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Crowdfunding Python (& other IT) projects

Crowdfunding Python (& other IT) projects

Python Croatia Meetup – Zagreb (online), 8.6.2021.
https://www.meetup.com/Python-Hrvatska/events/278654946/

Dražen Lučanin

June 08, 2021
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  1. Crowdfunding Python
    (& other IT) projects
    Dražen Lučanin
    @metakermit

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  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

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  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?

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

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  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

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  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

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  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

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  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!

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  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

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  10. What does it take to prepare
    a crowdfunding campaign?

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  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

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  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

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  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

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  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)

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  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

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  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

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  17. Be brave and good luck!

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  18. Thanks!
    Dražen Lučanin
    @metakermit

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