How I Raised $120,000 with Crowdfunding
I thought about building Realmac's next product the way we always do. Spend 6 to 18 months building an app in secret while using the revenue from our other products to keep the company going. Ship it once it’s perfect, then pray to the gods that people buy it so we can stay in business. Rinse and repeat.
I’ve been playing this game for a long time. Building, shipping, and praying. The pressure of having to ship one hit app after another gets to you. Too many misses in a row and the business fails. This wouldn't be so bad if it was just me, but it's not, there's a whole team of people relying on the business to be profitable. This is why I started to look more seriously at Crowdfunding.
Crowdfunding flips the traditional method of building and shipping software on it's head. It removes a huge amount of the risk that's usually involved when developing new products. Crowdfunding makes the whole thing a more open, transparent process, and importantly you get the revenue upfront to help build your vision. It’s a very refreshing approach. I used to be very cynical of Crowdfunding, but having gone through the process I'm now convinced it's a viable route every indie should at least consider.
It’s not just about getting revenue upfront though, it’s about building a community, letting people get involved with what you're building. It’s also a form of validation. If enough people back your project it means there’s a reason and a need for your idea to exist. This validation is great, and incredibly motivational.
Even though Kickstarter seems to be the go to site for crowdfunding, I decided to go with Indiegogo. There was one main reason for this. Indiegogo offers flexible funding, this was something I wanted to take advantage of as I had no idea if Typed.com would even hit its goal. The flexible funding option allows you to keep any money you've raised even if you don't hit your goal. This is not an option with Kickstarter. I knew I wanted to build Typed.com regardless, so some revenue to help would be better than nothing.
Even though the campaign is over, the product page is still visible on Indiegogo. Here's the main pitch:
Typed.com is a blogging service for writers, journalists, artists, storytellers, and for anyone with something to say. It’s the online writing platform that we’ve been wanting to create and use for years.
Online services come and go, but we want to make something that stands the test of time. We want Typed.com to be around for decades to come, and with your help we can make this happen. We can build a blogging platform that’s sustainable and enjoyable to use.
I spent two weeks planning and building the entire campaign. I started out with the video as I knew this would be a huge amount of work and to be honest, it was also something I wasn't entirely comfortable with doing. Every popular campaign I looked at had a half-decent and engaging video. I did a lot of research and it turns out the flow of the video should be something like this: Introduce yourself, talk about the problem, move onto the solution that you're building, and finally finishing up with a direct plea asking for pledges. It was also suggested that the important stuff should be in the first 20 to 30 seconds. Peoples attention spans on the internet are very short, who knew?
The final video ended up being just under 2:30 minutes long. As of today the video has had 25,000 plays. You can watch it below:
Thankfully I already owned a DSLR, tripod, and a few different lenses. I decided to buy the rest of the equipment needed to shoot the video in-house. Here’s the full list of kit I used:
- Cannon 5D MKIII
- Canon EF 50mm f/1.2L USM
- Canon EF 24-105mm f/4L IS USM
- Walimex 100-170cm Boom Stand with Weight
- Rode NTG3 Shotgun Microphone
- NTSM3 Microphone Suspension Shockmount
- Zoom H4n & 5m Pro-Audio XLR Male to XLR Female
- Manfrotto Mini Compact Stand x 2
- Westcott Ice Light LED x 2
- Final Cut Pro X
And yes if you had to buy this all upfront it would be very pricey, however you could make do with a lot less. You could get away with shooting it all on a recent iPhone. If you go down this route you should invest in a decent microphone, audio makes all the difference to the perceived quality of the final video.
As it was the first time I’ve shot anything like this it took me an entire week to shoot and edit the video. I found the tutorials over at Wistia to be really, really helpful. It would have been quicker and probably cheaper to get someone in to do the video, but now that I've made the investment in the equipment all future videos will cost next to nothing to produce.
Everything I read on how to make a successful campaign page said that is should be super detailed with plenty of graphics for everything. It honestly seems like you can’t include too much information, just take a look at any funded campaign.
