Monthly Archives: August 2016

The Best Tips for Successfully Marketing Your Crowdfunding

It’s all about the money. When it comes to getting a new product off the ground, raising money for a cause, exploring growth opportunities for your small business and building your brand, crowdfunding offers a nontraditional way to reach non-conventional investors.

Crowdfunding reaches a larger and more diversified pool of interest than many standard methods of raising capital. It invites investment at any level, small-dollar and big. And, it helps you do something new and important for yourself and your investors. Plain and simple, it just makes sense to explore the marketing side of crowdfunding.

I recently chatted with Mark Thimmig, chairman and CEO of the Ignite Agency, experts in Kickstarter, Indiegogo and equity crowdfunding, to learn more about the art of crowdfunding campaign marketing.

Six Marketing Essentials
Here are six essentials culled from our conversation to keep in mind before getting a crowdfunding campaign started.

1. Straddle the fence. Crowdfunding is all about capturing the personal ethos of the campaign — a connection between message and emotion. However professional it looks and sounds, your marketing has to separate itself from the corporate impression with something casual, humorous or sentimental. If your message is somehow too proper and perfect, the audience might wonder why it requires crowdfunding.

2. Make it worthwhile. The object of the campaign has to come across as special or unique. It should embody an element of innovation, need or scarcity in any market. Scarcity drives the demand for any product, so you have to offer some exchange for the participation. It might be a T-shirt for helping fund a charity walk, or equity participation in a startup, or even an early model of the product (if it’s a physical gadget). But, creating marketing reciprocity must have a felt quality that takes more than just convincing language.

3. Build momentum. Every campaign needs an end date. At some point, the funding has to stop. So, several tracks run in sequence:

You need a calendar to plan your strategy for the action and implementation.
During the period before launch, it’s the campaign owner’s job to generate as much interest as possible. Usually through collecting emails and marketing to them.
Lastly, a specific marketing event launches the period of funding.
Your strategic thinking has to visualize this rollout. You might, for example, peg your calendars around the date for the specific marketing event. That date cannot conflict with competing events like religious holidays, seasonal distractions, equity market activities and more. It’s to your benefit to make your launch stand alone.

4. Write a narrative. Everyone involved should follow the same script. They should all know the story of how things started, where you want to go and how you intend to get there. Your story needs an explanation of why you are pursuing crowdfunding as opposed to other investment strategies and a description of how the funding will make a difference.

It’s also important to respect the needs for copywriting. That is, your team has to brainstorm the language repeatedly until you can reduce the message to one quotable phrase. Then, all parties must be able to speak and write briefly from no more than four to five talking points.

5. Make it multi-dimensional. Content copy is important. It has to convince and persuade. It needs to testify with proof and credibility. Be sure to support your pitch with facts, figures and specifics on costs, forecasts and expectations. You’ll also want to make this a media event, something that goes viral across many a platform.

That takes vivid visuals, such as photos of people interacting with the product, commitments by key principles, testimonials by end users and so on. Finally, well-educated and entertaining videos of prototypes in action, users involved, or analysts’ comments will help your campaign go viral.

6. Improve your image. You must have some evidence of a positive past, some proof that things are ongoing. That said, your initial strategy must include development or improvement of existing marketing media. You might revitalize your website to complement and support the language and visuals of your planned campaign. Brochures, logos, business cards and other collateral material should reflect the evolving pitch and maintain a consistent branded look and feel.

It’s also the right time to think about social media and which social networks make the most sense for you strategically. Demographics research will tell you which audiences crowd Facebook, LinkedIn, Twitter and more. More serious research might interest you in networks conceived for financial advisors, realty investors and other specific markets. Bloggers and influencers are also very important to help promote your offering. Finally, you might look into the accelerator worlds available through AngelList, Gust, Indiegogo, Kickstarter and more.

Do the work and deliver.
As Tanya Prive wrote, “There is a huge misconception that creating a successful crowdfunding campaign is as simple as hitting ‘submit’ and waiting for it to go viral.” With strategy and commitment, you can reach people throughout the world bypassing banks and professional investors. You spread the risk among many contributors, building loyalty and customers among them. Ultimately, this relieves you of the major business investment burden.

While the opportunity is expansive and promising, it takes work that starts with exploring the qualitative marketing challenges of crowdfunding. In the end, perhaps one of the most important crowdfunding essentials is to deliver on your product and promise.

Information About Money Metric You Might Not Know

Paul Graham, founder of the accelerator Y-Combinator, coined a term every startup should know: default dead. It is a pretty simple concept. Assume that your expenses and revenue growth remain constant, and now fast-forward into the future: Will you run out of money before you turn a profit? That means you’re default dead. (And if you will escape the red before running out of cash, congrats: You’re default alive!)

This isn’t just an academic exercise. Go ahead and graph your monthly expenses and revenue over time, and find the point where they (hopefully) intersect and you become cash flow positive. The amount of money needed to get there — between now and profitability — is the amount you need to secure from investors or other funding sources. And until you can get that funding, you’ll need to concentrate on growing revenue and keeping your operation running on the cheap. By carefully monitoring this graph, a default dead company can track its performance on a month-to-month basis and react to negative changes, such as the breakeven date suddenly moving from one year to two years.

