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I’m excited to bring you something you have been asking me for. You have been asking me to bring an expert on Kickstarter, Indiegogo and startup funding. You’ve been asking me for an expert and I brought you one. I found Will Ford from LaunchBoom.com. I am excited because he’s got so many that he’s run through that he’s got some great stats and you know how I love stats. I love actionable items that come from been there and done that information and he’s got that for you. Will, thanks for joining me.
It’s great to be here. Thanks for having me, Tracy. I want to thank you for inviting me on the show. I want everyone to understand that we’ve been crowdfunding longer than any other agency out there. Since I’ve started the company, we have launched more successful crowdfunding campaigns on Kickstarter and on Indiegogo than any other agency in the world.
You’re not just saying that, but you are on their homepages.
If you go to Kickstarter and Indiegogo, go to their Experts page, you’ll learn all about LaunchBoom and you can see a lot of the projects that we’ve launched. Every single day, we have entrepreneurs, inventors, anyone product specific who will reach out to us who’s interested in crowdfunding and everyone always has the same question, “Will, how do I launch a million-dollar crowdfunding campaign?”
I want to step back a little bit. How did you get excited and interest in the crowdfunding world? It’s hit and miss. How did you get started there?
I am a serial entrepreneur. I have built three companies. I’ve sold three companies. I started LaunchBoom after I sold my last company. It was a company called PetBox. It was a subscription eCommerce company and one of my advisors who helped me exit the deal and sell the deal asked me to help a Navy SEAL launch a consumer product. I said, “Have you ever thought of launching on Kickstarter?” He said, “I have no idea what that means.” He said, “What do I need to do?” I said, “Just give me a small budget for Facebook and Instagram advertising. What I’m going to do is I’m going to figure out what the demand is and who the customers are before we go live on Kickstarter.”
We’re going to talk about that now because it’s the before that is critically important. How do you launch a million-dollar crowdfunding campaign?Only certain things work for certain platforms. Click To Tweet
I get that question every single day and the truth is we never launch any crowdfunding campaign until we understand how to control the outcome. What I mean by that is LaunchBoom, the core of our business is digital marketing. What we do is we’ve built a systematized process. It’s a predictive model, and what we do before we launch any project is we take it through a 30-day test pilot. All that means is that we’re figuring out the messaging, the positioning and then we’re testing everything.
We’re trying to figure out who the customers are that want to buy any specific product that we’re launching and then based on the data, we let the data drive the process. We build more content specific to those best-performing audiences. We’re spending 30 days figuring out what the expected return is going to be from any advertising budget to support a million-dollar crowdfunding campaign.
That is interesting because what you’re doing is you’re saying, “Only certain things work.” If anyone of you has read my articles on Kickstarter, you’ll know that that’s what I keep harping on. I keep saying that only certain types of products or certain types of campaigns work well on Kickstarter and/or Indiegogo or any of these crowdfunding platforms. They’re very specific and they have certain metrics and formulas and other things and you found them in terms of being able to predict them ahead of time.
It took years to build the system. It’s been working well since January 2017, but it took me years beforehand to build it. It wasn’t easy and it was a lot of trial and error, a lot of testing. What we’ve learned is that we can figure out, based on Facebook and Instagram advertising, how much demand there is for any product. Then what we do is we run it through a 30-day test pilot. I call it Test Boom because it’s more in line with my branding here at LaunchBoom. What we’re doing is we’re taking it through and we’re understanding what the expected return is going to be from every dollar in the system.
Every dollar you put into LaunchBoom, I need to know that I’m getting three or more out in actual sales before I get excited to come into a full product launch and spend another six to eight weeks behind it building the videos, scaling the ads and engaging the audiences with email marketing. I only turn on the campaign when I can control the outcome. I’m setting a goal that I know I can exceed within the first 24 hours after we launch, whether I launch on Kickstarter or Indiegogo. When I do this, we outperformed the thousands of live campaigns on those platforms and it literally pushes our campaign to the very top of the rankings on those platforms.
