Six Sure-Fire Ways Not to Fail With a Crowdfunding CampaignProfessor of Economics at Anglia Ruskin University in Cambridge, Emanuele Giovannetti, has been doing research into predicting how successful Kickstarter crowdfunding campaigns are likely to be. Of nearly 10,000 Kickstarter projects he investigated, 26% were successful and 74% failed.
After studying patterns indicating the success or failure of campaigns, Professor Giovannetti created a model with an 87% chance of forecasting the result of a campaign. The model reflected the six key factors that determine the outcome of a campaign:
Reputation – The success rate of previous campaigns will drastically influence the success of future projects. Financing innovation requires trust, and trust is based on reputation. To start building an excellent reputation, start with smaller campaigns geared for success before tackling the bigger, more risky campaigns.
Timing - The earlier a campaign gets its first funding, the more likely it is to be successful. Make sure you spread the word wide and far so that you get interest sparked before the launch date.
Social Networks – Use external social capital to create awareness of the campaign. Although it may have a relatively small impact on funding, social media capital can also be leveraged to improve timing. A project promoted on Facebook, Twitter, or Instagram will have a better chance of being funded earlier on in the campaign.
Ambition – While every campaign is started with a target in mind, the research indicates that the less ambitious campaigns are usually the most successful. Ambition could be perceived as an antisocial feature, which is generally considered unsuitable for crowdfunding. In other words, the simpler, and the more realistic it looks, the better your campaign’s chances at success are.
Impatience – The longer a campaign lasts, the less likely it is to succeed; shorter projects are highly recommended.
Reciprocity – The research also indicates that a project is more likely to succeed if the campaigner has backed other projects. Again, a spirit of social unity and community is considered important.