Successful $5 Million Crowdfunding Campaign: Top 6 Takeaways
This case study follows the wildly successful Kickstarter and Indiegogo campaigns for the hardware startup UVMask. Learn how they leveraged timing, smart advertising, and even a graphic design blunder, to raise over $5 million in funding.
This post is written by Ivo Kalburdzhiev, Campaign Strategist and Project Manager for UVMask. He is also the CEO of CreatorClub.com – a community-based, e-learning platform for startups to launch and grow innovative, physical product businesses through crowdfunding, e-commerce, and beyond.
Here are my top 6 takeaways after spending 7 years in the tech fundraising industry and helping startups raise tens of millions on Kickstarter and Indiegogo, all culminating in my involvement with the UVMask project.
UVMask is a next generation, wearable air purifier that uses UVC light to sterilize the air you inhale.
When we were first approached by UVMask, we didn’t have any idea it would go on to raise a combined $5.5 million on Kickstarter and Indiegogo.
The milestones we hit along the way were exciting:
- $100,000 raised in 48 hours with a small list
- $3,000,000 raised within 50-days of going live Kickstarter campaign
- $5,500,000 (total) raised within 6 months of going live
This graphic shows the behind the scenes numbers:
AOV stands for Average Order Value or the total average funding per backer. Summing up Kickstarter and BackerKit, and Indiegogo and CrowdOx respectively, we are looking at ~$300 AOV, given that the core product started <$99.
You can read about how we tripled the value from the regular price in takeaway #5 down below.
This may seem obvious, but one of the main reasons why UVMask was so successful in the first place, and why we hit multiple 7 figures, is the timing.
In a must-watch talk on Why Startups Succeed, billionaire-investor Bill Gross sheds light on the importance of good timing.
UVMask launched amid a global pandemic where everyone on earth was in dire need of the best protection possible from the virus. The creator promised the ultimate solution, a mask that could sterilize the air right before you inhale it.
Here’s another example. Coolest Cooler’s first campaign launched in December and failed to reach its goal (thankfully), raising a mere <$100k. A few months later, it re-launched in the summer for a record-breaking $13M.
You also need to be aware of seasonal trends. I often see winter products (jackets, ski accessories, etc.) launched in the summer/autumn in the hopes of backers receiving them for their winter adventure or holidays.
Or vice-versa, summer products get launched earlier in the year in the hopes of sending them during the summer period.
Don’t make that now-obvious, but unwise mistake.
You must launch when your potential backer is thinking about the problem you are trying to solve. Not earlier, not later.
Consider board games for a minute, when do people spend the MOST time playing? Is it during the summer when they are often out with friends or dining out, or is it in the Autumn-Winter season when it’s cold outside and they tend to stay inside the house?
How much should your campaign raise in the first 48 hours?
The truth is, even raising $10,000 in the first 24-48 hours sets you on the path for great success, given that the average amount raised on Kickstarter is $10,000 — total!
Let that sink in. Your only goal, in the beginning, is to cross your initial funding target. This sets you up with the momentum you need to keep going throughout the entire campaign.
The fatal mistake startups make is simply setting their funding goal way too high. Like the guys from Ubuntu Edge:
Yes, you read that correctly —their fixed funding goal was $32 million.
When I came across the campaign back in 2013, I thought it was a joke. But, they ended up breaking the crowdfunding records at the time, raising over $12 million!
Sadly, it was “Fixed Funding” — meaning they had to reach their goal in order to collect their funds — so no money changed hands.
For UVMask, we went with a modest goal of $20,000 that we reached within a few hours of going live.
But what if the funding goal that you set is not enough to cover your costs? This is an important question, and the answer is simple -I guarantee you will not get any meaningful funding if you start high in the first place!
It’s the age-old chicken or the egg problem! People see a high funding target, so they don’t back it for fear that the project will not get fully funded.
This means the funding remains low, and other visitors won’t back it because it doesn’t have social credibility — a very hard loop to break out of!
And sure, people probably know Kickstarter doesn’t charge money upfront, but this is a strong psychological block they simply can’t get over.
So my advice is to start low — as low as possible while also making it realistic (i.e. don’t ask for $5,000 if you are launching a campaign for an e-bike that costs $2,000).
You’ll have a 10 times higher chance of hitting $100,000 if you start out with a funding goal of $20,000 and reach it, than if you start off with $100,000 right out the gate.
And remember — even if you don’t reach your desired end target, you can always cancel the campaign before the timer hits zero. No harm done.
What’s the formula for setting and quickly reaching your initial funding target?
Imagine you are a band performing a concert. You need fans — or an audience — to show up. If you have no fans, you can still play, but playing for an empty stadium is no fun! And you won’t be collecting anything at the gate either.
Now, let’s look at an example and do a little math. If your product costs $100 and your initial funding goal is $20k, you’ll need 200 people to back you in the first 24-48 hours in order to reach that goal.
And assuming 4% of your subscribers (fans) convert — a fairly typical number if you target the right people and at this price point — you’ll need 5,000 subscribers before you launch!
How do you know a launch was successful?
I was not surprised to see that our UVMask campaign quickly crossed the $50k milestone, and within the first 48 hours, we hit 6-figures!
It was a new campaign, from a new creator with a brand new concept, yet it was already trending towards 7-figures easily!