How soon should someone come to you? Do you start before the 30 days? I’m going to call it funnel-marketing. It’s any kind of marketing where you’re doing an ad and you’re sending people somewhere to do something and possibly doing multiple steps in the process. I’m assuming that’s what you’re doing from Facebook and Instagram, to find out the information that there is some kind of process flowing from there, right?
That’s exactly right. I always tell everyone the reason LaunchBoom is set up the way it’s set up is being an entrepreneur, I know how hard it is to launch any type of product, especially consumer products. I know more importantly that it can be risky financially if you’re not crowdfunding because you’ve got to put all the money into tooling and manufacturing. You’ve got to come up with a clever marketing strategy and launch plan.
You’ve got to have a great brand. You’ve got to put some money on your branding.
You’ve got to put money into branding and you’ve got to make sure that you’ve nailed your strategy because if you don’t, you can be underwater fast. What I’ve done with LaunchBoom is I’ve created a system that makes it really affordable and really simple to test any idea that you may have. To answer your question, I like to work with entrepreneurs, inventors, and business owners once they have a good enough prototype. It doesn’t have to be a perfect prototype, but it has to be a prototype that they understand and know how to manufacture because once I have that prototype, I can create some basic images around it. I can build up my marketing assets. At that point, that’s when I’m ready to do my testing.
To answer your question, about three months before a product launch, that’s the ideal time for me to get started. What I do is I take it through a 30-day test, the test checks out, I can show data showing a big demand, then and only then do we go into a full program and we put a larger budget into it. What I’ve learned is that the only difference between a $100,000 campaign and a $1 million campaign is it comes down to having access to larger advertising budgets that more importantly performed better. Based on the model we have today, we know even after the test what the expected return is going to be. When you reverse engineer the numbers, we understand what the margins are.
You understand what the average order value of that product is going to sell in the marketplace for and then you also look at the cost per lead and the cost per acquisition. What I’m doing during the test is once I get people to opt-in saying that they’re interested in us notifying them once we’re ready to launch, I then say, “You can guarantee the best discount today.” I have them pull out credit cards and transact with us before Kickstarter and before Indiegogo. What we’re doing is we’re pre-selling the pre-sale on Kickstarter and on Indiegogo. We built a huge engaged audience that’s hyperfocused, so when we turn it on, we literally can sit back and watch the money pour in.
I’m assuming you do need more than a prototype. You need an anticipated pricing too. Someone needs to know how much this is going to cost them and tooling costs them. They need some of that and a lot of them don’t have that. I assume that’s why you mentioned to me that you see about 300 startups to launch ideas a month and only half of them are potentially ready.The ones that fail did not do their homework before. Click To Tweet
The Test Boom program, in all honesty, is probably the most important work we do for any of our clients because the very first thing we do is we send out a messaging questionnaire. This messaging questionnaire is where we get all the information about that idea, about that product. What we do internally is we do a deep dive and we do our own market research and we look at what truly makes that product or idea superior than anything else currently out there. Then we look at pricing because we have to help them figure out how to price it so it’s competitive in the marketplace.
Once we get all that nailed down and we build out the messaging and we identify the audiences we want to go target, then we build and create the assets and then we go out and we test it all. We’re even testing pricing during that Test Boom so by the time we get through that 30-day test, not only do we know who the customers are, but we also know exactly that sweet spot when it comes to pricing and more importantly, understanding what that profit margin is for our clients.
That’s where a lot of Kickstarters do fall apart in the early days especially because they didn’t dial in and get it. They have a prototype and they think they know what it’s going to cost, but they don’t have an understanding of what it’s going to take to make that, what it’s going to take to land that, what it’s going to take to deliver that, and they don’t have that in. Then they discover that the price isn’t working. They lower their price and now they’re in trouble because their profit margin wasn’t there.
You nailed it on the head. Part of what we like to do, even before we even think about going live on Kickstarter or Indiegogo, we like to understand who the manufacturers are and what the turnaround time is. As long as we have all those variables up front, by the time we launch, we can always deliver a great experience. One thing I’m learning about these crowdfunding campaigns, these backers that come in and buy these products and pre-order these products, they’re very loyal. The reason I’d say that is most of our clients aren’t just one hit wonders, they’re launching multiple products a year.