I dropped Indiegogo an email during the two weeks I was setting things up to make sure they were aware of the project and see if they could offer any feedback. I did this because they obviously know what works, but also I wanted to make sure our project was on their radar. I knew Indiegogo sends out regular emails to thier users highlighting new projects and I figured typed.com would never get featured in this if they didn't know it existed…
Deciding on the perks was one of the trickiest aspects of the project. I studied many other campaigns looking for what worked and what didn’t. Most crowdfunding projects seem to be based around building physical items, this made it hard to find any comparable software based projects. In the end I settled on a range of perks, everything from $10 all the way through to $5,000.
When building the perks I wanted to make sure they were good value for money and had enough benefits that people would want to contribute. I set limits on some of the higher more expensive perks because I wanted to create a sense of urgency, but I also wanted to control the flow of perks that offered lifetime accounts — Too many free lifetime accounts could drag typed.com down in the longterm and make the service unsustainable.
I was surprised when the time came to launch the Indiegogo campaign as there is literally no review process. You just hit publish and it's live right away. Maybe I found it so odd because I’m so used to the App Store process.
Launch day got off to a good start… that was until PayPal locked down Realmac's account. This then meant the only way people could contribute was by credit card and this definitely hurt sales, I noticed a big slow down while this was going on. I phoned PayPal and tweeted at them and actually managed to get the account unlocked within a few hours. The orders resumed and all was well again, until it wasn’t…
PayPal blocked the account again, this was just hours after unlocking it. Ugh. They now wanted scanned copies of my passport, driving license, and utility bills. After frantically finding and supplying these the account was unlocked again and things were back on track. Having this go on during launch was super stressful.
The day ended on a high note, as the campaign started trending on the Indiegogo home page. At around 7pm, less than 12 hours into our campaign it hit the goal of $20,000 (USD).
Typed.com didn’t get as much press coverage as I’d have liked at launch. I think this was because it was a crowdfunding project for a web app, not a native app. Here's a collection of links to some of the bigger sites that were kind enough to give us coverage: Engadget, The Next Web, MacStories, MacNN, and iMore.
Over time some of the higher tiered perks started selling out. People obviously felt they were good value and as there was a limited number available it added a sense of urgency. As they sold out we added similar perks at slightly higher price points. This got messy, very quickly.
Towards the end there were too many perks. In hindsight I should have just set the limit higher, but I had no idea they would sell out so quickly. The higher perks definitely performed better than I ever imagined. The breakdown of where the revenue comes from is interesting, the Founding Member perk ($350) was the most successful. This makes up 30% of the total revenue.
As with all product launches, the biggest spike in revenue took place at the launch of the project. Throughout the campaign I posted on Twitter and sent out timely emails to Realmac's mailing list (around 250K subscribers). Without the existing mailing list I'm not sure it'd have raised half of what it did. Typed.com was featured in one of indiegogo’s newsletters and that definitely helped give it a nice bump.
The campaign was supposed to finish on February 27th. As interest in the project was still high Indiegogo reached out to asked if I wanted to extend it for two weeks. I agreed, and while sales definitely slowed down it was still worth it and helped push up the total raised considerably.
Now the campaign has run it’s course, everyone at Realmac is focused on the real work of finishing Typed.com and delivering on everything we promised. The software is in good shape, I run this entire site on it as well as the Realmacs blog. All backers now have access to an early beta of Typed.com, and while it's still missing a few features and some polish it's stable enough for people to use. We're also gaining valuable insight from people using the product this early in the development process. You can read some of the backers first impressions here.
If you’re part way through building a product or just starting out, I can’t think of a valid reason why you wouldn’t turn to crowdfunding. It’s product validation, marketing, community building, and revenue all up-front, before the product is even finished.
If you have any thoughts or questions about this article, please feel free to @reply me on Twitter.
I think the Typed.com campaign would have failed had I blindly walked into it and not done my research and read everything I could find on the subject. If you plan to try and crowdfund something, do your homework first. Here's some of the best resources I found while planning the campaign. Good luck!