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The objective here is to figure out the absolute minimum amount that, if funded, would represent enough for you to move forward. When coming up with this number, it is important to remember that there are additional costs built into any crowdfunding campaign: (1) transaction fees, which include both credit card costs at 4 to 5 percent, and platform fees, which also tend to range from 4 to 5 percent; (2) the cost of fulfilling on your rewards. We'll talk more about these later.

Table 8-1. Calculating Your Campaign-Funding Target

Stretch Goals.
So once you meet your original funding goal, what motivates the crowd to keep going? That's where a concept called stretch goals comes into play. These are objectives added to the campaign as you approach your next funding goal. In the case of ARKYD, after we had hit the $1 million campaign target, we set a stretch goal for $1.3 million, then $1.4 million, and ultimately $1.5 million. Basically, each stretch goal promised the users more ways to become involved.

3. HOW LONG? SETTING YOUR CAMPAIGN LENGTH AND CREATING A SCHEDULE

Typical campaigns run from 30 to 120 days, though data from Indiegogo indicates that shorter campaigns (an average length of 33 to 40 days) perform better than longer campaigns.
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For comparison, the Pebble Watch was a 37-day campaign, while ARKYD was 32 days and the Tesla Museum was 45 days. As you can see from the graph below (which maps funds against time), with ARKYD there was a huge spike in the beginning, a small spike in the middle (when the campaign exceeded its $1 million target), and a big spike at the end. Such drop-offs in the middle of the campaign are typical and are the reason that stretching the campaign out longer doesn't help.

Pledges per Day: ARKYD—A Space Telescope for Everyone

ARKYD Campaign—Pledges per Day

Source:
www.planetaryresources.com

When to launch your campaign is up to you, but you should try to give the media a reason to get excited. Tying the launch to a major announcement or anniversary that turns it into a news story can help a lot.

How long will it take you to prepare? Smaller campaigns ($1,000 to $50,000) can probably be done in a month, but if you are looking to raise hundreds of thousands or millions of dollars, much longer-term preparation is critical. Following is my quick overview of how to estimate this for yourself:

The ARKYD Space Telescope campaign, for example, took us roughly four months (120 days) to prepare. Note: If you're shooting for a significant fund-raising goal, don't be surprised if you delay the launch date once or twice along the way. My advice is: Launch when you are ready. Don't create a false deadline for yourself.

4. SETTING YOUR REWARDS/INCENTIVES AND STRETCH GOALS

Rewards are what backers get for contributing. In our research, lower value perks attract more total contributions, while higher value perks raise a higher percentage of total funds. Though each campaign is different, most sites recommend offering strong perks priced at $25, $50, $100, $500, and $1,000. They report that the $25 perk is the single most claimed reward, representing nearly 25 percent of all perks selected.
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Total Revenue by Reward Level

Source:
www.planetaryresources.com

The best perks offer rewards that customers would not be able to purchase under any other circumstances, meaning they're unique, exclusive, and authentic to your campaign. Planetary Resources's “space selfie” was something you couldn't purchase elsewhere, had never
before been attempted (hence unique), and best of all, was digital—which meant fulfillment costs were essentially zero. We also packaged our offerings, combining space selfies with everything from memberships in the Planetary Society to scholarships for entire schools. At our lowest level, $10, we wanted to encourage our fans to get involved, opt into our email list, and contribute to the community. The key was to make the rewards simple, meaningful, and valuable to our backers.

Reward levels can range from $1 (minimum) to $10,000 (maximum) on Kickstarter (Indiegogo allows higher level perks). It is important to have a low-priced, all-digital, no-brainer reward at the low end because it brings people into your community at no cost to you. This has two further benefits. First, 62 percent of successful campaigns have repeat funders. Get people to sign up. Once they are in the door, you can upsell them later. Second, if your goal is to create community—people whom you can work with and sell products to long after your campaign is over—then you want them involved at any price.

If your goal is to swing for the fences and raise $250,000 or more, it's also important for you to have a compelling $10,000 reward level. We'll discuss this later, but know that $10,000 rewards are a way to get a strong jump out of the gate and help create a super-credible launch.

The final piece of advice should be obvious, but is worth stressing. Ask your community. It doesn't matter what you want; it matters what they desire. So ask them what rewards you should give away. Ask them via email, on Google+, Facebook, whatever. In the early days of the ARKYD campaign, we set up a page where we engaged our existing community, proposed rewards, and asked them to comment and vote for those rewards they liked best.