If we’re launching multiple products under the same brand, we’re finding that we’re getting larger and larger convergence off those initial backers, whether it’s a first campaign, second campaign, third campaign, and we’re getting bigger and bigger outcomes and better return on the new ad spend to support the new products. Backers on Kickstarter and Indiegogo are very loyal as long as you do two things, you deliver a good product on or ahead of schedule.
Those are the big publicity problems that we see with Kickstarter and Indiegogo, a lot of them. To me, the ones that fail because of that, they failed because they did not do their homework before they ever would have seen you. That prototype wasn’t ready for prime time. They didn’t get a decent manufacturer behind it. They didn’t get those things in order because I’ve seen them.
One of the aspects I’m most proud of my entire team at LaunchBoom is we have never not delivered a product that we’ve launched.
You’re screening applicants well and looking through that and making sure that they’re ready.
Not only screening but more importantly, making sure we launch when everyone’s ready to launch. As you said, a lot of people get excited. They want to get the product to market and they haven’t thought through everything necessary to ensure that it’s going to be successful. If you launch and you don’t know how to manufacture and you upset your early backers, it’s probably going to be an uphill battle.
Let’s talk about some key characteristics because you and I had a little chat about this when I first met you. Backers are not the same as consumers in the mass market. The shoppers and backers are two different types of people and you had to dial in psychologically as to how you advertise in psychographically in some ways about how to get to them to understand it. That’s why maybe some products aren’t a good fit.
For us, I’ve only worked with consumer hardware, physical, tangible products. I have a lot of people reaching out to me with good software development ideas or they want to make apps. They’re great ideas but for me to get excited, it’s got to be a tangible, physical hardware, consumer product. Then secondly, the reason we’re so laser-focused on our vertical crowdfunding is we’re learning that we have a huge advantage. Anyone interested in crowdfunding, the reason a lot of them choose LaunchBoom is because we have huge, massive backer email audiences in our database.
Every time we launch a product, we’re able to retain a copy of those backer audiences. We can’t just send an email to our next client because that’s called spam. We don’t have permission to do that. The strategic advantage we have, the moat that protects our business model is these hundreds of thousands of backer emails in our database. What we can do with them is we can plug them into our Facebook dashboards. We can create lookalike audiences, we can do direct targeting, and all that means is that everyone in our database has had a good experience. We’ve never not delivered.When you're a startup, you have to build that all yourself. Click To Tweet
Product Launchers, you may not understand that. If you don’t, that’s okay. Target consumers are very different from Costco consumers. You have to rely on the fact that someone like me who has designed for them for decades already knows what they’re like and what they’re likely to buy. In his case, what he’s got is he’s got a database of what they are and he can create a lookalike audience that will show them and find other people like them. That’s valuable because when you’re a startup, you have to build that all yourself. You cannot do that. It’s so much money to do that. You will waste lots of dollars going through the wrong audiences until you find the right people.
Tracy’s got a huge point there and I’m glad you brought that up because a lot of the work that Tracy and her team have done over the years is they’ve designed for big box retail. They’ve done some big projects. Everything I’m creating from a marketing perspective, ultimately it doesn’t matter to me what Indiegogo or Kickstarter are expecting. What I’m designing, I’m designing for Facebook and Instagram. I’m trying to create content that has a better chance of going viral because if it goes viral, your return on that ad dollars is going to go through the roof. It’s going to allow us to draw so much more backer support from those monster audiences that are on Kickstarter and Indiegogo.
A lot of people don’t realize this, but Kickstarter has over 40 million monthly unique visitors every month from around the world looking for cool stuff. They’re willing to give you money now as long as they’re the first ones to receive the product and they’re going to get a discount. On the other hand, Indiegogo isn’t far behind them. They have close to twenty million monthly unique visitors each and every month. What’s interesting is a lot of people come to me and they go, “Where do we launch, Kickstarter or Indiegogo?” That’s usually a conversation we have once we understand the work. What’s interesting is the space I’m playing in, it’s changing and evolving very fast. When I first started, we used to only launch first on Kickstarter and then as soon as that was over, we would launch on Indiegogo in demand.
