By Sherri Buri McDonald
The Register-Guard, Eugene, Ore.
WWR Article Summary (tl;dr) Crowdfunding is a great way to support women entrepreneurship. From kickstarter to indiegogo to Gofundme, there are plenty of platforms to choose from. Successful crowdfunders say the secret to success all comes down to telling a good story and capturing the attention of the audience. If you want to raise money for your crowdfunding campaign, really take the time to create a thoughtful, creative video.
The Register-Guard, Eugene, Ore.
Kickstarter or Kicksputter?
The difference between Kickstarter campaigns that soar and those that flop boils down to preparation, good storytelling and engaging the public, according to a Kickstarter official and local entrepreneurs who’ve raised money using the online crowdfunding platform.
About a dozen Oregon Kickstarter success stories joined Terry Romero of Kickstarter recently at the Hult Center in Eugene for a program on how local entrepreneurs and artists are using Kickstarter to bring their creative projects to life.
About 400 Kickstarter campaigns have been launched in Eugene since Kickstarter was founded in April 2009.
They include fashion designer Katie Brown, electronics startup Lumidax, hat maker CowBucker, and bicycle maker Bike Friday, among others.
In 2014 alone, 29 Kickstarter projects in Eugene raised $317,058, according to a recent report entitled “Pacific Northwest Capital Scan.” The median amount raised was $5,105, said John Hull, the report’s lead author and executive director of the Business Innovation Institute at the University of Oregon’s Lundquist College of Business.
Numerous crowdfunding platforms, such as Indiegogo and GoFundMe, have emerged in recent years. But Kickstarter leads in the Pacific Northwest, with about a quarter of market share, said Skip Newberry, president of the Technology Association of Oregon, a sponsor of the recent Kickstarter event.
Crowdfunding is poised to play an even greater role. Global crowdfunding surpassed early-stage venture capital investment in 2015, Hull said.
Entrepreneurs, filmmakers, designers, musicians and others are drawn to Kickstarter because it’s a way to get financial backing for their ideas without giving up ownership.
“Kickstarter is not an equity platform,” said Romero, keynote speaker at the Big Mix v2 event held in Eugene on March 12.
“The beautiful thing about it is as a creator you still own what you do,” she said.
So why would people contribute to companies without a chance for financial gain? People pledge money on Kickstarter for projects that intrigue them and products that they want to have, Romero said.
“I think there’s immediate emotional excitement,” she said, adding that she has backed hundreds of Kickstarter ventures, some at just $1 as a show of support.
Another advantage for entrepreneurs is that while they are raising money, they’re building a community of fans and potential customers. Entrepreneurs also can incorporate backers’ suggestions as they develop products.
“If you’re wondering are people going to like this,” Romero said, “these early adopters are going to give you direct feedback.”
Some contributors may continue to back a creator on subsequent projects.
“The community you raise through Kickstarter is going to last longer than the money you raise,” Romero said.
She noted that some computer game developers, for example, turned to backers to successfully launch a series of Kickstarter projects.
“You’re creating a community who are hungry for your next cool thing,” Romero said.
Kickstarter authorizes most projects that apply, with the exception of charity works and prohibited items, such as guns, Romero said.
Campaigns last one to 60 days. Creators collect backers’ money only if they meet their goal. Kickstarter charges a 5 percent fee of money collected, plus a payment processing fee of 3 percent to 5 percent of the amount collected.
About 40 percent of projects across all 15 Kickstarter categories, from art to technology, get funded, Romero said.
Of the projects that don’t meet their funding goal, about 15 percent don’t even have one backer, she said.
Videos are an important feature of Kickstarter campaigns. Creators use them to introduce themselves and explain their projects.
“Storytelling is key on the site,” Romero said. “You need to understand how to tell your story in a compact, fluid way to the average person.”
In crafting a pitch, “get away from ‘help us’ language,” Romero advised. “Instead, ‘join us. Come along (on) this crazy ride. We’d be so honored to work with you.'”
She advised spending at least three months planning a campaign.
“Great projects don’t happen by accident,” Romero said. “They require advanced planning.”
Mike Whitehead, founder of Finex, a Portland-based maker of cast iron cookware, offered three do’s and don’ts to Kickstarter hopefuls. He raised $342,000 from about 2,400 backers in two Kickstarter campaigns.
“You’ve got to have a (creator) video,” he said. “It has to look smooth … but it can’t be slick.”
“You have to have a need, but you can’t be needy.”
“You have to be confident, but not cocky. You have to find that 1 percent of yourself that’s likeable. People are not backing the product. They’re backing the guy or the woman behind it.”
Among the highest-grossing Eugene Kickstarter campaigns was Bike Friday, which raised $135,000 late last year to produce its Haul-a-Day cargo bike.
Bike Friday raised three times its goal of $45,000, which surprised the management team, president Hanna Scholz said.
“No one on our team had done crowdfunding,” she said. “It was a new experiment.”
Key to the campaign’s success was its creator video, Scholz said.
“Telling the story is really important and having a good product,” she said.
“We had lots of pictures of people showing the bike in real situations. A woman hauling her Christmas tree home from the lot. A bike carrying a wheelbarrow. Photos that showed us and our factory. It was fun and engaging.”
The project had 186 backers. Of those, 109 bought a bike in advance, by pledging $999 or more.
Before launching its campaign, Bike Friday did online research, checking out successful campaigns, Scholz said.
The company chose Kickstarter over other crowdfunding platforms because Kickstarter seemed to have the most traffic and backers trust that Kickstarter’s platform encourages creators to finish their projects.
Bike Friday benefitted from having an established customer network, which it could fold into its campaign, Scholz said. About half of its Kickstarter backers already were in the company’s customer database; the other half were new to Bike Friday.
It helped that the Haul-a-Day is an unusual product that can be shipped anywhere in the world, she said.
It’s a big advantage for small companies to plug into Kickstarter’s established platform and brand, Scholz said.
Bike Friday is considering launching another Kickstarter campaign for a second bike, she said, declining to give details.
Scholz said backers’ input is one of the most valuable parts of Kickstarter.
“There’s always a ton of stuff to put your resources into,” she said. “This is a quick way to find out is it worth it, or not worth it?”
Many people associate Kickstarter with startups, but established companies can use it too.
“I think there are a lot more established brands that are starting to use the platform,” Scholz said. “It is an amazing option for market research and funding new development versus the old-school ways.”
