand dollars. Yes, so is that achievable? Don't know. I don't know a concrete and understandable isn't it like it's? Very difficult, but it wasn't an album, it wasn't a tour, it was this app but it wasn't really the app it was the idea that this apple is already created but now we want to do it in these other formats not very, uh understandable very confusing now like myself and then popular one of the things in researching this she didn't really use any of her social networks to actually build momentum for this thing she didn't contact their fans in that aspect now all that said it didn't fund uh did not make her money and the other thing is she's out of major league major labels kind of it's hard to feel like I'm really going to help her achieve your dream having the android and it doesn't work really we need to put something together that makes sense so that's a good way in other words, it's a it's a good example in the negative of like what not to do you want to be he definitely wanted to use a man of palmer's approach to be hit these three marks okay that said let's talk about choosing your funding goal that's the next part of our five step process remember that make it achievable now we're not just talking about a project that's achievable not something that you know you're not saying if you find me I will your cancer you know it's kind of hard to convince people that but you can say, hey, if I hit this amount of money you set basically the lowest amount you can this may seem counterintuitive you may think I want as much as possible if you make the goal achievable, you'll get more people involved and engrossed in your project, you add between eight to ten percent of what that lowest amount is because the crowdfunding platform takes a percentage. Kickstarter, for example, takes five percent and amazon takes three percent. So if use kickstarter, you need to add eight percent. So whatever your goal would be, because that part comes out of the actual platform and most people don't do that, I don't know why they don't talk about actually doing the funding the right way in order to hit that, so keep that in mind. You also want your stretch goals planned immediately in advance that's because you're now setting it. Is lois possible? You set the amount to just barely make your album, for example, and then your stretch goal might be all kinds of things on top of it, we're going to talk about these types of goals later. In fact, let's talk about a few right now tour new cities, make a vinyl record on top of the album might be something that comes out of it. It is spans the project scope, and it gives reason to share your campaign even if they've already funded it, because they would like to see these stretch goals happen as well you see how that goes, you actually immediately have here's the initial one and man if we can keep going here's what we're gonna be able to do is well, here's a key tip you announced that first stretch tickle at launch of your campaign right as part of the materials that you have now based on how this goes you choose your platform the platforms are the middle man. This is what we talked about back at the very beginning of the course very, very beginning of the course where each middleman actually has slightly different terms and slightly different percentages here's all the different things we've seen with crowd funding and that's not to say that there aren't more so you really have to do this agreement yourself fully fund versus partial fund kickstarter well on lee release the actual donations if you fully fund but I believe indy, gogo and some other platforms will allow you to partially fund your project and get the money that was donated anyway and go forward which one is better that's actually up to you you might think that the partial funds might be advantageous but what if you get three fourths of the amount you need to make an album and then all the people who donated want to see an album? How are you going to make it that's a problem there's something to be said for doing the fully funding different percentages and cuts we just talked about that different end points the funding continues versus the funding ends so there's some that allow you to continue to take donations from the page kick starter for example does not even though it might be a perfectly interesting page and you've done all the marketing and it's actually still pulling a lot of people that's interested in it they have different target audiences there are some of these crowdfunding platforms that air muchmore friendly towards musicians and they have entirely different purposes as well. So one of the ones that is very different is get my band which allows you to put out bounties to go on a tour it's not about making an album it's not about making an lp or doing anything else you might with your music business there's multiple platforms that you can choose from here's just a few of them that you should probably check out you may as well because at the beginning of your project if you're seriously going to go out there and try and raise some money it is worth your time to do this research right kickstarter indiegogo pledge music get my band sal obama leave on feed them use all these different ones octo are available for you to look into next I want to talk about planning your rewards no reward should ever cost more than you'd pay on the actual street so that means that you can't or you shouldn't actually have a reward is the digital album be twenty dollars because they're going to get pretty mad once it comes out and then everyone else is buying it for ten the whole idea is you either make it cheaper a least the same amount when you actually set your rewards up although some musicians make this mistake there's no reason you should have to do the same thing next is a bunch of reward basics there's an awful lot of facts that we found based on doing a lot of research and we're going to pull it all together for you right here the key one is the top one on this list never have her award requiring shipping said for less than twenty five dollars and we say it right here the shipping and postage will kill you this is another one of those business items that if you start thinking like a business person you start to understand wait a minute if I go out there and do this I don't want to set the price to actually cause some serious problems in fact you wanted to fit in a six by ten padded envelope because you can get them very cheaply and because they can be mailed out at the lowest rates compared to other shapes and sizes so really practical stuff here there's a lot of musicians that end up setting the price is too low and things like t shirts which may fit in an envelope or maybe a slightly larger item which wouldn't and then and you actually don't get nearly as much out of your campaign because it's being eaten up by shipping costs here's another reward tip you don't want large jumps in between reward amounts you let people find the level that they're most comfortable pledging you know it's it's kind of obvious in retrospect when you see this and we didn't even think of it either when we first started run into this but it's all of these various other people have tried all these campaigns and went wait a minute we have one thing and it went from twenty five dollars to one hundred to a thousand and then you know, there weren't nearly so many people that that pledged as you might think, well how do you get people to go between these various reward levels? How do you do this? That question goes to the heart of this slide what are effective rewards and incentives for your campaign? We want to step through it and