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Crowdfunding: Tapping The References To conclude, this essay has demonstrated what factors were used by the Pebble campaign to achieve success via Kickstarter. Inclusion of a video pitch allows for a real world feeling to be added to your campaign and give the potential backer the opportunity to virtually meet the creators behind the project if the creators are included within the video. Keeping the length of a campaign at 30 days or less greatly increases the chance of being successful via interest in the campaign being able to be sustained throughout.
The use of social media streams such as bloggers directs traffic to the page and keeping your backers constantly updated makes the campaign credible and puts backers at ease knowing that the project creators are working hard behind the scenes. Overall, these factors being used by the Pebble campaign resulted in its success in achieving funding. Lastly, in an interview with Draper TV in April 2015, the CEO of pebble explains the importance of arranging the website Engadget to be their exclusive launch partner. Migicovsky explains how the article announcing the Pebble watch to the world went live at 7AM on the day of the Kickstarter launch. As a result, a large amount f traffic was directed to their crowdfunding page within the first few hours. After the article went live, it took just 2 hours for Pebble to reach their wanted funding amount of $100,000.
Migicovsky and his team strove to maintain the interest and traffic to the crowdfunding page throughout the whole period, by using PR. Migicovsky further explains how he used PR to maintain interest by stating that he spent 6 hours a day doing PR for the project; as a result, articles were published by CNN and The New York Times (Draper TV, 2015)Another reason why the Pebble campaign was successful was because of the creators keeping their supporters in the loop; with regular updates and information being sent out on their campaign page before, during and after the campaign. ‘Backers appreciate regular, insightful, and honest updates and if backers don’t hear from you for a while, they worry that you may be having trouble doing the work you promised’ (Kickstarter.com,2018). In relation to Pebble, they posted regular updates on their campaign page and social media platforms; such as when funding landmarks were reached, new apps being added to watch etc. The creators of Pebble committed to keeping their supporters as updated as possible, posting 55 updates in the 30-day funding window, (with the average successful campaign posting just 4 updates (Yeh,2015).
This commitment of publishing regular updates during the fundraising period enabled the Pebble team to strengthen the credibility of their project (Evers,2012). Via the constant updates and backer communication, supporters of the project were assured that work, development and attention to the project was constant, as well as possibly attracting additional support to the page through the commitment of the Pebble team being evidenced through these regular updates. It may also be suggested that the regular updates surrounding the project demonstrates the project’s interest in its supporter’s requirements. Opinions, questions or concerns raised by the backers were not only listened to, but were responded to via these updates, often even adapting certain aspects of the project to fit into customer feedback. An example of important customer feedback during the campaign was the worry that the Pebble watch was not waterproof, as a result the Pebble team went away and tweaked the design to make it waterproof. In addition, the digital media company MWP conducted video analysis on 7,196 Kickstarter projects, to see what advantages including a video had for the projects overall success.
Through their research they found that projects that include a video pitch are 85% more likely to achieve their funding goal. In total 48% of the projects that include a video achieve their funding goal, while 26% of the projects that do not have a video achieve their funding goal (Davidson,2018) One specific aspect that is covered by crowdfunding literature is the argument of the importance of including the project founder/members in the video. Egger and Fogg et al give advice on how to maximise trustworthiness in e-commerce and state that presenting real people of a company adds credibility as well as conveying a ‘real world feeling’ (Egger and Fogg et al,2001). It also gives the page visitor the chance to virtually meet and to a certain extent come to know the persons responsible for the project (Egger and Fogg et al,2001). In relation to pebbles video pitch that was used on their funding page, Eric Malinovsky speaks directly to the camera outlining the many features of the watch as well as introducing the team behind the creation, which in turn gave a ‘real world feeling’ to their video.Here the project has just a few minutes to convince the public it has potential and convey its story to them.
Kickstarter introduces some insights into video pitch making in the creator handbook. Suggesting that videos should include the creator/creators describing who they are, what they do, where the project came from, plan and schedule, the budget and lastly why you should care about the project. In relation to the Pebble watch, it can be seen via watching the video included on their funding page; that many of these questions are answered in their pitch video. In terms of producing the video pitch, Kickstarter, via a blog post on the website have put forward some tips on how to make a successful video.
The tips are based on their interaction with teams that have ran successfully funded campaigns on the platform in the past. Keep it personal is one key tip, by putting yourself in front of the camera for at least a moment so that people know who you are; as making a personal connection with the viewer is key (Jaeger, 2011). Also, stick to the basics is another tip, the best video pitches include all the following; introduce yourself, tell your story, ask for peoples support and explain why you need it, tell people what they’ll get for their money and lastly say thank you.Furthermore, as highlighted by Kickstarter and in Crowdfunding literature. The pitch video is of extreme importance to convince the crowd of the potential the product or service has and most platforms advice entrepreneurs to explain their ideas through a video, even if it is not guaranteed people will watch it (Bradford,2012). In fact, more than 80 percent of projects are using a pitch video to explicate the idea and those are in fact the ones which are more likely to succeed (Kuppuswamy & Bayus, 2014).
