Decoding a Kickstarter Campaign for Small Business Fundraising

Decoding a Kickstarter Campaign for Small Business Fundraising

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Elyce Zahn is the owner of CocoTutti, an innovative chocolate shop in San Francisco offering a wide variety of fine, colorful products, including artisanal chocolate bars, bon bons, caramels, and truffles, homemade jams and marmalades, and nut butters. Last year she recently ran a Kickstarter campaign to raise money for chocolate molds CocoTutti needs to launch their new chocolate bar line. The campaign earned over $4,600, surpassing the pledged goal of $4,200. We interviewed Elyce about her experience running a successful Kickstarter campaign— the effort and creativity it took the run the campaign, as well as the trials, errors, and innovations that lead to her eventual success.

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How did you come up with the idea for a Kickstarter campaign?

We’re launching a new bar line and I need to have more chocolate molds. So that was the crux of it, and it’s a specific project— one of the things that Kickstarter likes to do is focus on specific projects. I had actually thought about Kickstarter for years, and I hadn’t had a project. Once the idea of expanding the bars became much more interesting and market driven, I decided that I would try a Kickstarter campaign.

A friend of mine actually asked me, “why don’t you just go for a microloan?” I said, “I don’t want to just pay the money back, I would rather do a Kickstarter.” It’s a financing as well as a marketing option. So it’s sort of a double barrel, whereas going for a microloan means basically there’s one lender, one contact, so I’m not really getting the word out there. On Kickstarter, I was able to introduce people to my company as well as obtaining the funding for the new bars – the word goes out because people can try our chocolates as rewards/perks once they donate. Also, I could send the future marketing info to my mailing list, to remind them about my company.. It had multiple positives as compared to a microloan.

What was your process for preparing the campaign?

They always recommend a video. This is part of the Kickstarter handbook on “How To Do a Kickstarter.” They recommend photos, and you fill out various categories— information about the firm, how you got started, information about the project, what you want to do, about yourself personally, and the perks (rewards).

In addition to that I sent emails out to my entire mailing list, which at that point was about 1,900 people. Then I asked people to forward my Kickstarter campaign to their lists. Some friends of mine are bloggers, so they sent the information out in on their blogs also.

How much time did you spend on your campaign?

The prep work was the most time consuming! Once the campaign is kicked off, there is nothing to do other than sending out emails. Setting up the video that my husband shot, between getting everything ready and shooting it, was probably 2.5 – 3 hours. Then all the information which was about 12-20 hours between writing, editing, and figuring out all the rewards. There was some photography that we did as well. Then reading about it, deciding whether to go Kickstarter, Indiegogo, all these other ones. I’d say plan on 40-50 hours worth of prep time.

I started in April getting stuff done and I launched in August— it took me all that time. It was the video that held me up more than anything else. If there is a particular time you need this launched by, let’s say the December holidays, and you need the money before to get going, then launch it in September or October. One great thing about the crowdfunding timeline is that the money comes in as quickly as they can collect it from the people that have become your backers— I think I got it in 3 days. If the money doesn’t come in from somebody, they’ll send you what they’ve collected, and try to pursue the person for about a week with several emails. If it doesn’t happen, it doesn’t happen but they don’t prevent you from getting the rest of the money. As long as you meet your funding goal by the deadline, you are going to get whatever money is accrued.

What would you have done differently in your campaign?

What I planned to do, and should have done in retrospect, and recommend to people who are going to do a Kickstarter in the future: “Tell them what you’re going to tell them; tell them; and tell them what you told them.” What I had been planning on doing was, about a month before the kickstarter campaign, sending out information to all of my email lists, to bloggers, and to bloggers I didn’t even know, but might know me through various chocolate events that I do (I sell a lot of my chocolates at events or wineries on a one-to-one basis). So I think about a month or so before I would have promoted the idea that my Kickstarter campaign was going to start in approximately mid-August. And then a week before the start, send another email saying, “look for our Kickstarter campaign launching next week.” Then send out information every week about it.

However I was a little too shy about it. I don’t personally like to receive a lot of emails, so I made the assumption that everyone on my mailing list was that way too. But as people later reminded me, these people want to receive information! If they don’t they’ll unsubscribe. So I don’t think I was quite as assertive as I could have been.

One of the mistakes I made is that when I was sending out my emails about the Kickstarter, I incorporated it into an email with events that I was going to be at so that people could come and buy chocolate. This was just too much information. That was one thing I would not to again — do the Kickstarter info separately from any other email you do. If you’re doing an electronic newsletter, at least have the Kickstarter as the headline and not buried in the newsletter with other information.

The bottom line is that I would have been less shy.

What would you recommend to other business owners seeking funding through Kickstarter?

A recommendation is that if it’s something like a Kickstarter campaign that is going to involve thousands of dollars, consider getting somebody who has a specific experience with Kickstarter campaigns beforehand.

After starting my campaign, about a week and a half in I had about half the money, but then it slowed down. A person emailed me and, for $60, they went in and helped promote through Kickstarter. That did in fact help get me more people. Had I known about this in advance, I would have had somebody work with me before the kickstarter campaign. The person I worked with was able to jump in and get it going within 48 hours. However, I had talked to Kickstarter consultants as the campaign was going on who need 3-4 months before the campaign launches in order to get their marketing going.

So again, you need to look into consultants about 3 months in advance. Some Kickstarter consultants are very very successful in promoting campaigns, others not so much. So it would be a good idea to check with their customers to see if they felt that it was really worth it or not.

Where did most of your backers come from?

My emails! Me email list contains a lot of people that were already familiar with CocoTutti and wanted to support.

There were a lot of people from my email list who didn’t understand how to donate to a Kickstarter. So I actually had to create a step-by-step email explaining how to donate. I ended up sending that email to 5 or 6 people during the last week. So another piece of advice is to be mindful of who is in your email list; if there is an older group, also consider an email fairly early on in the campaign explaining how to contribute.

What surprised you about the Kickstarter process?

I think it was really the amount of effort that it takes to promote and market the campaign. It was really astonishing to me. I did a pretty big variety of perks (rewards), so I really thought a couple of those big perks were going to go, and none of them went. So it was really the lower-cost perks that went, the ones between $20-$100. So I think there was more marketing involved than I expected, and I came to that realization later in the campaign. Whatever you can do to get that word out in advance, get people set, get people primed, the better.

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What’s the next step for you in terms of funding?

My personal next step is to start looking for investors. Now I’ve heard from some people that, depending on what their project entails, this is a good opportunity for investors to see how popular their project is. There are some Kickstarter mega-success stories, that investors will hop on in and say “well, you were able to raise X and you were able to go 300% above, so obviously there’s an interest there and I’ll kick in Y separately.”

It’s a matter of finding someone to work with and sorting out what the investor wants, what their long term goals are, and what your long term goals are – This is a whole other project. You need to be careful with this, be honest and tell them that this a slow grow and in the end we’ll slow grow together, but it’s not going to give you a 200% return on investment in 6 months.

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About the Author — Lydia serves as Content Manager for Nav, which provides business owners with simple tools to build business credit and access to lending options based on their credit scores and needs.

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