The Kickstarter Cookbook
How to launch a Kickstarter campaign without getting hurt
Why did we write this guide
We launched a few successful Kickstarter campaigns and we are often asked about the “recipe of a good campaign”, so we decided to write an article on all of the aspects we think are important and then, when asked about it, send the link 😂
I’m Matteo, co-founder of Sefirot, an independent publisher focused on tools for creativity, and I’ve led 4 successful Kickstarter campaigns (I’ve also been an advisor on just as many). My background is in advertising and design and I’m the author of The UX designer survival guide (Hoepli, Italian Edition).
Let’s start: what is Kickstarter
Kickstarter (let’s call it KS from now on) is a crowdfunding platform (ranked as number 1 in the world) that allows creatives to publish their project and raise funds from customers (backers) in exchange for rewards. If we need $10,000 to make a watch, instead of looking for an investor we can pre-sell 200 watches at $50 a piece and, independently, come up with the funds.
The main variables of a KS campaign are:
- Length: we can decide how long the campaign will last. The most common choice is 30 days.
- Goal: we have to declare how much we need, for example $10,000. Kickstarter works with an all-or-nothing system so, if we don’t reach the goal, we don’t get any of the money raised.
Why should we launch a campaign on Kickstarter
- Because we have a dream we want to see come true. That was the case with the campaign for intùiti (www.intuiti.it): in 2013 I heard so many «No» from publishers, so, quite desperate, I put the project on Kickstarter. I didn’t care about making a profit at the time, I just wanted to see my deck of cards come to life.
- Because we want validation for a product. We have a great idea but no one wants to invest: we put it on Kickstarter, we raise 80 thousand dollars and with those numbers we reach out to an investor. We use vox populi as leverage.
- To bootstrap a project, or the company. Startups are told that, before looking for investors, they should look for customers: Kickstarter allows you to do both in one place. Do we want to start a company that sells watches? We launch one watch on Kickstarter and we make enough money to open the company, to fill up a warehouse with the over-production and we can also profile our backers to have a clear idea of who our customers are.
- To reduce entrepreneurial risks. If we run an established company, we probably have enough funds to greenlight the production of a new product, but we might decide to launch a Kickstarter campaign to reduce the risks in case the product doesn’t sell.
- For brand awareness. We are an established company (kind of well-known) and we decide to invest a good amount of money (let’s say we put 1 million dollars into it) in a campaign in order to achieve newsworthy results and have a marketing lever.
What are the key characteristics of Kickstarter as a mean
- Easy access to discounted products. When we buy a product on Kickstarter we generally pay 30-40% less than the retail price (at least this is what it is usually communicated and it turns out to be true in most cases).
- Rush/Urgency. The Kickstarter campaign has a pre-established duration so the undecided customers end up making the purchase because they know they won’t be able to do it later. This urgency is heightened by limited discounted early bird offers.
Common – and wrong – ideas on Kickstarter
- Backers support out of the goodness of their heart.
In the majority of cases it is actually the opposite. Kickstarter is not a system to make your dream come true thanks to donations from generous people. It might have been the case when the platform launched, but today is no other than a pre-sale. Those who back a book project, do it to support the dream but also because they want a copy. What it translates to is that the best projects for Kickstarter are those where the reward is tangible: a watch, a graphic tablet, a book, a skateboard. And to kick illusions in the butt a little more: the best projects are those where the purchase is selfish. To give you an example, kids products tend to be less successful because the purchase lacks the «I want this!» impulse.
- Backers effortlessly reach you.
I’ll make a great video, beautiful pictures, the project is super creative and boom: money will come flying towards me! I call bullshit on that… Kickstarter has a community, true that, and if the curators like the project they’ll give it good visibility, however this won’t help much. You should think of the Kickstarter page as a landing page: no one is going to land there if you don’t advertise it!
