CREATING A CROWDFUNDING CAMPAIGN: Goal and Timeline
These are the two most critical parts of a campaign if only because they CANNOT be changed once you launch.
The goal is the minimum amount needed for your campaign to move forward and collect money from your backers. You could set a $100 goal and reach it (but no one would take you seriously). You could set a $1 million goal (and probably not reach it for the same reason).
You don’t need to deliberate over your goal, but know that once it is reached you are under financial obligation to move ahead with your project and deliver to your backers. So if it takes $20K to actually put your project into production, but you set your goal at $10K and hit it… well, you better find $10K from somewhere else.
If you only need $5K to put your project into production, yes you could set your goal at $5K but don’t forget to take into account what you spend on advertising, Kickstarter’s %, your credit card processor’s %, the cost of your videos/photos/copy, not to mention the dozens of hours you spent (and will spend) managing the whole process.
This is how I have approached it with clients in the past (example converted to abstract):
- Widget costs $5 each with a minimum of 1K units. Add packaging, shipping, etc. the minimum you need is $6,000 to get the units in hand from the factory.
- Video and photos cost $1K, advertising cost $1K, so $8K hard costs (not counting anyone’s time).
- Let’s say your product will be available to backers at $20 each. If you set your goal at $8K (hard cost) you would need to fulfill 400 units… and have 600 left over from the initial order. Kickstarter prices are always lower than retail (that’s part of the appeal), so let’s say that you can go on to sell 300 via e-commerce for $25 each after the campaign and 300 wholesale for $12.50 each. That is $7500 (retail) and $3750 (wholesale) = $11,250
- So you calculate your goal for your crowdfunding campaign, it can be helpful to think of it in terms of “unlocking potential.” Spending and setting your goal at $8K unlocks the potential for you to make $11,250 on top of that if you plan to continue selling after the campaign. If your project is a “one and done” affair, then you can adjust your goal accordingly.
It is important to have a “reasonable” goal. If you can hit 20% of your goal within the first 24 hours, your campaign has a high likelihood (80% chance) of being fully funded. That is why I advise going for the minimum viable goal… with some padding for expenses and the unexpected instead of starting off with a stretch. That’s what stretch goals are for: higher levels of incentives that are unlocked if your campaign hits further milestones, e.g. if we hit $25K everyone gets a free widget accessory pack, if we hit $50K we unlock a new color option.
To get to 20% as quickly as possible requires preparation and coordinating efforts immediately after launch.
Kickstarter recommends a max of 30 days for campaigns. If you don’t know how long you should go, default to 30 days. But I suspect most campaigns could be OK at 21 days.
Here are some factors to consider:
- If you do a proper amount of prep, your campaign will START strong. After all, that’s the whole point of prep. You want to hit 20% of goal and then 100% of goal as quickly as possible. The better your prep, the stronger your campaign will start.
- For some massive campaigns ($1 million+ yields) they have dedicated marketing and PR running the whole time, and can keep momentum going (and growing). If your campaign is self-run, it’s tough to build momentum over 30 days, but you can (alternatively) inject urgency with a shorter timeline.
It’s hard for 30 days to be wrong, but if you can run a 21 day campaign it can be easier to keep up the buzz for the whole campaign.