Lessons Learned from a Failed Crowdfunding Campaign

Crowdfunding, “democratizes the ability to get things off the ground that previously wouldn’t have been able to because you may not have had the right connections,” said AJ Montpetit, local entrepreneur and Founder of WRKSHP, a Rochester-based digital marketing and creative agency. Crowdfunding, or crowdsourcing, has changed the face of business, putting the real control into the hands of the creatives behind the ideas.

“You can see art in its purest form through crowdsourcing. …It’s giving people the ability to take an idea into reality faster and easier.”

A creative mind himself, AJ turned toward crowdfunding last October to fuel his own artistic project. AJ is a huge fan of the open source community model, where people share their work for free use by others. He runs a free stock photography site called Lock & Stock Photos as well as MNML wallpapers, which supplies users with free, minimal design desktop wallpaper.

“I started seeing such a great value in giving back to the online community of creative people who I’ve gotten a lot of free stock video footage and free photos from,” he explained.

He thought that creating free drone stock video footage, that anyone could download and use for creative projects, was a great way to give back to the community. There was a multitude of imagery the drone could capture like a sunset, or an aerial view of buildings, or “maybe hovering over same cattle.”

The problem was, AJ didn’t have the funds to purchase a drone himself. He turned toward crowdfunding to create the World’s First Free Stock Drone Video Site.

The major crowdfunding websites- Kickstarter, Indiegogo, and GoFundMe- all have different utility. It’s important to understand the value of each. As AJ explained, Indiegogo has strong networking value, while GoFundMe is primarily used for personal donations like the “old mission trip letters.” These two platforms are geared toward projects and campaigns making the world, or at least one person’s, a little bit better.

AJ landed on Kickstarter for his campaign because he thought it was the most recognized name. Plus, he had participated in a successful Kickstarter campaign before, raising money for a children’s neuroscience game.

Preparing the necessary materials for the Kickstarter campaign didn’t take AJ much time; he had a clear vision of the idea and knew the involved costs. He mainly marketed the fundraiser to his family, friends, and the Lock & Stock Photos email distribution list. He was only asking for $3000, so he didn’t think it would be too difficult to raise the money.

The campaign was unsuccessful, but there were a lot of lessons that AJ gleaned from the experience.

“The one thing I learned at an early age is it doesn’t hurt to ask and it doesn’t hurt to try. Because the worse that happens is that it flops. So this isn’t my first failure at trying something different and it won’t be the last. But I learned quite a lot. One of the lessons that has stuck with me that my father taught me is when you make a mistake, you apologize, you learn from it, and you move on, and you don’t make the same mistake again.”

One area where AJ fell short was really looking at his proposal through the eyes of someone whom he had never met.

“So that’s where I failed was seeing, ok, it does look like I’m asking people to buy me a toy,” he said.

In retrospect, he thought that Kickstarter might not have been the best choice of platform for the project. Maybe a website that allowed him to collect small, monthly donations for five to ten dollars would have been more successful. He thinks he should have better explained that the funds were not only for the drone, but for other expenses involved in the project, such as domain hosting fees and gas to drive to destinations for the footage. Perhaps once potential backers saw the utility of the drone videos, they would have been more willing to contribute toward the cause.

“Knowing the right platform for what you’re trying to do is important […] because something could fail on Kickstarter, but succeed somewhere else.”

Some products have been extremely successful on Kickstarter. Take the Pebble smartwatch and accessories, for example. Pebble has run three highly successful Kickstarter campaigns, raising well over their asking amount. In 2012, Pebble ran the first ever $10M Kickstarter campaign. They broke a Kickstarter record in 2015, raising $20M. Their most recent Kickstarter in June 2016 raised close to $13M.

How do they do it?

“When the person donating can benefit, that’s the biggest success,” AJ suggested.

Pebble rewarded their Kickstarter backers by granting them early and discounted access to the product they were backing. Everyone benefits in this situation. The crowdfunding investors want the product and receive exclusive access for their support. Pebble wants to create the product; this incentive mechanism allows them to take the merchandise through full production.

 

Want to learn more about crowdfunding? Check out the other articles and podcast in this series.

How to Raise Capital: Consider Crowdfunding

Rochester Rising Episode 7: How to Run a Kickstarter Campaign with Adam Ferrari

How Crowdfunding Fueled the Med City Beat- with Sean Baker