This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hello, hello, greetings, what's up? Welcome to Side Hustle School. My name is Chris Guillebeau, so glad you are here. This is the bi-monthly classroom episode. Every other Monday, we look at a specific topic related to starting or growing your project.
That would be your money-making project. That's what it's all about, helping you achieve financial security. So you can do more of what's important to you, whether you want to be a full-time entrepreneur eventually or not, if you have no interest in that, that's fine too. But everybody should have more than one source of income. That's the common value that unites us.
Now, if you'd like to check out any of the archives from the classroom series, just come on over to sidehustleschool.com/classroom. On that page, you can scroll back and take a look or a listen. I always want to encourage you to use your time well. So if some of these topics are basic, if you're like, I already know that stuff, then that's okay. You know, you might not need that particular episode.
We still have two new stories or case studies each week, along with all the interactive new features such as questions and answers and Throwback Thursday. Now today, we're going to look at the topic of crowdfunding, crowdfunding basics and best practices. Why would you consider, when you're thinking about your different ideas, why would you consider a crowdfunding campaign? There are two pretty big and obvious reasons. One is, well, you know, money, but it's not just money.
It's also partnership, public relations, getting interest in your project, overall support, et cetera. I kind of put all those things in that secondary reason, I suppose. But you know, money and other forms of support. Now, some projects are better suited for crowdfunding than others. So I want to say this here at the top as well, because not every project can go this route, okay?
Kickstarter and the other platforms, which I'll talk a little bit more toward the end of this episode, all those platforms have their own kind of best practices in terms of the projects that tend to do very well, okay? And manufacturing, at least with Kickstarter, is the classic category. Because with manufacturing, it's like, okay, I'm going to make this thing. And we know that there's going to be some hard costs for this. We know that we want to mass manufacture it, which doesn't necessarily mean tens of thousands of units, but even a hundred units or more.
The point is that there are hard costs. It's not a hundred dollar startup or a zero dollar startup. It's actually going to cost something. And even though it's going to cost something, it's relatively easy to show the path to completion. Like we can say, okay, well, I need this much money.
If I get that money, then to the best of my knowledge, things could go wrong, of course, but to the best of my knowledge, I'll be able to make this thing. So that's why I need the money. And people who contribute to crowdfunding campaigns, they're usually known as backers. So you think of your supporters or backers, your contributors. They like the idea of being part of making something, which I think is one reason why anything that you're manufacturing or actually putting together, assembling, et cetera, why that tends to go over well with this model.
Now, that's not the only option. There are plenty of other examples, of course, but I just think if your goal is to write a blog or it's a content-based kind of side hustle, you're trying to establish yourself as an authority in a particular topic or focus, like a lot of our stories take on that model. Well, crowdfunding is probably not the best avenue for them to follow, okay? So these days, because crowdfunding is such a huge industry of its own now, these days there are consultants who advise crowdfunding campaigns. They can actually manage your campaign for you.
But without getting into a ton of detail, 'cause not everybody listening wants to even go this route, but I think it could still be helpful to have a little bit of knowledge of it, I'm gonna give you a few important tips. So here are a few important things to know if you might be considering a crowdfunding campaign or if you're just trying to broaden your knowledge. I've got eight tips here, but they're gonna go really quick, okay? So eight tips in a short period of time. Number one, be prepared to study up.
Okay, if you really wanna do this right, this is something that you need to devote some time to. This is not a 30-minute study session situation. It's maybe a 30-minute study situation over and over for a couple of months. And so number two, these kind of go together the first two, give yourself a long timeframe if possible. Now, I am all about doing things as quickly as possible, encouraging people to get to that first prototype, that first customer, that first sale, whatever it is, you know, in 30 days or less often.
But to properly do a crowdfunding campaign, like if you really want it to go well, the longer timeframe is gonna help you, first of all, to do all that learning that you need to do and to do all the preparation, which goes into the most successful crowdfunding campaigns. Number three, you want to line up early support. When that campaign does go live, you want your friends, people that have expressed interest in the past, anybody that you're connected to, you want them to make their donations early. You wanna tell them in advance, actually. You don't wanna just like put the campaign out and say, "Hey, I just launched this thing." Ideally, you're gonna have a number of people who are prepared on day one, you know, at 12 p.m. or whenever it goes live
to go and make their contribution right away. And that momentum is what's going to enable the campaign to be seen by a lot of other people. And the social proof of the donations is going to encourage more donations or contributions, let's say, because they're often getting something in return. And that leads me to number four, Kickstarter and the other platforms that do this, you often have a way to offer incentives. Okay, if you contribute $10, you get this.
If you contribute $100, you get this. You have a certain number of tiers. And often it's limited by, okay, only 10 people can get this item. You know, only 100 people can get this item, et cetera. So there's a whole process to figuring that out.
So that's why I'm just gonna say, carefully consider incentives and tiered rewards. This is one of those things where as you do that research, you're gonna get more information about, you know, the best way to do it. But the point is they're not just random. They should be carefully considered. Number five, communicate often.
Send updates, post updates, email. Like if it feels like you're over communicating, great. Keep doing it. Anytime you have some kind of update, make sure people hear about it. If some of them get a little bit annoyed, that's okay.