The VC firm I work for has invested in two Y-Combinator companies, and I noticed that these startups evaluate this metric constantly to help them prioritize their time and brainpower. After all, few can rely on a bottomless cash hoard like Uber does with its $8.71 billion raised. The rest have to take their short-term future seriously. I’ve been particularly impressed by how these Y-Combinator companies know their respective default dead status and its fluidity. This keeps their teams aware that, unless important changes are made, their operations right now aren’t sustainable. They may even need to chuck their original business model and go in a new direction. They understand, better than most startups I’ve seen, that revenue forecasts five to 10 years in the future are great to drool over, but they mean nothing if the money runs out in the next two years.

So when you find yourself starting a company where expenses exceed revenues — which is pretty much every startup in history — make sure you evaluate and pay attention to this important status. If you realize you’re going to be default dead for years and years (or decades, in the case of Amazon), your daily priority should be running a lean operation and soliciting more investment. Don’t bother deciding how much to spend on the company holiday party.

The First Big Mistake From 3 Entrepreneurs

Entrepreneurs look back on the blooper they thought would kill their company.

Sandy Chilewich
Founder and creative director, Chilewich

“Back in 2000, when I was just starting, I emailed a buyer at Bloomingdale’s, pitching my place mats. And I don’t know if placemats just wasn’t in my computer’s dictionary, but each time I typed that, it changed to placentas. I didn’t notice and sent it. So I wrote this buyer a lengthy email about how great my placentas were, and how many colors my placentas came in, and how durable my placentas are. I sounded like a madwoman. I never heard back from that buyer, but Bloomingdale’s is now one of our biggest customers.”

Jason Horvath
Cofounder, Uhuru Design

“After 10 years of growing slowly and deliberately, in 2013 we got a $500,000 investment in growth capital and did some marketing, and the following year we sold $10 million. Then we lost focus. We decided to launch an interior design department as well as a jewelry line — a total vanity project — and hired more than 50 additional employees. Sure, we had sold $10 million, but then we spent $10 million, and we entered the next year with very little cash. Growth flatlined — we lost $1.5 million in six months. We had to pull back, lay off some great employees and shut down projects. But now we know what we’re good at and how to manage growth.”

Nathan Bond
Cofounder and CEO, Rifle Paper Co.

“My wife, Anna, and I launched our stationery company in 2009, just in time for the holidays. We had no background in this space and had never worked with a printer. We thought we could send them a file and the product would arrive in perfect shape. But what came back was totally unusable. Even after multiple production attempts, our cards came back with ink smears all over them. We had to make it work, though, so we erased the errors by hand for hours — sitting in a room, in a cloud of eraser shavings! We learned a lot, including how naïve we were.”

Some Strategies for Influencing the Affluent

So you have a product or service that caters to the rich. The clients you want are ultra-wealthy, extremely busy and pretty much untouchable. While every business faces gatekeepers of some sort, those who sell to the affluent face impenetrable fortresses of staffers, handlers and security teams, who make it their job to keep people away from their bosses.

Reach beyond your grasp.
So what do you do if the person you wish to do business with is simply inaccessible? One option is to follow protocol and go through the lines of defenses, pitching your product or service to layers upon layers of decision makers. That could take years. The other option is to create a strategy for influencing the people you wish to work with: the uber-rich, ultra-wealthy, untouchable millionaires and billionaires.

Here are four simple strategies to influencing the affluent:

Open your Rolodex.
Michael Carucci, a Boston-based luxury real estate broker who only deals in multi-million dollar homes, says his secret to influencing the affluent is that he does much more than sell real estate, he opens his rolodex to clients long after the deal is done. Michael has helped his high net worth clients get children into elite schools, get their books and products on national television programs, and obtain impossible to come by red carpet tickets. He says even the affluent need access to hard to get people and things, and he’s created a reputation for delivering that.

Interview them.
It’s going to take a very long time for you to get past the myriad of gatekeepers if you reach out and try to sell something. Instead, try reaching out and asking your ultra-rich potential client if you can interview her for a blog, company newsletter, or other type of periodical. I’ve interviewed more than 300 high net worth business tycoons, athletes, and celebrities. I use tools like the premium membership on LinkedIn to contact them directly. At first contact, I don’t ask for business; I don’t try to sell; I simply ask for an appointment to interview them for an article. The interview is my access, and from there I build long term relationships which often result in business.

Influence their influence.
Shanna Dickerson of Blue Sky Luxury Concierge offers concierge services and event planning and promotion for elite clients around the country, including Richard Branson. How did she score the crème-de-la-crème of clients, Richard Branson? Easy, she was already doing business with someone who influences Branson, and she asked for an introduction. It’s a lot easier to get someone’s ear when you get introduced through someone they trust.

Hang where they hang.
So you may not be able to afford a house in a gated community or a private jet sharing membership, but there are other places the ultra-wealthy hang out. A good place to find them is at country clubs, sports clubs, high-end gyms, and charity events and galas. Furthermore, if you have two hours to kill, instead of booting up your computer at the local coffee shop, make yourself comfy in a corner nook near the bar at the swanky five star hotel, where your chances of running into a potential new affluent client increases by tenfold. It’s much easier to create conversations and get appointments when the people you are trying to influence consider you one of them.

Volunteer or join a board.
Some of the most valuable relationships I’ve made with high net worth friends all started with a passion for a charitable initiative. Find a charitable cause you are passionate about and dig in deeply through volunteering and/or board membership. Non-profits tend to attract people from all economic strata who are passionate about the cause. If you are targeting a particular affluent client, find out what causes he is passionate about and get involved.