“We were lucky to have our friends over at The Grommet introduce us to crowdfunding experts. Jeff Schwarting and Daniel Falabella are adjunct professors at Brigham Young University and created the first crowdfunding class ever taught at a higher-ed business school.
Here’s what they had to say about crowdfunding, Kickstarter and EdTech:
Q: How did you come up with the idea to start a crowdfunding course?
A: It was totally by accident in reality! Daniel had the idea to start an internship or program at BYU where students run a company with the idea that it would be the same company year after year, but we’d switch out the management each semester with a new set of students. This initial idea eventually morphed into having students start a new company on Kickstarter each semester. The goal for this course is to get students to go through the full cycle of entrepreneurship– start from zero, create revenue and fulfill and deliver a product– in a semester. It’s hard to accomplish that in 4 months, so crowdfunding is the mechanism we chose to achieve that goal. It’s still a really tight timeline and its a crazy amount of work to get done, but it’s possible. Our first time experimenting with this we started with 9 students. The students were able to raise $49,000 in revenue on Kickstarter and shipped 600-700 units of product! This semester 130 students applied but we were only able to take 22.
Q: Does crowdfunding strategy change based on the field you’re trying to target with your product?
A: Strategy changes quite a bit whether you’re in education, non-profit, a foundation, or have a cool physical product. The reason being is when people have designed a new product and they’re crowdfunding on Kickstarter to get it off the ground, backers usually perceive it as pre-sale. Interestingly, Kickstarter doesn’t really encourage that. In fact there are many blog posts from Kickstarter saying that it is not a store. That said, you have much better chance of being successful if you build a product that people want. From an education perspective, depending on what your project is (ex. starting a school, fund professors, or teachers, etc.) the reward that they’re getting is not necessarily a physical product, it’s more of an idea that they believe in and want to support. Therefore, the strategy, rewards and marketing is going to be different than if you have a physical product.
Q: Traditionally EdTech startups have not done well on Kickstarter. If you had to give advice to Ed Tech companies who wanted to use the Kickstarter model, what would you tell them?
A: That is a tough and interesting question! It really depends on what they’re trying to accomplish. Based on what they’re trying to accomplish it will change their target market, which will change distribution channels, so it’s really a case by case thing. Some general principles still apply: Identify your target customers and what channels you can reach them through, then go crazy through those channels to try to get as much exposure as possible! Another thing to think about is who is browsing on Kickstarter. Typically, they are single males who recently graduated from college with money and nothing to do. That said, you might not have a lot of organic interest from people on Kickstarter, so our biggest suggestion for people who want to do Kickstarter for an educational product is to make sure you have access to your target market before you launch.
Q: Is Kickstarter a good space for Education/EdTech Startups? We noticed that Education isn’t even a choice in Kickstarter’s main categories, what are your thoughts on that?
A: Strategically, no, we don’t think that Kickstarter is education-specific enough to make it really powerful in the ed space, but the model is fantastic. Really the benefit to Kickstarter is the traffic, but if that traffic isn’t your target demographic it’s almost a downgrade, so we’d suggest that people in education/EdTech make their own crowdfunding campaign on their own site to raise funds. If you do that it adds a lot of benefit strategically because it’s on your own the website. With Kickstarter, after the allotted time is up, you can’t capitalize on the traffic coming in, but if you have your own site, you can capitalize on that traffic forever. Additionally, you can better control the terms of the campaign if you host it on your own site (ex. an EdTech startup may need up to 6 months to get enough publicity and press, and that’s just not possible on Kickstarter). That’s not to say it can’t be done on Kickstarter, but in general, campaigns do better if they are offering a physical product that’s appealing to the people browsing on Kickstarter.
Q: If you wanted to approach the media before launching your Kickstarter campaign, what a good way to go about that?
A: This isn’t our area of expertise, but from what we’ve gathered, media likes exclusives. If you can contact them and say “Hey, I’m launching on XX day, and you’ll be the first outlet to write about it and I’ll give you pictures that no one else has access to, etc.” that’s a stronger proposition than saying “I’m launching and you’ll have access to materials that everyone else has.” In reaching out to bloggers—make it personal. We were talking to one of the bloggers at TechCrunch and one of the things he said was that he constantly has people pitching new ideas to him and he has a lot of options on what to write about, but he really likes when people have a relationship with him (ex. go out for lunch, or cup of coffee to get to know each other).
Q: Would you mind sharing some really tangible Kickstarter takeaways?
Don’t stress out about the quality of your videos! Spend more time and resources making sure you have really high quality images/visual materials. The images are what will be proliferated across the web and help with PR.
Make sure you’re spending a lot of time marketing prior to launching. The most successful campaigns have done a lot of pre-launch marketing, which allows them to drop in with a ton of momentum. This helps get them in the “most popular” section, which then drives success for the rest of the campaign. Prefundia is a great tool!
Plan for details like shipping costs, so you don’t lose money!
View crowdfunding as pre-sales as opposed to funding.
*Interview performed by Noelle Chiavetta and Molly Levitt
More Info on Jeff, Daniel and Crowdfunding Weekend:
Daniel began his entrepreneurial pursuits as a teenager in Guatemala when his father gave him $15 and told him that if he could double it in a month, he could keep it. A few years later he and his family were operating the largest cinnamon roll distributor in Central America. After moving the the United States to serve a 2-year mission and attend Brigham Young University where he graduated from the highly acclaimed Strategy program, Daniel has dedicated himself to further entrepreneurial endeavors and helped to create BYU’s wildly successful crowdfunding program.
At the age of 21, immediately after returning home from a 2-year mission in Veracruz, Mexico, Jeff worked as an intern at Fortune 100 company, Northrop Grumman, and simultaneously started a company producing and distributing daily planners. He sold the planner company to a competitor his junior year at Brigham Young University while studying business management, which funded the creation of a second company which was acquired a year later.”
Via EdTechTimes: http://edtechtimes.com/2013/10/16/lessons-crowdfunding-experts/