We're building a social language app. We're a developer and a designer so we've been able to bootstrap to beta. We want to stay bootstrapped and take the whole process somewhat slowly - soft launch in a small country, launch in Canada, launch in the US. The only immediate, recurring cost we see is our backend - we're using Parse.
So we want to raise $10k-$20k. Still getting product validation but if that goes decently well, I'm imagining $20k will be relatively easy to raise.
We thought about Indiegogo a while ago (Kickstarter doesn't allow apps), and our circumstances are changing for the better as we progress, so it's not our main option at the moment.
But here our the advantages as I see it:
- The money is free, and $10-20k can cost a lot at this stage
- It's our initial marketing campaign
- It's a lot of work to run a campaign. But since it is a first initial marketing campaign, we want to do that work anyway
- Apps don't do well on Indiegogo in general. However, there was a social soccer app that raised I think $25k when I saw it, and the campaign wasn't over. But that was definitely the outlier.
- Legal issues with taking/using this money?
Apps are difficult to fund on IndieGoGo as few are successful, and we rarely take them on as clients. Websites like http://appsfunder.com/ are made for that very reason, but again, difficult to build enough of a following willing to pay top dollar for an app that could very well be free, already existing in the marketplace. A site that is gaining more traction you may want to look into would be http://appsplit.com/. Again, Appsplit Is Crowdfunding For Apps specifically.
As you've already established, there isn't great precedent for success with IndieGoGo in raising money for apps. The money isn't actually free in that - as you say - there is a lot of work involved to successfully achieve a campaign goal.
A Company I advise just raised $25,000 as two young, first-time founders from a single investor with a little more than a web-based prototype of their mobile app. I think given that everything will cost time and energy, you're better advised to raise $25,000 to $100,000 from friends and family or potential angels. Yes, this will take your time, but the dilution shouldn't be *that* bad (5-10% dilution). You will hear no more than you will hear yes, but then you're planting the seed to come back when you raise your seed round with those investors.
Lastly, if you intend to charge for this app, or in-app services, there are ways to run your own "crowdfunding" type appeal but directly to customers. Basically asking people to prepay for early access to the product. It's often a good litmus test for product/market fit and, if the product has a broad appeal, could work to your advantage.
Happy to talk more of this through in a call with you.
Options for raising money on Indiegogo for an app is as follows:
1. Transforming a Contributor into a Loyal Supporter: The goal is to transform the causal purchaser into a loyal supporter. Your intent should be to monetize consumers in alignment with their passions. In simple terms, People are trading their money for an experience. For example, let’s say someone has always wanted to be a Rockstar, but they are a dentist. You are a musician and want to get a quality album made using studio time. Studio time is costly, so you turn to Indiegogo to create a campaign. Now, let us say this dentist cruising your campaign loves your same style of music and it’s been his dream to be in a band. You have created a ‘perk’ on your campaign that by contributing $100 bucks that dentist can gain access to sing on your album for one song. Point is, think about what experience your contributors desire in their lives and how you can provide that for them. Create your perks correlating to contribution amounts. $25 dollars get the album, $50 dollars have your name on the DVD cover, $100 sing on one of the tracks, etc. So, in essence, people are rewarded for donating. Another incentive is to give contribution options based on causes people believe in. 1FaceWatch did an incredible job of that in their campaign. Each colour of their watch represented a different cause; if you bought Red, a portion of your contribution went to Red Cross, Pink went to breast cancer, etc. People ended up buying multiple watches because they did not want to pick just one cause. It was no longer about the watch; it was about that contribution making a positive change in this world. Test various perks on your campaign to see which ones are the most successful.
2. Blogger Outreach: First, you must form relationships with bloggers. Blogs are a huge part of marketing. Finding bloggers online and engaging with them should start right away, not wait until your product/campaign/website is ‘ready’. Start reaching out to just LISTEN to what they are saying now. Follow them on Twitter, read their blog posts, if they do guest posts read those as well. Get to know your target bloggers.
3. The Value of Having a $5 Perk: When you initially setup your campaign the automatic contribution amount defaults to $100 dollars rather than zero. This will increase money raised. Add multiple donation options so people have a choice and may give more. DO INCLUDE a $5 option because you want to think of that option as a person contributing spirit to your campaign and the possibility that they may share their spirit online with their friends in the social web means that $5 option could lead to larger donations from other contributors within their network. This ‘$5 spirit option’ ends up turning into an average of $74 dollars for each sharer referrals so YES an $5 is totally worth it.
