Alex Lee came up with the product for his Kickstarter campaign on his own. But when the Chicago entrepreneur decided to try to raise money for the new drawstring bag he’d invented, he turned to a marketing firm that specializes in doing public relations for crowdsourced funding projects.
The result: Lee raised $146,824 from 3,390 backers to help him bring Mochibags to market. That was nearly 15 times his initial goal, and with the robust financial support that was provided, Lee has produced sufficient production units of the Mochibag to reward supporters and is now working to fill pre-orders.
The crowdsourcing consultant Lee worked with provided necessary expertise in public relations, something Lee’s day job as a senior manager at an accounting firm didn’t prepare him for. Media coverage in such places as The Huffington Post and sports gear blogs was valuable in helping Mochibags achieve its fundraising goal, Lee says.
As Lee says, “Exposure is something every creator needs to figure out for crowdfunding.”
Of course, there’s more to crowdfunding than press coverage. Successful campaigns also tend to feature eye-catching videos, slick Web design and, should they achieving their funding goals and have rewards or other items to mail out, reliable product fulfillment. Not surprisingly, consulting companies that specialize in crowdfunding campaigns have sprung up to provide these services and more.
Romeo Mendoza, CEO of Fundzinger, the Orange, California-based marketing firm that helped Lee, says his company has helped 1,000 similar campaigns on Kickstarter and Indiegogo and is working with approximately 125 new ones each month. Mendoza says public relations is of particular importance to sparsely financed startups looking for crowdfunding, and it’s also something founders struggle with.
“Very quickly, usually on the first day, people’s personal networks are exhausted,” Mendoza says. “They have to find more eyeballs, and we've found that generating media coverage is one of the best places [to do that].”
Crowdfunding business listing service Crowdcrux has a directory of crowdfunding consultants on its website, showing the range of businesses trying to capitalize on fundraisers’ needs for help to make their campaign stand out. In addition to public relations and marketing, services include fulfillment, mailing, video production and website design.
Many crowdfunders find that time is one of the resources in shortest supply and that hiring a consultant can help extend it. “Running a Kickstarter campaign is a full-time job,” Mendoza says. “It's a lot of work that's overwhelming for the vast majority of Kickstarters we help.”
Most Kickstarters do a single campaign; only a few do more than one. With that in mind, a consultant’s day-in and day-out experience working with hundreds of different entrepreneurs and campaigns can prove valuable. “We've gained a lot of insight on what products move and what it takes to succeed,” Mendoza says. His company uses that insight to craft PR campaigns that zero in an entrepreneur's target investor in order to attract the most attention.
Dollars and Sense
What it takes to hire a consulting firm like Fundzinger varies from a flat fee to a percentage of the proceeds. Mendoza's company offers three plans. “With every plan, we create a pitch that we then email directly to targeted reporters,” Mendoza says. The plan that focuses on U.S. media only costs $525. The next most-expensive plan extends the pitch to outlets around the world for $670.
Seven percent of the funded total buys the Platinum plan. “With the Platinum plan, we assign at least one person to the project full time,” Mendoza says. “Two people rotate in to assist.” Unlike the flat-fee plans, which are essentially one-shot press pitch blasts, Fundzinger sticks with a Platinum project through the entire campaign, fine-tuning the entrepreneur's message and re-pitching as it deems appropriate.
But it’s not enough to simply hire a consultant, pay the fee and sit back to let the crowdfunding bucks roll in, Lee advises. Well in advance of cutting any checks, a crowdfunder should be sure to work to understand his or her audience and have a strategy that a consultant will add value to, he says.
“Before signing up for outside help, picture yourself, your projects and your product at the national stage in traditional media and new media," Lee says. "Then ask yourself, 'Is the attention going to help my crowdfunding goals?'”
Even before that, a crowdfunder needs to be justifiably confident that the campaign is built around a product or other outcome that funders will find compelling. “No matter how much press you get,” Mendoza says, “if you don't have a great project, your funding won't go far."
Read more articles on funding.
Photos: Getty Images, Mochibag