From the point above: how to backers get to you
- Friends and relatives. This is the first rule when looking for investors. The first and most accessible ones are the three Fs: Friends, Family and Fools. Once you launch a project, you’ll reach out to all of your contacts on Facebook, WhatsApp etc. Something will come out of that for sure. But let me tell you one important thing: many of your friends will not help you, even when faced with your immense enthusiasm, and you’ll find acquaintances who will cheer you on and back you (careful about the whole emotional side). If Chiara Ferragni should launch a Kickstarter campaign today, it would be a success. Same thing if Seth Godin did. Have you built a community around your project? How many people are in the community? 1000, 2000, 5000 people? How many of those people would monetarily back your campaign? Well, you should start asking yourself.
- Paid Ads. I’m talking about the ads you see on Facebook and Instagram. If you winced, that’s not good (time out for you 😂). Paid ads are the most common way and usually the most effective, along with being measurable and potentially foreseeable.It is the same method you would use for any online business: you invest to get a return. There is an index called (Return On Ad Spend) and it should be at 3 or more: I invested 1 and my return is 3.
- Going viral. This is everyone’s hope and in 99,9% of cases, it doesn’t happen. I worked for years in advertising and every single client wanted a «viral campaign» or a «viral video»: those things that you post online and, who knows why, a bunch of people start reposting at the speed of light. Well, that stuff… doesn’t exist. Actually: what doesn’t exist is a way to plan it. Virality follows the law of chaotic motion, it is completely unpredictable. So yeah… we can hope, but let’s not rely on it.
The Kickstarter system in a nutshell
It should already be clear thanks to the information above but let’s try to make it even clearer: our goal, when launching a Kickstarter campaign is to reach as many people as possible and make them buy our product. No more nor less than that.
- The more people land on your page, the more people are going to buy.
- The more these people are in target (and interested!), the more sales you are going to see.
- The more the project is presented in a clear and endearing way, the more sales you’ll make.
Let’s get into a practical example like the campaign we launched with Sefirot for Fabula Deck for Kids:
- We gathered 18.489 users in the month before the campaign;
- Out of those users,1990 backed us.
Our page converted 10.76% (1990 divided by 18.489). Usually the conversion rate of a Kickstarter page is between 2% and 5% which means we had a good community to work with and that the product was well presented and the target audience was successfully reached. We can correctly state that if we had brought 40,000 users on the page, our results would have doubled.
Therefore, to run a successful campaign it is necessary to work on:
- How the product is communicated (to increase the conversion rate);
- How many people are reached (to increase traffic);
- What kind of people you reach (also necessary to increase the conversion rate)
Bonus: to optimize with urgency, popularity and Projects we love.
- Kickstarter rewards the projects that curators find most creative, giving it visibility within a special category (Projects we love). If we present a creatively interesting project, it is possible to increase traffic for free.
- If we push a sense of urgency to our possible supporters (through discounted offers in limited numbers, for example, the so-called early birds), we could see an initial hype which will help us to be included in Popular projects. Those are the projects that will have greater visibility which translates in more traffic generated from the platform.
Shopping list for a Kickstarter campaign
Let's look at what we need to increase our chances of success for a campaign:
- Captivating product photos. You don't necessarily have to do them in the studio – nowadays you can get great results using your phone and then a mix of Photoshop and Lightroom – this means you could save money. The important part is to show the product as clearly as possible and try to make it desirable.
- Presentation text for the Kickstarter page. It should be written in English (Kickstarter is an international platform!) and it must be carefully thought out and structured. You can use Cicero to do it (we usually do 😉) and also get inspired by other successful campaigns to decide the “main points” to borrow. What you should always include is: what the product is for, what problem it solves, why you are the company/person who is able to make it and deliver it, how it works, how it is built. If you need help with the writing you can ask a copywriter (the cost lies between 500 and 1000 dollars) and for the translation from any language to English the cost is around 7 cents per word and 3-4 for proofreading (if you write it directly in English). To give you an idea, the Fabula for Kids campaign is about 1500 words which translates into 120 dollars.
