Search Reactor Ideas
CategoriesFrom Our Teams (3)
From Thought Leaders (5)
From WIN Staff (4)
Interactive Media Events (2)
Interactive Media News (2)
Start-Up Seattle (1)
A little over two years ago I wrote an article on crowd funding that went something like this, “There’s change in the air. The smell of money. They whisper about it in hushed tones. Kickstarter. Money just waiting to be scooped up.” And so on.
But here we are, a little more than two years later and, not surprisingly, things have changed. The reasons why companies might consider crowd funding remain largely the same, but the money is not quite so easy to come by. Marketing and getting your message (and your product) in the consumers eye is MUCH more difficult.
Some things that remain the same:
1. Crowdfunding is STILL fundamentally an exercise in consumer marketing and as such, brand and vision matters.
Whether it is an existing IP, an individual with a personal brand, an innovative look, or an understanding of your target audience, to be successful at crowd funding is to fundamentally understand what it takes to motivate a consumer to action. How to present consumers with a credible case why you are the right company to deliver this product, instilling confidence that you can, and conveying your vision and personality in a compelling and likable manner are all key.
Taking your customers on a journey from barely-awareness to desire. In about 5 minutes. When you have a brand, or are yourself a brand, communicating these becomes much more straightforward.
2. Crowdfunding requires commitment
The minute you launch your crowdfunding campaign, the clock starts ticking. If you’ve prepared well in advance, you should have a small (or large) army of friends and supporters rushing to be the first to respond and, at the same time, help spread the word through traditional and social media contacts. To say nothing or press, blogs, and the new darling of marketing: Youtubers.
But that’s just the beginning. Now the real legwork associated with any campaign begins, because launching the project is just the opening gun – you’ve still got a proverbial marathon to run. Your core task now isn’t just to keep chatter surrounding your project alive – it’s to sustain and nurture that buzz, ultimately serving to make it grow even bigger. Not a day should go by that you (and your friends and partners) aren’t updating, tweeting, posting news, calling on prospective patrons, handing out promotional cards, or any combination of the above in order to help promote your project.
“You launch and then there’s a very large commitment in terms of responsiveness that’s required… It’s vital to answer questions, stay active on comment forums and provide running updates. Keep up with personal correspondence. Keep up with questions. You have to be mentally prepared for that.” – Jordan Weisman, Shadowrun Returns
Some things have changed dramatically:
1. Marketing and PR are MUCH harder.
To be clear, PR and marketing for consumer products (be they games, breakfast cereal or crowd funding campaigns) has always been hard. But now, especially among journalists there’s an element of Kickstarter fatigue. Where before it was easy to get journalist to write about anything having to do with crowd funding, because just to even engage in such a campaign was a novel event; now it’s extremely difficult to get their attention. In addition there are some projects which have raised significant amounts of money only to fail to deliver the product that was promised and it may be the journalists no longer feel like it is in their interest to be associated with promoting products that might ultimately fail.
2. Consumers are more skeptical, and the bar has been raised.
Two years ago, it is fair to say that the consumers attracted to crowd funded projects perhaps did not look as carefully as they should have at the bona fides of the individuals offering up these uncompleted projects, and in some cases that has led to disappointment. Over times, as in any marketplace, the consumer becomes more sophisticated and demanding of “proof” that a product (or it’s creator) can live up to the hype. And with that has some a greater expectation of transparency. In the case of Distance, a game crowd funded locally by the developer Refract (a participant in the WIN program) keeping the community “in the loop” has been a goal of their post-campaign engagement as the work to finish their product:
“Overall, there are lots of little things we’re doing to help, but we’re putting a lot of focus on being as transparent with consumers as possible while reaching out to those who’ve been so supportive in the past.” – Jordan Hemenway, Refract Studio
3. Consumers have more options
In the past, Kickstarter was the “Go-To” site to engage in crowd funding. It had both the brand identity, and the most registered users in it’s system. Now, there are a variety of options. Since the barriers to entry to setting up a crowd funding site are low, there have been a profusion of new sites that have spring up (Indiegogo, Patreon, and others) giving prospective product designers more funding options, but also diffusing the audience amount many more sites. And for games, the 800-kb Gorilla arrived on the scene last year in the form of Steam Early Access. While you have to have running code to be on Early Access (so if all you have is a video and a vision you’re not going to get very far) all indications are that Early Access has had a significant impact on consumer spending on pre-release/in-development games. Undoubtedly it is drawing away dollars that might have otherwise gone to other crowd funded games on sites like Kickstarter. Likewise there are other venues for game developers to utilize for crowd funding, such as building their own sites and operating their own crowd funding “stores”. Games such as Star Citizen have been able to raise close to $60m in this manner. So this is both a real and viable way for premier branded talent and companies to fund their games, but also a drain on the ecosystem of traditional crowd funding aggregators. So a new decision that you as a prospective crowd funder have to decide is whether to use an existing site, build your own funding site, or perhaps build enough of your game that you can bring it to Early Access and start selling your product while it is under development. Or some combination of these strategies.
So, when thinking about crowd funding as an option for raising funds for your enterprise, keep in mind that while it remains an option, the bar has been raised in terms of how much investment of effort on your part is required to undertake a campaign, how much transparency you should expect to maintain during and after your campaign, and above all, be realistic about how much you ask for and whether it will be sufficient to deliver on the promises you have made.
~ Jon Kimmich is CEO of Software Illuminati, a consultancy to digital media and entertainment companies, and a contributor to and the editor of The Crowdfunding Bible. In a previous life his job was to spend Microsoft millions to acquire game companies (such as Bungie Software). You can follow him on Twitter @JonKimmich.