Like you're willing to take that hit because you believe in this project so much. I think that's the key point. You're not doing this all the time. Probably have never done it before. It's just this thing that you've worked on for a long time and you really wanna make sure people hear about it.
Number six, the most important days of the campaign are the first and last day. I've already talked about why that first day is so important. The last day or let's say the last couple of days, the first couple of days, the last couple of days, that's when you're gonna see the majority of your contributions, okay? So you definitely wanna make sure you're not over scheduled on those days. You wanna make sure you're available.
If there's any pushes you've been saving, you know, you definitely want to get those out in that last final period. Number seven, having a good video is key. So video is essential at this point, you know, to have a trailer of your project, whatever it's going to be. And, you know, you can just do that on your own or you can get some help. I would encourage you, like, if you do have some resources, you're gonna put toward this, you know, definitely try to get the best possible video.
That really does go a long way with successful crowdfunding campaigns. And number eight, see, I told you they'd be quick. Number eight, set a real goal and take some kind of risk. And when I say set a real goal, you're like, well, what does that mean? Because every crowdfunding campaign has a goal.
That's true, but I think these days a lot of people are afraid. And so they set their Kickstarter goal really, really low. And that way it gives them this boost of being able to say, oh, we met our goal in a short period of time, which, you know, is good in some ways. But if the goal is really low, it's like, okay, you've met a really low goal. You know, your goal is to raise $20, you know, for your project and you did it, that's great.
But to me, I'm always impressed, I guess, when, you know, it's like this person needs to raise $50,000 or, you know, whatever the number is, it's all relative. They need to raise a significant amount of money. And if they don't get this money, they won't be able to do the project, which is how Kickstarter originally got started. And now there are variations where campaigns can still receive the funds, even if they don't technically achieve their goal. But I like the risk factor.
I think it's bold and it just kind of issues this challenge to potential backers and raises the stakes. So I'm a big fan of taking some kind of risk and setting a real goal. All right, those are eight crowdfunding basics and best practices. We're gonna take a quick break and when we come back, I'm gonna talk briefly about Kickstarter versus everything else, like GoFundMe, Indiegogo, et cetera. And I'm gonna give you three episodes from the archives of some pretty major Kickstarter or other crowdfunding campaigns.
For those who are interested, you can go and check those out. [Music]
So I mentioned that in addition to Kickstarter, there are a number of other platforms that do crowdfunding. You're probably familiar with a couple of them. I just talked about Indiegogo and GoFundMe briefly. With those platforms, and as I said, there are many others.
Those are just the three major mainstream ones. There's also some for certain industries. Like there's a crowdfunding platform specifically for food projects. And I've seen some for publishing projects and others. But the main difference between Kickstarter and Indiegogo and GoFundMe is that at least traditionally, with Kickstarter, it was a little bit harder to get approved.
And you had to set a goal in which if you didn't meet that goal, then you wouldn't get any of the money. Whereas with Indiegogo and GoFundMe, it didn't matter necessarily. The other thing is that GoFundMe is often set up for social causes or just something that somebody happens to be fundraising for. It's not necessarily for their side hustle or for their small business. Obviously, as part of that study session, you're going to undertake, which is not just one session.
As I said, there's going to be a fair amount of work. You're going to go out and see, okay, what might be the best platform for me? Or am I going to have the most success, get the most visibility, and so on. Now, if you're interested over the years, we have featured a number of projects that have used crowdfunding, some with pretty significant results. So I'm going to send you to three of them, but there are others.
If you just want to go to the website, you can search crowdfunding on the podcast page, and you'll see a bunch of them. But here are three that stood out to me. Number 408, episode 408, "Architect Changes Commuting, One Pocket-Sized Book at a Time." That was a $50,000 project. And I think I actually went and raised close to $100,000, if I'm not mistaken. Episode 637, 637, "Jujitsu Instructor Pins Down Mobile Workout Tool." I forget exactly how much that guy raised on Kickstarter, but the thing that I was impressed with was there were some problems in the manufacturing and he actually flew to China to see the factory for himself and sort out the issues.
So that was 637. And lastly, episode 912, 912, "Bendy Straw Idea Raises $1.8 Million on Kickstarter." So you'll never guess how much money that one raised. Oh wait, I just told you. Again, episodes 408, 637, 912, "To Do This Well Is Not Easy." Let's just be clear, like to do this well is not easy, but there's a path. It's like manufacturing a product overseas in general, or writing a book, let's say like there are easier side hustles.
Okay, there are easier side hustles, but if it's what you really wanna do, if this is your vision and you're excited about something, well, don't let anybody say you can't do it, because there is a path. So as we come to our assignment for the week, I know that not everybody's gonna be doing crowdfunding. And even if you are, you're not necessarily doing a campaign this week. So our assignment is a bit different. The assignment is to think about something that is causing you stress or weighing you down, something that is burdensome, and then consider if there is something small you can do to remove it.
Something small or big, let's say, that you can do to alleviate some of that stress or pressure. Whatever is bothering you, can you take even that small step toward making it better, toward getting it out of your head, so you can focus more on the things that are important to you. That's my challenge for you, but I promise I'm gonna take it on myself as well. Again, you can read notes for this in every classroom episode this year at sidehustleschool.com/classroom. Thank you so much for listening.
Much more is coming up. My name is Chris Guillebeau. This is "Side Hustle School." [Music]
From the "Onward Project."
