AP 0455: Which Crowdfunding Site Should I Use?

AskPat 455 Episode Transcript

Pat Flynn: What up, everybody? Pat Flynn here. Woo! And welcome to episode … I don't know what the “woo” was for, but welcome to Episode 455 of AskPat. Thank you so much for joining me today. As always I'm here to help you by answering your online business questions five days a week. We have a great question today from Kit.

Before I get to Kit's question, I want to thank today's sponsor, which is FreshBooks.com, which is pretty much a blessing, I guess you could say. It's no better way to describe it than a blessing, because it's such a great tool that allows you to help you manage your online business finances, from the money that you have coming in, from your expenses and everything going out and also invoicing too. They just stop all the headaches when it comes to organizing your finances. I remember when I first started I used Excel, and come April and tax season it just was a headache. I'm so glad I got hooked up with FreshBooks. They serve over three million small businesses. They can help serve you too. You can check it out for 30 days for free … a 30-day free trial by going to GetFreshBooks.com and by entering “Ask Pat” in the “How did you hear about us?” section. Again, that's GetFreshBooks.com, enter “AskPat.”

And here's today's question from Kit.

Kit: Hi, Pat. This is Kit from TheIllustratedCoach.com. And I wondered if you could make some sense out of the crowdfunding platforms that are out there. It seems like there's quite a few. I know about Kickstarter, but I hear pluses and minuses. And I'm interested in submitting a project, but am not sure which way to go. I know you have all the information on these types of things, so I really look forward to your answer. Love what you do. I tell as many people as possible. And I'm here in Kalamazoo, Michigan. Can't wait to hear about this and keep up the great work. Thanks.

Pat Flynn: Hey, Kit, all the way in Kalamazoo. That's an awesome city name, actually. I haven't been there, but I love Michigan, and I can't wait to go back one of these days. But anyway, thank you so much for calling in, I appreciate this. And crowdfunding is a great way to help raise money for whatever project that you have going on. And it's also a great way to validate what you're doing, so that you can understand whether or not it's something people are interested in. If you don't get the funding required, then there's something up in terms of what your idea is or how you're promoting it. So, in one way or another, you can then fix what's going on or change your idea. And then once you get people who are buying into your idea through these crowd funding platforms then you have an understanding of this is the direction you need to go.

And like you said, there are a lot of different options out there. There is Kickstarter.com, which I'm very active on. I've bought a dozen or so things from different campaigns on Kickstarter. Indiegogo is another one as well. There's GoFundMe, and a number of other ones too. Now, I know for a fact that Kickstarter, you have to raise all the money that you say you want to raise in order to get access to that money. And I'll talk more about the ins and outs of each of these different platforms in a little bit. And that's kind of the … That could be a pro, but that could also be a con, because it will help motivate you to make sure that you get fully funded. And it helps motivate people who are following along who have either donated or have yet to donate to want to really make sure that you get across that mark. And you can earn a lot more money too that way.

There's also Indiegogo's platform, which is the opposite, where it doesn't matter how much you raise. You get to keep that money. Now, each of these platforms, including GoFundMe, they take a percentage of the total pledge, or the total amount that has been raised. So keep that in mind, because that's potentially a large chunk of change. But that's how they make their money. And the benefit for all these is that it is crowdfunded. Which means there's a crowd there. There are people who are sharing these things with each other. It's a lot more opportunity for some. And depending on the product, than just launching the product on your own brand new website and having nobody there and nobody having a way of discovering you unless you go out there and market it yourself.

On these platforms, especially Kickstarter, certain things can happen. For example, you could get featured as a staff pick. You could become one of the popular ones that is making a lot of movement, in which case you would get a lot more exposure and have more people come across your project too. Kickstarter and Indiegogo, I know, are looked at a lot, and people are always trying to discover new things there too. So, there's a lot of potential for new eyes to get on your project on these particular platforms. And again, it's a different way for you to validate your products before you even create them. Or as you are planning to spend a lot more time and effort on them, whatever it is that you're doing.

Now, the drawback behind doing things like this, especially on Kickstarter, where the pledge prizes are very much a thing that people look forward to… I've heard a lot of people who have started campaigns on Kickstarter say that they started it thinking it was going to be about their product, when then it just became a manufacturing process for all of their prizes for the people who have pledged different amounts. Now, I'm not an expert at any of these platforms except for maybe Kickstarter as a buyer. But I have not run my own crowdsourcing campaign. I've participated in campaigns as a donor on Kickstarter, Indiegogo, and GoFundMe, and a few others as well, most of them for charitable-type stuff. I've done my best to understand that this is actually a very vital way to start a business, to validate a product. And it is something I'm interested in learning more about in the future as well.

So, Kit, I can't give you any specific advice right now, but that's all I know about those platforms at this very moment. There's also a great Podcast episode I've recorded in episode 117 with a guy named Dwight Peters who runs a business at BackersHub.com, where people can get awesome deals on Kickstarter-funded projects. And I recommend you check that out, potentially reach out to him as well. Dwight Peters is his name, and you can get a link to this interview. It's a great one, and he teaches you a lot about the platform and things that have gone right for different companies, things that haven't gone right for different companies that he's worked with. So go ahead and check it out at SmartPassiveIncome.com/session117, and you can listen to that one too. I also know there are a number of different podcasts and blogs and websites out there that are resources for people who are getting started on these campaigns.

And if possible, probably the best thing you could do is connect with somebody who has already started one and successfully funded a campaign to get the real life story on how this works and what you can do to maximize your efforts too. I do want to say that the last thing is if you do not meet your goals, no matter which platform you use, if you do not meet your goals the first time around, a lot of companies have come back, have changed things, have listened to their audiences and the people who have come across these campaigns, and have gone crazily wild and successful on the second go around. So just because it might not work the first time doesn't mean you can't come back and try again.

But, like I said, try to connect with other people who have used these platforms. There are different forms out there too that can help you understand the ins and outs of this. And more than anything, just have a very compelling story and reason and why. That's what people are going to connect with. It's the why. And share the behind-the-scenes, and have a very nice campaign video to help drive interest and pledges for your particular project.

So, Kit, I wish you all the best of luck. Again, I apologize I can't give you too much information on that, because I just don't have it yet. But it is something I'm interested in and looking to get more information about in the future. So, Kit, we're going to send you an AskPat t-shirt for having your question featured here on the show. Thank you so much, again, for asking.

And for everyone out there who asked questions, thank you. The show obviously wouldn't exist without you. And if you have a question you'd like potentially featured here on the show just head over to askpat.com. You can ask me right there on that page. I also want to thank today's sponsor, again, which is FreshBooks.com, which is serving over 3 million small business owners and making their lives so much easier by helping them keep track of their business finances. There's also an award-winning mobile app that FreshBooks has come out with, which allows you to check your business finances, and the health of your business on the go. You can check it out for 30 days for free and see if it's right for you by going to GetFreshBooks.com and by entering “Ask Pat” in the “How did you hear about us?” section. Again, it's GetFreshBooks.com, enter “Ask Pat.”

And to finish off today, here's a quote by John Jance. He said, “Create something people want to share.” I think it's the perfect quote for this particular episode. So, to Kit, best of luck to you, and best of luck to everybody else out there. Thank you again, and I'll see you the next episode of AskPat. Bye.