You do back-to-back campaigns. That’s interesting.
You can but what’s happened, which is interesting, is we’ve been launching more of our projects first on Indiegogo and running Indiegogo campaigns and skipping over Kickstarter because we’re getting much stronger conversions and we’ve run more million-dollar campaigns this year on Indiegogo.
Where do you attribute that to? Is it just that Indiegogo gained its ground and it starts to hit its stride because it was behind Kickstarter in terms of starting or they had too many failures?
I’ve spent a lot of time at Kickstarter offices in Brooklyn, New York. I spent a lot of time with Indiegogo, they’ve got offices in New York, as well as San Francisco. That’s where they’re headquartered. The reason why I believe Indiegogo is taking a much more competitive approach to the market opportunity is that they have a huge campaign support team, whereas Kickstarter doesn’t have that and that’s not a focus for them. What Indiegogo is doing today, which is so much better, is they’re reaching out to our campaigners earlier before launch and they’re offering support, they’re understanding the products, and they’re driving a lot more traffic internally once they know we’re ready to launch.
That’s a smart strategy on their part because their whole financial model depends on your success and the greater your success, the better they do as well. That’s smart that they are doing that rather than like, “We’ll leave it up to you.”
Kickstarter, back in 2016, filed as a B-corporation. What’s interesting is that they’re taking a very different approach with where they’re going. They don’t care as much about having those huge million-dollar campaigns. They care more about supporting those social causes that are going to promote social good.
I would have thought it would have been the opposite like Indiegogo, you think indie films. You would have thought it was the opposite.PR is good if it's executed properly. Click To Tweet
Indiegogo’s taken a totally different approach, which is much more in line with what we’re focused on here at LaunchBoom. We love hardware. Indiegogo loves hardware and they’re investing a lot more resources into this outreach team.
I have to tell you, Will, you’ve converted me right now. I’m about to bring my partner over and have a discussion about the new product we’re about to launch with you. I have to tell you that he’s going to think I drank some weird Kool-Aid or something because it’s not something that I would ever utter out of my mouth that we will ever do a crowdfunding campaign but we may do that.
You asked the question about the key with any million-dollar campaign. A lot of people come to me, “Will, I need a good PR strategy.” Honestly, PR is good, but I’m leery when it comes to PR because I’ve worked with hundreds of PR agencies and a lot of it are smoke in mirrors. They sell a good story, but then very little comes to fruition.
Here’s why, and I’m going to tell you this because I’m in the media. I write a column for Inc. and because I write product design in the innovation section, I cannot tell you how many Kickstarter and Indiegogo pitches I have received over the last three years that I have written this column. I have never written a story about a campaign until it was over. There’s a reason for that and that is because our editors hate it. If we go on the record with supporting a campaign and then they don’t deliver or there’s a problem or it’s a fraud, we can’t remove that article we wrote. They do not like it. They do not want us to write about it.
It is a forbidden territory and also because there’s a lot of fraud and a lot of kickbacks that go on in the PR industry. It’s a quid pro quo kind of thing where, “I wrote an article for you and then you are going to write about my clients.” There’s a lot of that that goes on. What happens is they think almost all Kickstarter articles or articles about product launches, startups like that are paid to play and so that’s also forbidden at most major publications.
It’s a good point. PR is good if it’s executed properly. I do have a handful of PR teams that focus on crowdfunding campaigns that I’ll introduce my clients to. The truth is you want to launch a crowdfunding campaign when you have your own audience that’s engaged and ready to buy. If you don’t do that today, it’s going to be a headache. It’s going to be really hard.
Product Launchers, you hear this from me all the time. I always say there is no proof in people saying, “That’s amazing. We love it. It’s cool.” There’s only proof when they plunk down some money on it.
At the end of the day at LaunchBoom, ultimately the reason that the core of what we do is digital marketing is that we can control it. We literally can understand what the data indicates, showing us how large demand is for any product in any category. When that demand is big enough, only then do we commit to a full product launch and put larger budgets in. The truth is, Tracy, even with your products that you’re designing, you should use my Test Boom program for all of that. I can show you the data and be like, “This is going to be huge. This is a million-dollar campaign.” Before you go and put a bunch of time and money and resources into anything, you want to know that you’re going to win. What I’ve done is we’ve built a predictive model that we can test anything for a very small amount of money. The full price of that program is $7,500 and $2,000 of that goes into the advertising budgets.