give you examples and ideas about what to do at each level so that's similar to everything else we've given you throughout this entire course we want to give you what fits inside each slot right? Number one one dollar rewards you should always start with a one dollars reward can you think of why it adds up that's one thing but another thing is if I'm a potential donation it's person who could donate one dollars doesn't seem like much to pledge right makes it really easy for me to just join in there's another thing we have that word there upsell what we mean by that? Well soon is there on that one dollar award? They're going to start getting the e mails about the how the status of the project is going and then you're going to say things like, hey, we're getting close guys, we're almost there and they're going to remember wait a minute I just did a dollar maybe I can just do the ten dollars level and help him reach is it's actually a way to get them involved in a extremely low bar and I did and just take it back to the merchandise stuff your easiest sale is actually the person who's bought from me before so that's where this even comes in so you have to set that bar really low to invite people to jump in. Now some people will jump in that higher level of rewards fantastic great but the dollar one you have to have one it's it's ah it's crucial the other thing about it is the example this is probably the easiest one because it is a reward level you given actual reward right? A single digital digital track is really easy to do in amanda amanda palmer's case she did the entire elbow and you may or may not be able to give that much away. It depends, but at least it's probably good to just at least give him additional track. Ten yes, carson, do you get their email once the campaign is over? When it you have another person added to your your list of yeah, I'm not sure on that. I don't get I think it's good that it depends on the platform. Okay, I don't believe you do you have to keep going through the platform to get it, which is watches like, oh eventful works. Yeah, a lot of these platforms work that way because of privacy policies. Now, in order to get it, it would be a very good idea to make part of your campaign that they would register your site to get something extra seeking. Get himto come on over the question. Very good question ten dollars rewards this is probably the perfect pledge for a digital album, right? They're going to go on itunes and probably paid about ten bucks anyway, or wherever else they're going to buy your album it's probably the best price to do that. If you want to add something extra, though so it's different than itunes or any other digital music platform, right, you want to make it so that if they were funding it they're getting something that the regular guy in the streets not going to get if they buy it that's how to put that together course you can be creative here and do what you want, but from one to ten it's probably a good idea you could put wanted five dollars in between if you have the type of stuff that you could give away, that would work the next major level to aim at the most important one, though, is the twenty five dollars, reward. This is the most common pledge according to all the data that's been collected by now, so twenty five dollars is the sweet spot for most donators. Well, if that's the case first of all, the postal rewards can begin here, but of course you don't want most people to want to do the poster rewards because it's going to cost you money you'd rather have people do the digital rewards, so call it the save the earth version people I understand that putting things in and shipping it cost a lot if it's the most common amount and you can change the order that you list things make the first twenty five dollars pledge which is after all the most common kind to be a digital only reward and then the next one to be something that you ship out because you can have multiple rewards at the same price level. Does that make sense? Good. All right, so let's step to the next level greater than twenty five dollars, over and ideas your previous albums and back catalog, different packaging, different cases vinyl, usb drive, there's all kinds of things you can do here to get interesting and make it intriguing. The back catalog in particular is one that I'm really familiar with are really fondo because, you know, we have so many albums from before. It's very easy for us to give that kind of thing is reward it's digital tracks to that point, very simple. Throw that in live and of course, demos and alternate versions, which we talked about in the second session, this entire class, you can use those extra ones to do lots of great stuff. The thing is a let fans by some control, you could let fans by some control this is greater than twenty five dollars. This could be a lot like, hey, you get to choose which of the album covers we use from these three, for example, or you can put the thank you name in the liner notes. You can start personalizing things here's, another few souvenir photo book of a making of that could come out to the backstage access to one of your shows party with the band mix and match rewards from everything from before, but all of these things are available. This is another time where we can just have to tell you it's time to get creative and get interesting. We would suggest, looking at a lot of other musician based kick starters and other crown funds. Yeah, I was about to suggest that actually, that you would want to take a look at how other bands have our musicians of structured their rewards and use that to spark some creative ideas, because there's a heck of a lot of, uh, very creative ideas that have been implemented. Um especially like for albums and stuff like that, right? Okay, so we say greater than twenty five dollars, but this could be any price at all. Again, I want to remind you of what we talked about before, where you want tio graduate things little by little so it's not like you're going to go twenty five dollars, one hundred, you'll want to put a whole bunch of levels in between keep climbing up. That said, you usually want cem multiple very high level rewards. This makes the moderate level rewards seymour reasonably priced right and in fact it's a technique in a book talking about business books that are really useful another one and I think I did mention at one point called influence the psychology of persuasion by robert c al dini and he talks about the fact that in just about every major appliance line, there's always a super top of the line version that's got crazy features that nobody wants, and the reason is it makes their mid price along the one that everyone they want everyone to buy, to seem cheaper by comparison, and then they'd be able to say, you know what? They had this crazy, overpriced version, but I went, I was really smart, I just want with the middle one, and I saved money. It works and the same thing that same psychology works when it comes to the top rewards, except the nice thing about it is you can make the top rewards limited so that you can introduce scarcity. You can basically make it so that there's only a few available and so it's a limited number. And yet, as you'll see when you actually survey other musician based ones, they'll say, like zero of three year one of three people did this the personalization options air good here and, of course, don't commit yourself to something that you can't dio some, some musicians do that do not commit yourself to something like that further, someone might fund your ten thousand dollars reward you don't know, it does happen, you may as well put it out there