Why You Should Think Twice About Using Kickstarter to Raise Funds for Your Startup

Originally posted on Youngry.com I am the author

You can’t refresh the page fast enough as the numbers keep flying in every second. The second you pressed the live button, people were literally waiting to back your crowdfunding campaign. Demand had been building for almost an entire year – people anxiously awaiting launch. Tens of thousands of emails gathered on the early interest list from the landing page. A high traffic facebook page posted your video and 30 million views seemingly appear overnight. Your posted goal is $30,000 and you meet that in the first hour of the launch. All the major publications were either trying to get interviews with the founders or had already written about it like Techcrunch, Engadget, Smithsonian, Time Magazine — The first day broke $100,000 and time would only tell how the campaign did.

I was the campaign manager and had prepared the marketing plan and was managing communications. The week before I had met the founder. We took the prototype on a speedboat in Newport Beach and I brought my DJI Inspire 1 Drone with me. We got some extremely epic shots out there on the water. Afterwards, we got drinks at Billy’s on the Beach restaurant in Newport Beach.

INTERNET TROLLS CAN RUIN EVERYTHING

Everything seemed like it was flying and the campaign was raking in the money. I was having a blast marketing the product and generally being involved with the campaign. Since I was being paid as a back end commission on total funds raised, I was incredibly motivated to see this thing be successful.

And then it happened.

The video came out. With nearly a million views, the video reviewer was claiming to have technologically debunked the technology behind the product. Even though a lot of their claims were ungrounded they had a large following that believed them.

There was nothing we could do. All of a sudden all of the positive sentiment we were receiving, all of the comments all of the messages we literally didn’t have enough hours in the day to keep up with — all this and then it was over just because of this troll. People started leaving scathing comments, hateful messages. Why? The founders were just trying to make their vision come a live and make the world a better place.

YOUR REPUTATION ONLINE IS EVERYTHING

Ultimately the campaign ended up being successful but what was a $350,000 campaign could have easily been a $1,000,000 + campaign had someone with too much time on their hands decided not to completely spread a ton of negative messaging.

There are literally people profiting off of the traffic of negativity online and they will do anything to make themselves look better by putting others down.

CROWDFUNDING REQUIRES NEARLY 24 / 7 ATTENTION

If you’re one of the lucky 1 in 1,000 that experiences some semblance of profitable success on crowdfunding, that doesn’t mean it comes without a ton of hard work. You basically end up getting a crash course master’s degree in customer service. Unless you are very careful about the way you answer your backers and emails and messages, you could blow the whole thing easily.

THE PRESS IS NOT YOUR FRIEND

Don’t let the press have a reason to report negative news, because they will. Make sure to carefully curate your press releases and make sure that when you’re interviewing that you don’t reveal more information than you’re comfortable revealing. Remember, the press doesn’t necessarily have your best interest in mind. They also don’t owe you a positive article. Don’t say anything you wouldn’t be comfortable having printed. This is tried and true advice.

THERE ARE VERY FEW TRUE CROWDFUNDING EXPERTS

There are a lot of gimmicks out there. People that will take your money, often in the $350 – $1000 range offering to get you a certain amount of social media followers, or backer promotions or some kind of marketing gimmick. You will get hit up every single day while you’re campaign is live from these companies. I’ve seen too many fall into the trap. Watch out.

The true experts are not cheap. Be prepared to spend up to 20% of the total amount of money raised for their time and expertise and creative work as well as the sheer amount of ads that you need to buy in order to get the traffic you need to your campaign.

DECIDE CAREFULLY IF CROWDFUNDING IS RIGHT FOR YOU

If someone asked me today what I think about raising crowdfunding money, I would say this:

“If you’re looking to crowdfunding to raise money you don’t have, to produce a product you’ve barely figured out, you’re in bad shape. You’re better off with an angel investor to get off the ground. Even if you get the money, you haven’t created all of the important infrastructures you need to fulfill all of the pre-orders you just got. It’s a shame, but there have been more multi-million dollar Kickstarter campaigns that have never shipped their product than is societally acceptable. Millions of dollars and nothing to show for it. Instead, look at crowdfunding as the world’s most effective PR engine for startups. If you’re able to show success and grow a community, you will get noticed, just don’t rely on it for necessary capitalization if you can help it.”

Crowdfunding can be a great option for some, just think twice and think carefully before embarking down a very treacherous road. And if you do, make sure you hire an expert that can guide you and teach you from their own mistakes and experiences.