We’re talking about pretty low cost in the scope of things because we normally don’t talk price here on Product Launch Hazzards, but I’m glad you did. I want people to have a budget in mind for this because it is a costly thing. We hear all the time that the average budget for running a Kickstarter campaign is $25,000 plus. Overall, the ones that are successful, what are they spending?
That’s why I’m not interested in running a $100,000 Kickstarter campaign anymore. It’s so hard. It takes a lot of time, a lot of resources and honestly, it’s not that big enough. It’s not a large enough volume that’s going to help that potential product go to market in a way where there’s going to be real profit behind it. What’s more exciting for us is when we can deliver more million-dollar campaigns. There’s huge volume now. With larger volume, with economies of scale, you get better price breaks with your manufacturer. You’re able to make a bigger margin and walk away with a bigger profit that you can reinvest back into your business without giving up equity.The difference between a successful product isn't a great idea, it's the system that you put in place to execute it. Click To Tweet
Who wants to give up equity that early in the game? It’s hard to make a sustainable business after that, a sustainable brand.
It supports your point where you don’t want to write an article about a crowdfunding campaign if it’s going to fail and not deliver because now that’s your credibility that’s being tarnished. I get it. I totally get it.
This is so eye-opening to me as to where we are in this world.
For me, prior to crowdfunding, prior to Kickstarter and Indiegogo, every time I’d launch a consumer product, I was the one taking all the financial risk. To do it properly, to be able to sell a large enough volume where I would have a chance of getting into big-box retail or doing well on Amazon, I would have to put up the dollars. I’d have to put up at least $100,000 or more.
Your chance of finding an investor or getting enough credit to be able to do that is hard.
It’s hard and the scary part was if I was wrong, I was the one losing all the money. I was the one upside down underwater. It was scary. Launching products can be scary. The reason I built this Test Boom model is that I would put $7,500 against any idea all day, any day, to have someone come back and tell me who the customers are and what the demand is.
They can also tell you not to do it because of the amount of time lost to me, that’s nothing.
I’ve had clients where I’m like, “The data is not good, don’t do this,” and they’re like, “Thank you. Will, I’ve got another idea. Let’s do it again.”
The amount of dollars you’ll spend in saying, “I’m going to go forward anyway,” and you end up tooling for it and the inventory and then it doesn’t move, that’s crazy. There is an exception and that’s one of the exceptions I want to talk with you about because I want to make sure that we’re clear there. There’s a mismatch between Indiegogo, Kickstarter and women consumers. A lot of products for women don’t play well on the crowdfunding platform. Sometimes, that happens.
Let’s start there because you’re spot on. When you look at the demographics, at least based from the data we’re looking at, the majority of the audiences on both Indiegogo and Kickstarter are primarily males ages 25 to about 45 years of age with an average annual median income of $100,000 or more. That is probably the main reason why female products don’t perform nearly as well as some of the other cool tech gadgets and whatnot that are more focused on the male audiences.
This is not a ground to say. If you’ve got a product like this and if you’ve seen my presentations, if you’ve gone and watched and you can watch it on the platform, my Prosper Show presentation and I talk about a razor and an eyelash curler that were launched side-by-side on Kickstarter at the same time. Which one succeeded and which one didn’t? Even though the eyelash curler was a much better cooler product with more appeal, it’s not always indicative of whether or not you’ll make it in the consumer market because the consumer market is flipped. The consumer market is 86% women. We have to keep that in check for us and remember that.
You’re correct on the female audiences. That’s not always the case. All I tell anyone is if you have a product that may be focused on that type of demographic, the female demographic, I’m still willing to test it. In fact, I’m willing to test everything.
Even if you’ve spent $7,500 to test that out, because you’re doing your tests on Instagram and Facebook where there are a lot of women, you could still get a lot of information back about how to market it, how to sell it, even if you decided not to go to crowdfunding route at the end of the day.