Scarcity Helps.
Take a look at various crowdfunding campaigns and you'll see that most rewards are limited in number. For example, there may be only a thousand $100 rewards or twenty $10,000 rewards. These limited numbers create the illusion of scarcity and a sense of urgency among backers; they'll want to pledge now and not later. The truth, of course, is that you can add additional rewards at any time
during the campaign, so if one of your reward levels fills up, you can launch a similar reward at an identical price.

Adding Rewards and Stretch Goals.
As I just mentioned, you can add new reward levels to your campaign along the way. This is done for a number of reasons. First, if a reward level sells out, you can add it back in at a similar price point. Second, you may learn that what you thought the public wanted isn't quite what you're offering. Thus, utilize rapid experimentation and make changes when needed. Third, you've met your goal and a stretch goal is needed. This stretch goal warrants a new set of rewards. Sixty-two percent of successful campaigns have repeat funders, and 20 percent of repeat contributions are for perks that were added after the campaign went live.

5. BUILDING THE PERFECT TEAM

Pretty much anyone in Silicon Valley these days will tell you that building a great team is the most important step in building a great product or company. The same applies to building a great crowdfunding campaign, but the components of the team are somewhat unique. Pebble Watch founder Eric Migicovsky built the first iterations of his smartwatch with three friends, all engineers. Yet as soon as Pebble's Kickstarter page went viral, he had to hire an entire external PR team to manage the deluge of attention. And it's not just Pebble Watch. Across the board, and even if you're looking to raise far smaller sums of money, these campaigns are very labor intensive. They require time and effort to plan and execute, and a great team is going to make all the difference.

Our research shows seven key team roles—five are mandatory, two are optional—that must be filled in order to give yourself the highest chance of success. That said, for a campaign in the range of $5,000 to $25,000, it is possible for an individual or a couple of people to pull this off, but if you're looking for six or seven figures, you'll need a much larger team. Here are my recommendations:

The Celebrity (the Face).
This person will act as the face of the campaign. He or she will be featured in the main pitch video, will be the voice of your campaign updates, and will lead all other public-facing efforts to garner support. This person has to be emotionally invested in the project, intelligent, eloquent, humble, and genuine. Being funny is an added bonus. The celebrity should also be an expert in the product or service you are offering. He or she will work tirelessly to build momentum in the planning, launch, implementation, and wrap-up phases of this campaign. Translated into standard organizational language, the “celebrity” could be the CEO of your company or possibly one of the more charismatic and passionate members of the founding team. Alternatively, it can be worth bringing in an outsider to lead the public effort—which is sort of what happened with the Tesla museum. The Tesla Science Center had spent eighteen years trying to raise the money to preserve that laboratory, but it was only once Matthew Inman got involved that things got moving.

Campaign Manager and Strategist.
The campaign manager fills perhaps the most important role in the campaign. From the earliest days of the planning period, your campaign manager will be running the show. After having done the lion's share of the market research, he or she will lead the development of everything from pledge levels and rewards to distribution channels and partnerships. The campaign manager will plan, organize, and manage the day-to-day logistics of the campaign for its entirety, making sure things go off without a hitch.

The Expert.
If your celebrity is not the technical wizard behind the product or service, make sure that the person who is sitting right next to him is. If you are raising money for a product, someone on your team better be able to be the expert and answer the tough questions about how you're going to make it happen. He or she will understand what you can and can't promise backers and will provide product specs, timelines, and technical explanations, giving credibility to
your entire operation. When it's time to actually develop the product, the expert takes over.

Graphic Design Lead.
I highly recommend bringing a full-time graphic designer (or design lead) onto the team. The designer will lead the development of all logos, infographics, visual press releases, video animations, project updates, cartoons, emails, T-shirt designs, giveaways, flyers, stickers, and pamphlets. Again, these are all elements that can (and should) be crowdsourced from the sites discussed in the previous chapter, but your design lead will coordinate the content. As I reflect on the ARKYD campaign, two things stand out. First, consistency is key. Our design, look, and feel stayed similar throughout the campaign, helping us scale quickly. Second, sweat the small stuff. Web comic artist Matthew Inman, aka the Oatmeal, became one of Planetary Resources's biggest affiliates. He donated $10,000 of his own money and drove an immense amount of traffic to the campaign because he saw a four-inch ARKYD telescope sticker on a lamppost in the middle of Seattle. You never know who is going to stumble upon your material, get inspired, and join your team.

Technology Manager.
Crowdfunding requires a bit of digital dexterity. The technology manager should be part IT guy, part web developer, and part videographer. He or she should be familiar with best practices in technology management. For ARKYD, our technology manager built the Kickstarter website, edited video, set up live streams and Google Hangouts, coordinated audiovisual equipment at live events, and helped integrate solutions across different platforms.