Another crucial success factor in crowdfunding campaigns is the use of social media to spread the word. The basic assumption is that social media will help the project creators to establish new contacts (Beier and Wagner, 2015) who then may become a funder of the project. Migicovsky and his team created Facebook and Twitter pages for the project and regularly posted information and updates before and during the campaign. However, the Pebble made a huge effort to reach out to the media; by approaching 70 bloggers when the project went live as well as recruiting website Engadget to be the projects official launch partner.
As a result, Engadget announced the campaign exclusively via their website and social media pages. In turn, the Pebble campaign gained a huge amount of attention and web-traffic to their Kickstarter page. As a result, giving the Pebble more chance of being successfully funded. Firstly, Kickstarter allows projects to raise funds for up to 60 days, but encourages 30 days or less as their research suggests that projects lasting longer are rarely successful, as shorter campaigns set a tone of confidence and help motivate your backers to join the party (Kickstarter.com,2018). Mollick also observes through his research into factors associated with success and failure, that duration decreases the chance of success. Stating that this may be because a longer duration can demonstrate a lack of confidence from the creators (Mollick, 2014).
Dontham also concluded through their analysis of selected crowdfunding campaigns, that decreasing the project duration was helpful to make projects successful (Dontham,2016). Migicovsky, in his interview with The Huffington Post, further emphasises the importance of choosing a shorter campaign length, stating that he and his team chose to run the ‘pebble’ campaign for 30 days, based on their independent research into past project successes on Kickstarter. Migicovsky personally felt that this duration kept it short and fresh, as well as attracting lots of media coverage at the beginning and towards the end of the campaign. Specifically, the Kickstarter project we will look at is the ‘Pebble E-Paper watch for Android and iPhone’, which ran a campaign on the website from 11th-18th May 2012, looking to receive $100,000 worth of funding. The product marketed itself as an E-paper watch, compatible with both iPhone and Android, allowing users to customise it with an array of watch faces, sports and fitness apps, as well being able to receive notifications from your phone directly to the watch itself (Kickstarter.com,2012). However, the campaign captured the imagination of the “crowd” (the mass of individuals), with the campaign concluding with $10.
3 million worth of funding being received. 68,929 people pledged money towards the project in its 30-day duration, subsequently making the project the most successful on Kickstarter.com to that date. Kickstarter.com, which launched in April 2009, has reportedly to date received $1.
9 billion worth in pledges from a total of 9.4 million backers, to fund 257,000 projects. Funding on Kickstarter.
com is all or nothing; no backer will be charged for a pledge towards a project until it reaches its desired funding goal (Kickstarter.com, 2018) and if the project does not meet its desired funding amount, then the creators receive nothing at all. In addition, rewards are offered to backers for pledging money towards the project, typically these are one of a kind experiences, like limited editions of the creative work being produced and offer the creators of the project the opportunity to share a piece with their supporting community (Kickstarter.com, 2018). Even though the progress of the Kickstarter domain has been outstanding, the success rate of projects has not been very impressive, with recent statistics report a success rate of less than 50%. However, Crowdfunding as a concept has existed for many centuries but as result of the financial crisis of 2008, more and more people wanting to launch a business idea are turning to alternative funding methods than the traditional start up finance streams such as bank loans and venture capitalists.
Although, with Crowdfunding being a new phenomenon, crowdfunding and its consequences for company and customers are not completely understood (Ordanini et al, 2009). Potential benefits and drawbacks have been put forward in crowdfunding literature; one such benefit being that crowdfunding can be used for firms to develop and product and test if there is a market for it (Bradford,2012), as well as creating a form where project creators and backers can collaborate with one another in a cost-effective way (Bradford,2012) Additionally, drawbacks that have been put forward are that in the event that a project cant be achieved it results in a very public failure. Also, without the necessary regulatory agenda, the probability of pledging money to a scam is very high (Bradford, 2012). Crowdfunding can be defined as involving an open call, mostly through the internet, for the provision of financial resources. These can either be in the form of donation or in the exchange for the future product or some form of reward (Belleflamme et al., 2014). Additionally, a vital component of crowdfunding is that it takes place in a virtual setting, with investors typically watching pitch videos and investing over the internet (Mollick, 2014).
In this essay, a successfully funded project from the Crowdfunding website Kickstarter.com will be critically analysed, to gain insights into why and how it has been successful in achieving funding via this financing platform. Prior studies have identified several factors associated with the success of a crowdfunding campaign. Factors including shorter campaign duration (Mollick,2014), the importance of including a campaign video pitch (Mollick,2014), regular project updates (Evers,2012), the use of social media (Beier and Wagner, 2015) . These factors will be explored further in this essay and linked to the ‘Pebble E-paper watch’ campaign, to see if the Pebble campaign incorporates such factors.