Before You Crowdfund, Kickstart, or Otherwise Ask Fans for Money, Please Read This

The music world just had a ‘moment,’ and it was brought to you by Amanda Palmer.

Which almost guarantees a huge increase in artist pitches, music projects, and other music-themed Kickstarter ideas ahead.  Which, in turn, almost guarantees an influx of Kickstarter failures ahead.

Part of the reason is that Amanda Palmer arrived with a pre-established fanbase and a solid revenue stream, though she obviously also understands crowdfunding culture.  Which means that Kickstarting or crowdfunding with a smaller, developing audience is a much trickier game.  “If you launch projects without a large pre-existing fan base or well-known brand attached, risks appear to be greatly magnified,” explains Scott Steinberg, author of the recently-released book, The Crowdfunding Bible.

That’s right: there’s now a book dedicated to this very topic, one loaded with analysis and best practices (there’s a free download available, here).  And chief amongst those are questions you should be asking before you start your campaign, whether it’s a music-focused game, jazz archeology project, or simple album release.  Author Scott Steinberg poses twenty.

“There are several factors to consider if you are thinking about using a crowdfunding model to finance a business, product, project, service or event.”

1.  How good is your idea – really? Are you certain that people will be interested in it?

2.  Why is your product, service or venture destined to sell – what value does it offer the customer?

3.  What differentiates your project from existing competitors, or alternatives that have come before? Are you utilizing an existing brand, IP or personality that has a pre-existing base of fans or consumers? (Using an existing, if perhaps older, brand or IP which consumers have fond memories of can be a very effective strategy.)

4.  Can you express your idea simply and at the same time get people excited about it?  If not, it may be that the idea isn’t all that compelling, or that you may not be the right person to communicate or present it.

5.  Do you have something tangible to show when presenting your venture – some visual aspect of your project that can help other people visualize it?

6.  How well do you know and understand your target audience?

7.  Do you have confidence in your ability to reach out and connect with potential backers?  Have you planned which vehicles you will use to reach out and connect with them?

8.  Have you calculated just how much money you need – truly need – to get your ideas off the ground?

9.  Have you factored in all financial variables, including the costs of reward fulfillment, payments to the crowdfunding service, and taxes?

10.  Have you been sensible enough to build a budget that allows for breathing room in certain areas, and factors in conservative projections?

11.  Are you positive that you can fulfill all your promises, including completing the project in the allotted timeframe, and delivering on all features and content covered in your pitch? Have you considered the impact on your product’s brand identity, or your own personal brand, should your campaign not succeed?

12.  Do you have some great rewards in mind to give backers and fans incentive to donate?  Have you mapped out your reward tiers? How will you offer these rewards, and what dollar amount will you attach to them?

13.  Can you offer meaningful rewards at a variety of investment levels to attract all potential patrons?

14.  What specific or unique rewards will you use to get people talking? Can you create any singular ones that can be utilized in social media campaigns or for press outreach?

15.  Do you understand all the personal and professional demands that the process of running a crowdfunding campaign demands from creators? Are you prepared to put 110% effort into making your crowdfunding project a success?

16.  Do you have at least some marketing, public relations and social media connections and savvy?

17.    What promotional campaign activities do you plan to pursue leading up to and during launch? How will you keep the buzz going after your crowdfunding project debuts?

18.    Are you ready and able to take a big personal risk?

19.  Do you – and at least a few other people you can look to for support, whether financial, emotional or otherwise – fully believe in your project?

20.   Who can you turn to for help, whether in terms of assistance with asset creation, financial backing, raising awareness or just help spreading the word?

“Most importantly: Have you examined other crowdfunding projects – both successes and failures – to understand which approaches, techniques and strategies work or tend to result in failure?”

If you can satisfactorily answer all of these questions with a straight face, and believe with certainty in your ability to deliver on all, there’s a good chance you can be successful…”

9 Responses

  1. Avatar
    @benjikrogers

    This is missing a key point: “NEVER ASK YOUR FANS FOR MONEY!”

  2. Avatar
    Self Employed Dude

    This author should have applied his own theory to his book/article. All these points have to do with common business startup concerns and have nothing specific to do with crowd funding. If a person can’t answer those basic business questions they will fail no matter what. And if we re talking basic business structure, there are better in depth books you can spend your time on like ‘No More Mondays’. This seems at first glance like a bandwagon book.

    Example, doing a kickstarter involves putting yourself out there at personal risk? As opposed to performing in front of people, or self funding a record, or trying to find label or sponsors through constant rejection. Has this guy ever done anything in the music business, or just watched? There, I am the stupid bashem in the comment section guy. 🙂

  3. Avatar
    Nick strongbox

    There is a key difference between crowd funding sites like Kickstarter and Direct to Fan sites like Pledge Music. Pledge doesn’t ask fans for money ….

    Thats why Pledge has successfully helped hundreds of artists make and release albums, hundreds not dozens.t

  4. Avatar
    Steph

    This a good article on crowdfunding. People nowadays just list their projects on crowdfunding sites without really doing their homework. Crowdfunding it is work, just by listing your project or cause does not mean you are going to get the funding you need. I came across the following webinar given by Rock The Post founders where they explain in detail the mechanics of crowdfunding.

  5. Avatar
    crowdfundingstrategies.wordpre

    Great article. Great info for potential crowd funders. I think that Amanda Palmer’s kickstarter campaign is a good example of a perfectly executed and managed crowd fund. She has an existing audience, great perks, awesome pitch video, and she stayed connected with her backers.

    Scott Steinberg’s free ebook is a must read also. http://www.crowdfundingguides.com

    My blog: http://www.crowdfundingstrategies.wordpress.com

  6. Avatar
    EarlyShares.com

    Great checklist !

    Equity Crowdfunding is going to revolutionize the U.S. Economy.

    It can also help the music industry (ex. local bands crowdfunding a local recording studio and owning a part of it).

  7. Avatar
    Den

    I did the math and it just wasn’t worth it in the end. He mentioned adding up all the costs involved. Taxes are the one that most people don’t even realize! All that money you raise is taxable income. It’s been a while back that I did the math so I don’t remember exactly but I think it was something like 40% net by the time all the costs were taken out. I funded my own.