To do this for UVMask, we relied mostly on Facebook ads, our own community, and the Kickstarter algorithm which instantly picked us up because of the record-breaking action.
Here’s the breakdown for the first 24 hours:
We had a 5% conversion rate — which means 1 out of every 20 visitors to the page backed the project!
The average order value was rather high at $161 — and this would increase even more over the duration of the campaign. The funding per visitor was also high at close to $8.
These stats were enough to convince us that we were onto something big.
And this success propelled the campaign forward. It became our most successful campaign to date with over $5.5M raised — and it was the 14th most successful campaign in its category on Kickstarter.
The other main factor that contributed significantly to the initial success of UVMask was Facebook advertising.
With the help of the Sprint Crowdfunders’ Fund, we spent over a quarter of a million dollars on Facebook ads!
That might sound like a lot, but thanks to our tight preparation, we had our first sale from ads just an hour after the launch and achieved an average of 9 ROAS (return on ad spend) during the second day of the campaign.
All our ads had “just launched” badges or text, mentioning that it is essential to let people know about the early bird deal.
Not everything went well, of course, although you can’t tell 🙂
Yep, UVMask just “Lunched” instead of just “Launched!” Whoops! Did we turn it off? Nope!
Instead, we owe most of our early advertising results to this silly mistake. Facebook’s algorithm rewards advertisers for high rates of engagement. And can you guess which form of engagement has the highest impact?
When the ad went live, a lot of people were eager to “correct” us. Nobody could resist commenting that it’s not “Lunched” but “Launched”.
And since comments are one of the highest forms of engagement, Facebook’s algorithms showed it to more people. And we noticed some abnormally high conversion rates! So instead of turning it off, we joined the jokers in the comments and began making our own jokes.
It’s always good to face your mistakes and make fun of them, especially when they’re the reason for great results!
Do you need to start filling your copy with mistakes from now on? Absolutely not! There’s a significant risk that this will backfire, that people will start reporting them, and that Facebook will block your ads. But always think of ways to increase the engagement of your ads!
Another key to our advertising success was broad targeting. Dust, pathogens, viruses, and pollution are universal, and realizing that gave us the idea to broaden our targeting for related interests/topics to include things that didn’t seem related at first sight.
In doing that, we got a BIG help from Google Analytics — the Affinity and Other Interests categories helped us to go in directions that we hadn’t even considered.
We sorted out all the sources according to transactions and carefully checked out which source had the highest eCommerce conversion rate.
So we went ahead and created ads on Facebook targeting people with those interests, which helped keep the momentum going.
The best performing interests were News, Business and Finance, Cooking, and Astronomy — yes, we were as surprised as you about the last one!
Bought a mask? Great! What else would you need? That’s right, filters!
What else? Silicone straps, in case yours have worn out.
What else? If you are into a more comfortable experience, you could go for the premium straps! The front shell was swappable, so we offered different colors for those who wanted different looks every day.
UVMask Lite was a perfect addition for lower-risk situations like going through airport security and not getting into trouble with batteries.
The hard case was for those who were carrying the mask in their purse or backpack. The +1 year optional warranty served as an extra protection service similar to Apple Care. Do you see a trend here?
Everything started with UVMask and then morphed into an ecosystem of products that you would be interested in and spend some money on.
Think of the “Frequently bought together” section that you see on Amazon that is looking to offer you completing products, services, and accessories.
Make a list of all potential add-ons, accessories, services, and complementing products that could make the experience:
- more enjoyable
- more practical
- more convenient
Another successful tactic we used was charging for shipping in our post-campaign surveys on BackerKit and CrowdOx.
That essentially created a payment plan where backers had to pay the first installment on the spot when the campaign ended, and the second one came in a few weeks later, allowing them greater flexibility.
Even after such a massive crowdfunding success, unfortunately, the UVMask creators have disappointed backers.
There are various reasons, but the main one was the aim to rush the product to the market before it was completely tested and ready (just like with many new product ideas).
Breathing with the mask wasn’t ideal, the airtight fit wasn’t tested enough, the mask was rather heavy to wear, and it looked somewhat bulky (although also cool).
To put even more gasoline on the fire, the campaign offered an (unwisely added) 30-day satisfaction guarantee which backers requested, and which created even more headaches.
The Hardware Academy can help you forecast, and avoid, these types of issues. The Academy offers countless resources for startups to prepare for the complexities of production, as well as connecting you with vetted manufacturers and suppliers.
Before jumping into crowdfunding or manufacturing itself, make sure to have a tested prototype that can also be produced at an acceptable price. A beta-tester group always helps to gauge initial feedback and reactions.
Lastly, try to underpromise and overdeliver. Shipping always takes more time than expected, so add a buffer of at least 2-3 months to your most pessimistic timeline.
We are teaching these and many more advanced tactics that contributed to UVMask’s success in CreatorClub.com. Enrollment is currently closed, but if you are interested in joining now, shoot me an email at firstname.lastname@example.org.
Other content you may like:
- Startup Crowdfunding Campaigns That Far Exceeded Their Goal
- How To Avoid a Failed Crowdfunding Campaign for Your New Product
- The Right Way to Bring a New Product to Market
- The Importance of Early Marketing, Selling, and Networking for Hardware Startups
- Lesson 3: The Strategic Way to Develop and Sell Your New Electronic Hardware Product