4. Hacking the Contribution Progress Bar: People outside of your friendship circle, i.e. strangers, will not donate until the progress bar shows 20% to 30% (this number is lower in the gadgets category and higher in causes category) — no one wants to be the first. When your progress bar is OVER 20% strangers are way more likely to give. This means you want to reverse engineer your goal. Your action plan is to be responsible for 20-30% of the money contributed by asking your friends and family for their support first which will get that progress bar to where it needs to be, then the rest will be from strangers.
5. Soft Launch and Hard Launch: You’ll want to have what’s called a ‘soft launch ‘and a ‘hard launch‘. What this means is, in a soft launch tell specific people, (your friends and family), you’ll be launching a campaign for this amazing project — email your close network the date when the campaign will be going live. Suggest an amount for them to give, $20 or $7, just make sure to do your math so you can plan on achieving the progress bar status you want (20-30%). Make your campaign live on that date, (for example, Sunday May 9th). Separately, but in tandem to your soft launch, prepare for your hard launch. This is where you go to influencers, bloggers, media and press, but instead of saying May 9th, tell them a later date (for example, Tuesday May 11th) and ask them to wait to publish any news on your campaign until that later date (May 11th). The soft launch will move the status bar closer to your goal of 20% raised so when the hard launch triggers and bloggers publish their stories about your campaign strangers reading the posts who visit your campaign page will be more apt to contribute since they see your progress bar is quickly move forward and they are not the first in line to contribute.
6. Perk Pricing Hacks: Campaigns with a $25 perk raise 35% more money than ones without a $25 perk. The amount should be $25 (not $20). It is a science. Also be sure to have an awesome $100 perk. Then throw in a $15- and $85-dollar perk that are not as good as the $25 and $100 perks to increase the value of the perks that are just a few dollars more ($25 and $100). This technique is called price anchoring.
7. How to Make Your Campaign a Safe Place to Contribute: It has been proven that campaigns that have more than one campaigner make more money. ‘Campaigners’ are people listed on your team and it doesn’t matter who it is; can be your Mom, best friend, teammate, just matters how many teammates you have. When people see ‘you have all these people involved’ they feel safer about giving you their hard-earned money. They use it as a vetting mechanism to feel that they are safe contributing and not being scammed.
8. Social Profiles: Campaigns that have 4 or more external social links on your campaign page do best. So be sure to set up links to your Facebook, Twitter, Website, YouTube, and LinkedIn.
9. Timeframe: Somewhere under 47 days is where people are successful fundraising. This means to make sure to set your campaign time to go longer than 47 days.
10. Post Updates: The more you post project status updates about the journey and progress, the more money you make — updates do not go to the world, they only go to current contributors. By posting updates those contributors have more reasons to share your campaign with their friends who then feel inspired to become contributors as well. The sweet spot where you contribution numbers start to soar is posting 31-50 updates.
11. Add Photos/Video: Adding project photos and/or video increases the success rate as well. The key number is 10+ pieces of media, any combination. Can be video or photo or both. 3 minutes is ideal video time length.
12. Campaign Description: In the first line of your description under the video have what you’re going to do with the contributions. For example, ‘for every contribution I will give X to XYZ organization’. Any photos directly beneath the video should not be product shots, they should be personal photos to humanize your product. State what you are considering doing if a person participates in contributing, that you will also build/create XYZ and include that under that initial text as well. Use words like “bring” instead of the word “help”. Remember you are not standing on a soap box begging. You are creating a mutually beneficial experience.
13. Video Production: Looking for someone to help you create a magnetic video showcasing your product? Check out Smartshoot which is a site of videographers ready to lend their creativity to your campaign development by crowdsourcing their ideas and services. TheSunJack, who used this resource, said to expect video production to take about a month and allow at least 2 weeks extra solely to put together your campaign.
14. Accepting Money via Credit Card: One secret payment insight most people aren’t aware of is with other crowdfunding platforms is that money pledged is not immediately drawn from the buyers account so purchasers get pissed when they are charged a month later, or their credit card may be maxed out, or reached its expiration date. With Indiegogo, people get charged immediately. Indiegogo uses direct credit card processing.
When you finally launch a campaign pay attention to the comments area on your campaign. You will discover what your future customers really want, colours, sizes, accessory types, features. Maybe you launch a necklace and people love the style, but wish they could wear it as a bracelet, it is a cue to > create a bracelet! After all, these contributors are the people funding you to do so.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath