Once upon a time, as a budding entrepreneur looking to fund your new endeavor, you'd have been entirely at the mercy of your bank manager. But this process—like hundreds of others—has been completely overhauled by enhancements in online technology.
In contrast to the original bank manager model of one party stumping up a large amount of capital, crowdfunding relies on a large number of small backers contributing modest amounts—sometimes as little as $1. The end goal is to raise enough money through these small donations to bring your project to fruition.
In return, backers are rewarded with a package that's commensurate with the amount they've contributed—t-shirts, early access, exclusive product add-ons and more.
But there's really more to it than this.
At the risk of getting all misty-eyed, what backers are really buying into is a vision. Invariably, the successful campaigns are the ones that clearly articulate and effectively sell that vision. It's not just about the product you're looking to bring to market—it's about why.
- Why does your product matter?
- How will it enhance peoples' lives?
- What's your vision for how it will ultimately make the world a better place?
Video: The Competitive Edge
The online crowdfunding sector is dominated by Kickstarter, with over 88,000 projects successfully funded by nearly nine million individual backers (to the tune of over $1.8 billion dollars)
And one of the well-known characteristics of a successful Kickstarter campaign is that they tend to include video. In fact, projects with a video component succeed at a higher rate than those without, by a rate of 50 percent to 30 percent.
Why is this?
For one thing, videos are displayed extremely prominently on the page. They're pretty much the first thing potential backers will see, and pressing Play is the first logical step for users to take.
From there, it's all about the unique capacity of video as a communicative device. There's perhaps no greater online storytelling mechanism. You can write all the marketing copy you like, but a great Kickstarter video pretty much puts you, as an individual, in the room with your potential backers—giving you an unrivaled platform not only to explain your product and its benefits, but to talk about yourself; your inspiration, your motivations and, above all, your vision. Backers can see and hear you—building a powerful sense of empathy and trust.
Your video is a 3-4 minute blank canvas that allows you to paint a very clear picture about what your idea is, why it matters and why your backers need to invest in you.
In the sweltering heat of summer, there's nothing better than a cold, refreshing drink. Unfortunately, keeping your drink cold when you're out in the sunshine is pretty much impossible. The ColdCan uses Cryogel—the same material as used in NASA's spacesuits—to deliver a solution that's truly space age.
There's a lot to like about this video. It clearly establishes the problem, explains in detail how the product addresses that problem, and it's all done in the unique voice of the product creators. We're able to clearly get a feel for the team behind the ColdCan; their passion for the product is abundantly clear.
Anyone who's had experience with sports supplements will know that shaker bottles can be a real pain. Powder often turns clumpy, which makes them difficult to clean and, in turn, gives them an indescribably bad smell.
The TITAN Mixer bottle has been engineered to overcome all these problems. Again, the video explains clearly how this problem is overcome—and we see the team of people who are responsible for its innovation.
Everybody loves a steaming hot tea or coffee. But did you know that one day of unnecessary energy use from the overfilling of electric kettles, is enough to light all the streetlights in England for a full night? The guys behind Mitio do—and they make sure you do too in this epic Kickstarter video.
Miito ensures you only boil as much liquid as you need, allowing you to boil them directly in the vessel of your choice. The themes of our other two examples are present here. The story of the product is clearly explained by the team behind it, and it's easy to feel attracted to the compelling brand story presented.
The way we fund projects is changing, and crowdfunding has become a powerful vehicle for financing new projects.
Clearly the money is in the ideas behind these products. But video is undoubtedly a key part of communicating those ideas, and arguably the most important. And these videos tend to have certain things in common:
- They lead with an emotional appeal, the most successful products have a clearly defined function.
- They tend to be narrated by the founder, the person behind the product. Personality is a big deal in any investment. This allows you to sell your vision and your personality. You can demonstrate your passion and build trust and empathy.
- There's a connection to real-life environments. We see the product at work in the real world.
- We usually get an insight into the creation process: where did this idea come from? How has the founder gone about bringing it to life? What has been the story so far? This makes it clear that this isn't just a half-baked idea that someone has posted onto Kickstarter with no real thought so far.
- They have a professional approach. Even when shot on a budget, the film quality is typically really strong, which again sends out a powerful message that this is a legitimate product that is well worthy of your investment.
So next time you have a million dollar idea, get your story straight, follow these rules and Kickstart it with video—it's definitely a winning combination.