More importantly, I’ve also taken female products through that program and the demand has been overwhelmingly positive and then I’ve taken it through crowdfunding. We’ve done phenomenally. That’s what’s cool but my system is focused specifically on crowdfunding and if my test checks out, we go for it. If my test didn’t check out, we kill it.
I love that it’s info-based and it’s systems based. You know how I feel about this. The difference between a successful product isn’t a great idea, it’s the system that you put in place to execute it, that you get it launched with. You have the right things in the right order with the right resources and Will is one of those. Will, it wouldn’t be a Product Launch Hazzards interview if I didn’t ask you, what are some of the biggest hazards, the biggest failures you’ve had with some of the campaigns and things that you see that go completely wrong before you got it successful?
The biggest hazard is what made my company the best today in the world and I mean that. Before the test, I would say, “Tracy, I love your product. Give me $50,000 and I’m going to turn it into $500,000 or more in sales and we’re going to do that for Kickstarter, Indiegogo and our upselling.” We use BackerKit for upsells, where you can do about 30% to 40% increase in sales after the crowdfunding. You’d say, “That’s a lot of money, where’s it going?” I’d say, “Tracy, $25,000 is going to go into our hard costs, we’re going to do all the work, we’re going to do the messaging, the video production, the email marketing, we’re going to manage the campaign, the backer updates, everything. We’re your partner.”The problem becomes the solution. The problem forces innovation. Click To Tweet
Then you’re like, “I get that. Where’s the other $25,000?” The other $25,000 goes right into Facebook, right into Instagram, to build those huge audiences before we go live. This is why we’re called LaunchBoom because we set a goal that we control, we turn on the campaign, we blow that number out of the water immediately. Now we’re the best performing campaign on the platforms. Then we get free organic traffic to the tens of millions of unique visitors on those platforms, which helped boost our sale into the hundreds of thousands and potentially millions of dollars range.
In all honesty, that worked throughout 2015, 2016 most of the time. When I say most of the time, eight out of ten times it would work like that, but there was about 20% what I would call failure. What that means is that someone would give me $50,000 and we’ll start building videos and all these assets and then we’d start micro-testing on Facebook and Instagram and the demand wasn’t there. When the demand is not out there, we do more micro-testing. If we can’t find demand, we don’t have a choice, we have to launch in order to help recoup those dollars for the client. The problem is that we wasted so much time and to manage that type of expectation, it’s brutal, it’s painful, especially when you know your client’s going to lose money potentially.
In January 2017, it’s when we redesigned the entire model. This is where we said, “We’re going to test everything first.” We’re going to spend 30 days, we’re going to get a fraction of that budget and then once we have the data, that shows us that we can get a 300% or greater return on the ad spend because that’s our focus then and only then do we take bigger budgets and we go into a full program launch and we all spend time because now it’s a sure thing everyone’s going to make money. The biggest hazard that we struggled through in 2016 at LaunchBoom has today made our business better than my wildest dreams.
The problem becomes the solution.
The problem forced innovation, it forced us to build systems and to build this strategy of testing first. In all honesty, you’re right. Even if the product doesn’t graduate into a full program, our clients thank us for saving them the time and the headaches and the capital.
I’m so glad and I hope you’re going to fully join us here as an expert and talk about things like the BackerKit and help define these things over the time so people can ask you questions on our platform. In the meantime, you will be able to easily find Will because he will have a profile on Product Launch Hazzards, as does everyone who has been a guest expert on our show. You will be able to connect directly with him and find out all about his company and all about his program and you’ll be able to be one of those 300 that he evaluates next month. Will, thanks again for joining us and I’ll be back next time with another Product Launch Hazzards.
You’re great, Tracy. Thank you.
- Indiegogo Experts Page
- Kickstarter Experts page
- Tracy Hazzard’s Prosper Show
About the Authors
Will Ford is an American Entrepreneur, Angel Investor, and Crowdfunding Expert who has raised millions of dollars to bring innovation to life. Will has dedicated his career to helping early-stage startups and Entrepreneurs succeed.