- Presentation video. There are several theories on this. Ours is: set on a video 2 minutes long, as if it were a commercial + a few additional minutes in which the creators put their face on it, talking about who they are and why they want to do the project. A well written video script can cost around $400 (if you hire the same person to write the texts for the Kickstarter page and the script, you might be able to lower the price), the video shooting can vary from $0 (if you do it yourselves, as we did with Fabula) or $3000 (if you employ a professional, as it was the case of Fabula for Kids), but it can easily go up to $10,000 or more, depending on the type of production. We recommend staying at 2-3 thousand maximum.
- Reward structure. If backers pay $20, they’ll receive a notebook. If they pay $35 they’ll get two. If they pay $60, they’ll get four. You can decide whether to make a price that includes shipping or to set different shipping prices depending on the country of the backer; we generally calculate an average price and choose to sell with “shipping included”. How to decide the prices for your products? You should base them on production costs and market expectations. Benchmark: if you are launching a campaign for a new notebook and by researching you know that these usually cost between $15 and $30, you should stay in that range. In the reward structure you can plan to add limited special offers (only for the first 100 backers, for example) which will potentially induce an acceleration in the growth of the campaign within the first hours of the launch. I recommend to study carefully the reward structures of other successful campaigns to find inspiration.
- Pre-campaign. A campaign is not prepared nor launched overnight. There’s no way. First you need to build a starting community. Whether it is a list with 1000 subscribers, 500 followers on the KS page (once a project is approved, an ad hoc page is generated where users can click on the Follow button and will be notified at the time of launch), or a secret Facebook group with 300 subscribers, the gist is always the same: you need a starting point. But how much does creating this base cost? Well… it depends. In the case of a community on Facebook, we are talking about time, sweat and content creation. If we use a landing page where we present the project and ask those who visit to subscribe to a newsletter that will keep them informed on the launch date, when there will be early bird offers available (here’s that concept of "urgency" again), we can plan on spending from 50cents to $2.00 per lead (contact acquired). Cost per lead is discovered by creating ads and trying them out. But we can presume having to spend $2000 to collect 1000 leads in the pre-campaign.
A couple of words on the landing page. The landing page will almost certainly present the same content as the Kickstarter page so the cost of producing copy, images and videos has already been taken care of. However, other elements are needed to create a landing for lead generation:
- Domain. As with any website, you have to buy yourself a domain. www.myproject.com – You can do it on Godaddy (the cost is around $20 / year).
- Forms to collect emails. To put it simply, this is the box where the user writes their email and signs up for the newsletter. It must be connected to a service to send mail such as MailChimp, Sendinblue or Activecampaign ($20-30/month).
- Building the landing. It can be done through one of the services mentioned above, or with Wordpress, or by paying a programmer to do it (in this case the costs can vary from 200 dollars if the programmer is a friend of yours to... infinite amount of $$$, so it’s better to get a quote).
- Copywriter for the landing. Calls to action are important. "Sign up" is not enough. "Leave us your email" is definitely not enough. The call to action needs to be planned and there are professionals who can do it. To give you an idea: "Do not miss the discounted offers at the time of launch: leave us your email", now this is already something else entirely.
Nice to have
These are some additional ingredients. They are not indispensable but it wouldn’t hurt to have them handy either.
- Add-on. Also called upsells. I want to buy a diary and I have three offers to choose from: the regular diary on its own, the diary but with the leather cover, and the diary with the leather cover and the pen. Adding the option to pay more for the leather cover and the pen helps you to increase the average cart value: this will give you greater margins to work with, which is essential if something goes wrong during production or shipping.
- Stretch Goal. On Kickstarter you set a minimum goal – 10,000 euros for example – and the project is only greenlit if that goal is reached. Over time, creators have invented a technique to generate hype in the community: stretch goals. Let's make the diary in cloth but... if we get to 20,000 dollars we will make it in leather for everyone and... if we get to 30,000 dollars we will also add a bookmark and so on. Is just something else to think about: it depends a lot on the project and on what your “hidden” goal is.
