This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hello, hello, what's up? This is Chris Guillebeau with Side Hustle School. I'm actually recording this episode live from the Dallas-Fort Worth International Airport, one of my most frequently-transited hubs. And I found a little spot here in the corner that doesn't have much noise. And I'm just gonna ignore anyone who's looking at me strangely because I've got something important to do, which is record a story for you.
And today's story is an interesting one. We have talked in the past couple of episodes about crowdfunding. In fact, a number of projects that have been featured on the show this year have been successfully crowdfunded using Kickstarter or Indiegogo or some other model. In episode 217, there was a story of the man from Hong Kong who raised more than $60,000 in two Kickstarter campaigns. And following the weekly recap, yesterday's episode 219, about two friends who start a $25,000 a month paleo business, they also had a very successful campaign raising more than $50,000.
And today's story is about someone else who does crowdfunding, but the focus is not on the crowdfunding projects that he's had. He actually had some big successes raising more than $4 million on crowdfunding, but then he realized that there are a lot of other people starting projects who need help doing crowdfunding. So naturally, he's put together a little side hustle doing that. And I'll tell you all about that, along with four specific tips, perhaps for your crowdfunding campaign. That story and those tips come in right up.
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Today's story features a man named Derek Miller, who in 2013 successfully crowdfunded more than $750,000 at his day job working on a very popular YouTube show with more than 7 million subscribers. Now as successful as that campaign was, he says he also made a number of silly mistakes that cost them money. And it was then that he first had the idea to put everything he did and everything he'd learned into a book that could help others with their crowdfunding campaigns. But even though people would ask him for advice and occasionally he did some informal consulting, the idea went away for a couple of years. And then in 2016, he helped raise more than $3 million in another crowdfunding campaign for a card game called Joking Hazard.
Once again, people started asking for his help, so Derek pushed himself to start putting all of his ideas down on paper. To help himself stay focused, Derek signed up for Bminder, a productivity app where you basically bet on yourself to finish a specific goal. And if you don't, you lose money. This unconventional productivity process, along with waking up an hour early and going on a media diet, helped him to make a lot of progress in getting that book researched and written. But as he started writing his ideas down, he realized he needed more stories and examples than just his own.
He began emailing around to people he knew, asking if they'd be interested in being interviewed for the book. And during this process, he kept running into people that actually needed help on their campaigns, and he realized there was a need for crowdfunding consulting, but he didn't know that there were actually already individuals and firms doing that. Once he had this realization, he thought, "Well, maybe I can do it too." So he began to organically mention that he was open for consulting, and he picked up his first couple of clients without doing much pitching. Now, during this process, someone asked if they could interview him for their podcast on crowdfunding. And Derek realized he didn't have a website, he didn't have an email list, or anything similar.
So he signed up for MailChimp, he made a website using Squarespace, and slowly began building up some content on that new site. In total, he spent about $1,000 on startup costs, building that website, using LegalZoom to set up an LLC, and buying every book and course on crowdfunding that already existed. At this point, he's brought in nearly $10,000 in 2017, and is expecting another $20,000 from various campaigns by the end of the year. He's also still working on that book, along with a video course and paid workshops, so that he can scale a bit beyond the one-on-one consulting. While this side hustle is turning out to be profitable for Derek, he's also excited about some other benefits.
The knowledge he's acquired and skills he's learned have helped him grow beyond what he imagined. Instead of having to ask for or wait for projects, he could simply decide he wanted to learn about landing pages and sales copy, and he has the freedom to immediately see if it's working. Now, since Derek enjoys helping out with crowdfunding campaigns, he was nice enough to give us his top four tips for running a successful crowdfunding project. And the first tip is what he calls the 40/72 rule. Basically, if you want to have a 98% chance of success, you should have enough potential backers in your email list to be 40% funded within the first 72 hours of your campaign.
And that's because successful campaigns tend to get funded even more. When you raise money quickly, it gets noticed by Kickstarter or Indiegogo staff, and your project will often be labeled as a staff pick or a project we love, some kind of little icon or branding that essentially serves as an endorsement, and that increases your campaign's revenue further. Now, the second tip is whenever possible, own the relationship with your backers. What he means by this is tied in with the first tip, your email list is the most important asset. If you have social media followers, that's great, but those people are usually only loosely interested, and increasingly, you have to pay for advertising to reach them, so you don't actually own that relationship.
He says if you don't own any relationships, you're essentially on borrowed time. Tip number three, minimize complexity. Focus only on the product you're trying to sell. Don't waste your time with t-shirts, miscellaneous merchandise, or other add-ons. If your product can't sell itself without the add-ons, you're not messaging or targeting your backers correctly.
Plus, all those extra items quickly increase cost and complexity after the campaign, wasting money that should be spent on your project. And the fourth tip, ask for help. Derek admits to being stubborn, sometimes to his own detriment. I have that quality too, and he says the quickest way to get clarity on your campaign is to ask people who've already done it. The crowdfunding community is very friendly and supportive.
Most of the people who've been successful in it have been successful because they've been helpful to others, so they can usually save you massive headaches with a simple ask. Oh, and here's one bonus tip. Before you consider your own crowdfunding campaign, back at least five projects, preferably large ones, and then follow their process closely. Take notes on every step of the campaign, marketing, management, and fulfillment. Read all the comments on the site as well.
That will help you understand the psychology of the backer. In other words, if you really want to understand what a successful project's lifecycle looks like, watch it through the eyes of a supporter. In addition to Derek's other advice, that should give you the quickest insight on how to make a project fantastic. [Music]
Well, congratulations to Derek. Crowdfunding is huge and people need help with it.
So it's not surprising at all that those who've been very successful with it do have a wealth of information to share. And of course, a lot of it is free. But if you're trying to raise a lot of money and you're kind of going all in on something, why wouldn't you want to pay for some specific consulting or coaching from someone who knows how to do it right? That's what Derek has discovered. As you heard, he's made $10,000 from this side hustle already on track to do $20,000 more by the end of the year.
And he also seems like a pretty helpful guy. Wherever you're listening from today, I hope you enjoyed this episode. As always, remember, inspiration is good, but inspiration with action is so much better. Today's show notes, including some crowdfunding resource links, are online at sidehustleschool.com/220. Check it out, let me know what you think.
I'm now gonna finish this airport recording and get on a flight. I'm Chris Guillebeau for Side Hustle School. [Music]
