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Crowdfunding Python (& other IT) projects

Crowdfunding Python (& other IT) projects

Python Croatia Meetup – Zagreb (online), 8.6.2021.

Dražen Lučanin

June 08, 2021

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  1. Crowdfunding Python (& other IT) projects Dražen Lučanin @metakermit

  2. • Running a web development / data analysis agency for

    the last six years ◦ Punk Rock Dev ◦ https://punkrockdev.com/ • We often work with startups on building minimum viable products (MVPs) • These startups sometimes use crowdfunding to raise funds • Two recent examples where I was involved: ◦ CloudFleet on IndieGoGo (website) ◦ CraftStrom on Kickstarter (IndieGoGo rollover, website) About me
  3. • Funding a project by raising small amounts of money

    from many people • In short: ◦ You present your idea (or better) prototype – using video, images, text, demos… ◦ You ask people to pledge financial support to back your project ◦ In return they get something – “perks”, often the actual product once it’s finished • Goals ◦ Fixed – unless the campaign reaches a necessary amount, everything is returned ◦ Flexible you keep the amount and are responsible for delivering, no matter the amount • Most popular platforms: ◦ Kickstarter ◦ IndieGoGo • Other models exist ◦ crowd investment (Conda) ◦ local variants (Croinvest, Startnext) What is crowdfunding?
  4. What sort of product is suitable for a crowdfunding campaign?

  5. What sort of product is suitable for a crowdfunding campaign?

    1. Products that have a chance of being finished 2. Products that people might want
  6. Technical challenges • Feature creep ◦ What is the minimal

    set of features for the product to be useful to the user? ◦ Is what we're working on really that vital? ◦ Is something else that's not finished actually more important? ◦ If this feature was never finished, would it make our product useless? • Just because it seems fast to implement something (yay, Python!) doesn't necessarily mean it's a good idea to do it right away • Hardware products especially complex ◦ Long feedback cycles ◦ Delays with shipping, customs etc. ◦ Communication barriers with the suppliers (WeChat, anyone?) ◦ Bugs much more difficult to fix if products have been shipped
  7. Case study – building a hardware webmail service • Very

    complex ◦ High demands on security and data protection ◦ Lots of 3rd party integrations needed ▪ Proxying to traverse the NAT ▪ Using trusted mail servers to avoid being filtered as spam ▪ Registering a domain automatically • In retrospect, we probably could have selected an easier app ◦ e.g. a team chat server ◦ Launch more quickly ◦ You can always extend the product later on
  8. Business challenges • Will people really want your product? ◦

    What is the persona you are targeting? ◦ Who are they? Do a persona workshop! ◦ How will they trust your product? ◦ How will they find out about your product? • The Business Model Canvas – useful tool • Competition ◦ Have there been similar products? ◦ Where they crowdfunded? ◦ How successful were they? ◦ How did they reach their audience? ◦ How is your product different? • Do your research!
  9. Case study – testing demand and building our crowd •

    Professional marketing team and well made product materials (website, photos, videos) • Focused ad campaigns to measure how many people in different markets we can take through our marketing funnel • A measure of interest and a newsletter list of potential backers • Pretty successful already at this stage, so we were confident going into the campaign
  10. What does it take to prepare a crowdfunding campaign?

  11. Timeline • The campaign really starts about 3 months before

    the actual campaign ◦ Ramp up on social media ◦ Growing your community ◦ Newsletter signups for interested people ◦ Ads ◦ Bring your own crowd! • The whole process of preparing all the materials, video production etc. with the campaign can easily take one whole year • Think through your campaign start time ◦ e.g. before Christmas people are shopping more, but your ads will be more expensive (competition) ◦ After New Years people have spent most of their cash, but are online more • Leave enough time to get verified and approved by the platform ◦ Kickstarter – exposure there potentially more valuable, but approval is more difficult • Possible rollover campaign – after Kickstarter we continued on IndieGoGo, but you can also redirect people to prepurchase in your own store
  12. Production • Get professional help! – it really makes a

    difference • Video production and marketing are probably the most important areas • There are crowdfunding agencies who help you for a fee ◦ We used one for a part of our campaign ◦ Hard to measure how much they're really impacting the success ◦ Analytics on Kickstarter very limited (e.g. no referral tracking), IndieGoGo is a bit better
  13. Defining perks • Try to set levels for all financial

    categories ◦ Lots of people maybe want to give smaller tips, without really committing • Keep in mind the availability if you want to allow different price tiers ◦ Early bird etc. ◦ Set smaller quantities of discounted perks to create a sense of urgency
  14. Setting your goals • Don't set your goal too high!

    • Calculate what you really need to be successful, but aim to set your official goal lower and overshoot it • The sooner you reach your minimal goal, the better ◦ People like backing successful projects ◦ Not so much if you're stuck on 10% for too long and it looks like you won't make it • If you reach your official goal, but not your internal goal you can always refund everyone • Famous example: ◦ Pebble watch officially aimed for $100,000 ◦ They needed ~$3M (if I recall correctly) and were willing to refund if they got less ◦ They raised over $10M in the end (so they overshot their official goal by 100x, but their internal goal by only about 3x)
  15. The actual campaign • Have agreements with your friends /

    family on who will fund on the first day • You want to raise about 1/3 of your official goal already on the first day from people you know will back you! • That way you pick up pace, gain exposure on the platform and it looks likely you'll make it, so you attract more backers • Have a plan of frequent updates, posts etc. during the campaign • You want to do a bit of storytelling to keep people interested • Time to deploy that ad and newsletter strategy you’ve been preparing ◦ Test different ads, target audiences and compare against the achieved pledges ◦ Keep in mind that people can still cancel their pledge before the campaign is over
  16. • The “only” thing remaining is to actually run you

    business 🙂 • That’s the part of the story we’re in now with CraftStrom • Time to set up proper customer support channels • Transparency is important ◦ Communicate any delays or hiccups ◦ For the most part, people are understanding Delivering your product
  17. Be brave and good luck!

  18. Discussion

  19. Thanks! Dražen Lučanin @metakermit