Let’s talk about objective and strategy
We’ve already established that the Goal should be the minimum amount of money for the realization of a project and that Kickstarter is an all-or-nothing platform (either you reach the goal or you don't get anything), so if we set a goal at $10,000 and the duration of the campaign is 30 days, but we only reach 9,995 when the time runs out, we end up with nothing! Since it is absolutely possible to exceed the goal – we can build a $10,000 campaign that after 3 days has already brought in 30-40 thousand dollars – this mechanism opens up numerous possibilities and strategies:
- Play safe. As in the case of intùiti in 2013. I was 24 year old and broke. I couldn't afford any sort of wiggle room, so I worked out the exact math and I knew that $15,000 was the minimum amount I needed to produce and ship the deck to everyone. With 15 thousand the revenues and costs would equal to zero but, since I wanted nothing more than to see my dream come true, it was fine with me.
- Variable investment. We need $20,000 but we are not sure we can collect that much, so we decide to set the goal at 10,000 and we know that there is the chance that we will have to add what is missing out of pocket. We decide that $10,000 is better than nothing!
- We want the hype. We think that we can make $100,000, or even more. We have a strong strategy and we are investing, so instead of setting the goal at $100,000, we set it at 10,000 so after 24 hours we can write "Project financed at 600%" and use it as leverage for communication.
👉 A parenthesis: promo agencies
We all agree at this point that it's all about traffic, right? Once - we’re talking about ten years ago - you could literally work magic with Facebook, but today not really. Saying "If you don't pay, you don't exist" may seem exaggerated, but it's not that far from reality. There are some who hire press office agencies to get articles on important newspapers such as Wired, TechCrunch etc. For our experience, we think that this system is very expensive ($5,000 or more) and it doesn’t help with conversions (people who come from blogs and newspapers are often just curious and not in target so they end up not buying) so the press office is a fine idea but mostly for Brand Awareness: if our goal with the campaign is to be seen, we can keep it in mind.
If, on the other hand, we are trying to maximize our investment to raise as many funds as possible, then it is probably better to work with companies specialized in promoting Kickstarter projects. They usually work taking a percentage of the funds raised and very often they put forward the funds for the ads that they run. Here’s an example: if your project is going well, you could end up spending 30 thousand dollars in Facebook ads, you agree that if the PR agency puts them up front, it is a better deal for you! The companies that we have worked with are BackerKit and Jellop which we found to be professional, trustworthy, and we recommend that you contact them at least a month before launch.
Production and Shipping
Do not fall into the bullshit deal (yeah: it is some bullshit) of launching a project on Kickstarter without having secured production and shipping estimates.
If we launch a project we need to know how much 1 unit of the product costs us if we produce X units and how much it costs us to ship them to end customers.
For example, I need to know that:
- The book I have in mind costs $2.53 per copy.
- I have to produce at least 2,000 copies to secure the above price.
- Shipping one copy costs: $4.60 for national customers; $10 to foreign ones.
- Sending two copies costs: $4.60 for national customers; $13 to foreign ones.
- And so on…
But how do you find all of this information?
You call a bunch of possible suppliers, mostly in your own country, but also in Europe, in China and so on, until you find the right one for the project. Each supplier has its own peculiarities, so it is necessary to get quotes and prototypes to find the right match.
For your shipping needs you can:
- DYI at home. You rely on the national postal service, prepare all the packages and wait for the courier to come and pick them up (this is a doable option only if you don't expect to have over 200 backers - otherwise it will turn into a nightmare).
- You can use a fulfillment service. A fulfillment is a company that runs one or more warehouses: the makers of the products send them directly to the warehouse, where the packages are assembled and sent to the end customers (this is much more convenient!). It is better to choose a fulfillment that is easily accessible from the production site: if you produce in the EU you can ship from Italy with CesenaRecapiti, if you produce in China we recommend ChinaDivision, instead if you are in the US then you can use ShipAddict.
And here we are facing the crucial problem: the Business Plan.
Don’t even open a Kickstarter account if you haven’t prepared a cost and revenue plan. If you don’t, you might end up badly hurt. You don’t want to run a campaign, make $40,000 but end up crying ‘cause you still have to fork 20,000 of your own…
The Business Plan will help you calculate how much you should sell the product for, what goal to set, how many backers you’ll need (so how big of an audience do you have to reach); it will basically give you a clear vision of the economic aspect of your project.
