If you could create your own fantasy Board of Directors, who would be on it? CO— connects you with thought leaders from across the business spectrum and asks them to help solve your biggest business challenges. In this edition, a CO— reader asks how to create a successful crowdfunding campaign.
Elan Lee, creator of the card game Exploding Kittens, which has one of the most successful Kickstarter campaigns of all time, answers...
Community is the most important part of any campaign, Lee told CO—. He would know. When Lee, with partners Shane Small and cartoonist Matthew Inman, sought to raise enough money to print decks of playing cards for a game featuring whimsical characters like magical enchiladas and yes, kittens that explode, their success was almost immediate.
Just eight minutes into their crowdfunding campaign, Los Angeles-based Exploding Kittens exceeded its $10,000 fundraising goal and went on to raise nearly $9 million in the next 30 days, shattering records and attracting 219,382 backers. That was 2015. The company would embark on three more Kickstarter campaigns, with the latest project launching this month (February 2019) for a new tabletop game that injects a little Dodgeball action.
The word is ‘crowd’
As backer of 449 crowdfunding projects undertaken by others, Lee has seen firsthand what works and what doesn’t.
Kickstarter is a rewards-based platform that offers incentives – not equity – in exchange for pledges. Supporters pay up only if the project meets its fundraising goal within a specified timeframe. Other types of crowdfunding platforms are strictly charitable (‘fund my spring break trip”) with no reward for donations while equity-based platforms offer part ownership in exchange for capital.
“So many people spend all their focus on funding and that really is not the word to pay attention to,” Lee told CO—. “The word is ‘crowd.’ You are not raising funds. You are raising a crowd, a community of people who will help you start something brand new, something the world has not seen before.”
Give the community a genuine voice, even as collaborators, he said. That means engaging with supporters at every stage of a campaign – even after fundraising has ended – to stoke dialogue on social media platforms, invite suggestions, criticism and feedback, while building exposure for the new product or business across several digital channels.
“The whole reason you engage is based on the fundamental premise of ‘I have an idea. I need your help making it real.’” Lee said this mindset captures the authentic spirit of crowdfunding, which is very different from commerce. “On Amazon and in stores, it’s ‘I had an idea. I made it. Please buy it.’”
The word is ‘crowd.’ You are not raising funds. You are raising a crowd, a community of people who will help you start something brand new, something the world has not seen before.
Elan Lee, creator of Exploding Kittens
A reciprocal relationship
Exploding Kittens developed a fundraising page and a charming video to introduce its idea for its first card game using an entertaining voice and style – and the community responded. Supporters spread the word; they were inspired to create costumes of the card game’s animated characters and post photos on Facebook, Twitter and Pinterest. Lee and his team shared and retweeted those posts to keep momentum going and so supporters could bask in the limelight.
The relationship between Exploding Kittens and supporters is reciprocal.
“We say, ‘Give us your ideas. What should the cards look like? What should the box look like?’” Lee explained. “We want you to play around with us. We want you to tell us your crazy ideas.”
Exploding Kittens will enlist input for its newest project, a card-playing game called, “Throw Throw Burrito,” whose Kickstarter fundraising campaign recently launched. The tabletop game involves a deck of playing cards and a soft burrito toy players throw at each other, in the spirit of dodgeball. To ensure the final product is fun – and safe for players aged 6 and older – the most enthusiastic supporters will receive samples of raw material to play with and report what they like and don’t like. Should the burrito be made of a foam-like material? Or rubber or fabric? Exploding Kittens will look to supporters to guide decisions for material used in the finished product.
Don’t focus on the money
Platforms like Kickstarter grant rewards in exchange for pledges. Rewards can be exclusive content like insider news, token tchotchkes or even the finished product, all determined by whomever is raising funds. Rewards of increasing value can motivate bigger pledges and meet stretch goals.
It’s here that Lee advises caution: “People go crazy with reward tiers and it often buries them,” he told CO—. Fundraisers who incentivize pledges with a complex system of rewards such as T-shirts, posters or other products soon find themselves grappling with logistical nightmares to secure and deliver those awards and that distracts from the initial project.
“T-shirts? Holy crap. You’ve got to send out surveys to understand the range of sizes,” Lee explained. “People dig horrible holes for themselves and they lose sight of a simple premise: You are starting a new business. Not a business…plus a T-shirt business. Not a business…plus a poster company.” Supporters trust a company to make good on its promises. Fail to deliver a reward and confidence is lost, followed by pledges and the whole project collapses because Kickstarter pledges are collected only if the fundraising goal is met.
“If you stay focused, you will get through it,” Lee said. Engaging the community is vital regardless of whether a new business is in a fun category, like tabletop games, or whether it falls on the serious end of the spectrum.
“Everything must be a celebration of the community,” he added. “They are the first people to trust you, to try your product, invest in your success.”
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.