You need all of the above-mentioned information. So, here’s a recap:
- Minimum cost of production
- Cost per unit
- Total cost for the realization of the product before production (if you still have to pay illustrators, designers, translators, etc.)
- Costs of the campaign assets (copy, website, video etc.)
Below I’m attaching below a template from the same file with which we calculated the prices for the Fabula Deck for Kids campaign. It is very simple and it displays the bare minimum information you need not to get hurt. To use it just do File > Make a copy.
- A product that has a production cost of $2.00, with a minimum production of 5,000 copies.
- Shipping prices for 1, 2, 5 and 10 units.
- A reward structure that includes options for 1, 2, 5 and 10 units + two Early Bird offers (discounted) limited to 100 backers per offer. I have also decided to include the shipping cost in the price.
- The percentage in which to divide the backers (looking at other similar campaigns I estimated that 65% will choose the single product, 31% the one from 2, and the remaining ones from 5 and 10).
In the expenses you can see the production cost is calculated according to the data entered above; the shipping fee varies according to the number of backers; on top of that there the costs for making the video (I figured I would do the KS page independently but I would pay $2000 for the video), and finally there is the Kickstarter fee (about 10% of what is collected).
Careful. I have not entered any costs for Paid ads (I’m working as if we have no money for advertising).
How does the file work?
You have to toy with the number of Backers until you get to the point where costs and revenues become close to zero. In example 1 we find that:
- We need at least 425 backers to carry out the project.
- The goal should be set at $18.745 minimum.
What if 425 backers are too many? One of the solutions could be to increase the prices by $5. If we look at the example number 2, the goal is set at the same amount (the production costs are invariable) but I would only need 350 backers. This can work if the price stays competitive.
And what if we get to 1000 backers? Let's go back to example number 1 and change the number of backers to 1000: we would reach a goal of $46,000 and we would end up with about $19,000. Not bad at all.
However, instead of getting too excited about easy profit, let's try to think like entrepreneurs and let's look at that item “Inventories” - these are the units of the product that would remain in the warehouse after having shipped their products to the backers. In the very first example, even if we break even between costs and revenues, we would end up with 4366 units, which of course we can sell after the campaign is over: and here’s our real gain! This is our first production for which we didn't have the funds.
What about the paid ads?
I have included a small calculator that calculates the cost per backer adding the CPC (Cost Per Click) and the conversion rate (the percentage of backers compared to the number of users who visit the page) therefore, actually calculating the total cost to reach the total number of backers if we were to acquire them using ads only.
Of course both CPC and conversion rates have to be tried out - you have to run tests to find out what the real values are, which change from project to project - for now I have resorted to inserting average values.
What does this mean?
- If we can get 425 backers on our own (through the community, and bugging friends and family, etc.), we are game. We will exceed our goal and have over 4000 units left to sell at the end of the campaign.
- If we had spent $2000 on lead generation in the pre-campaign phase, we would have $2000 less (but with available units to sell and a successful case history, it could be worth it).
- If we were to acquire half of those backers through FB ads, spending about $2,500, we would end up with – $4,500 ($2,500 plus $2,000 for lead generation). Looks like it is starting to be dangerous.
- If we had money to invest and we wanted to aim for 1,000 backers it could be a huge success: we would raise enough to pay off the ads in full, we would have $50,000 and 3000 units to sell.
👉 Little parenthesis: taxes. If you receive a bank transfer for $50,000, someone will ask you to declare it and pay taxes on it. So before running a Kickstarter campaign, call your accountant and ask what you can do and how you can do it. It is possible that it is necessary to start a company or at least get a VAT number. Don’t let this discourage you: it is often much simpler and less painful than it seems 😉
What about creativity?
You've come this far and you're wondering: what about advice on how to set up the video? What about the catchphrases for the Kickstarter page? And the best practice for the project’s image? And for the payoff?
The best way to learn how to present projects on Kickstarter is to study other projects. So: benchmark. Look for the most successful projects and the ones you see and make you say, "Fuck, I wish I had thought of that!" and steal, steal, steal as much as possible 😍
What else? Happy launch🚀