One of the recent solutions invented to raise money for a project or new business is called Crowdsourcing. Crowdsourcing is often associated through the well-known Kickstarter platform that allows users to post projects online and ask for donations. But dozens of sites based around the idea of crowd funding have joined the movement, like FoodStart.com a website that’s allows only restaurants, mobile food businesses, or other culinary startups to request donations.
Launching a crowdsourcing campaign successfully, however, is easier said than done; I mean, you’re just asking people to give you money for an idea that hasn’t even proven to be successful yet… that’s never exactly been a smooth operation. But for many in today’s economy and world of student (and various other) debt, it’s an almost vital necessity to be able to grab at least a percentage of their cost needs through a website such as this, so we decided to grab some advice on the matter.
We sat down with three Trucks successful in reaching their crowdsourcing goals to discuss the strategies and concerns needed to survive this difficult field of attack. Stickball (a Meatball Pop-up turned truck), Mustache Pretzels, and Smoothe Operator each had a few things to say in regards to our questions.
Question: What originally made you feel the need and/or desire to use crowdsourcing as a main fund for your truck?
SB: My pop-up business started to grow so much faster than I could have dreamed. One day while I was sitting with one of my regulars at the bar, she asked what my end dream was for my business and I told her a food truck. By the end of the conversation she had me convinced that I shouldn’t wait and should get on it now and told me about kickstarter. In my head it would be years before I would ever be able to even think about affording a food truck.
MP: We’re sort of unique in that we didn’t use crowd sourcing as a main “start-up” fund, per se, but rather for the separate project of getting the truck wrapped. When we opened in March, we just had a plain white truck with “Mustache Pretzels” on the side; it kinda looked like the White Album cover. We had start-up funds allocated to get the truck wrapped before we opened our doors, but we wound up with some pretty costly truck repairs right off the bat. Delaying the launch wasn’t an option, as we’d already signed a contract with the Oakland A’s to set up outside their Spring Training stadium in Phoenix. So, we started to think about crowd sourcing to fund the wrap project about a month or so into things.
SO: Our whole business idea was founded on the idea of building connections between people and their food, so crowdsourcing seemed like a very fitting first step, and the most viable money source at the time. It was a great way to share our business idea to our networks and beyond.
Question: It can be difficult getting other people to willingly give you money online for your business, what tips and suggestions do you have for successfully raising the desired monetary goal through Indiegogo and other crowdsourcing sites? What sort of things did you have to do to ensure you reached your specific goal?
SB: Well my first bit of advice is to make people feel like they are part of something. Letting them know who you are and being really raw about your dreams makes people feel connected and when you feel connected you want to be a part of something . Also I think it is important to start with small goals where people can feel like there is a chance! If you reach your goal you can always push for more!
MP: It can be helpful to think of your crowd sourcing campaign as a sales pitch, while keeping in mind that (aside from the nominal “perk” or two a contributor gets) you’re really just selling an opportunity for somebody to back a winning horse, and to feel as excited about your venture as you are. So I guess the real piece of advice would be, communicate the “Who, What, Where, When, and Why” as directly as possible, then concentrate the majority of your efforts on highlighting the “So What?” factor. Communicate what your campaign’s success would mean to you as a person/business, and people will have an easier time getting excited about the opportunity to help you.
Whatever your goal is, be prepared to hit people over the head (figuratively, not literally) multiple times when asking for donations. A lot of people really and truly do want to help, but wind up missing out on the campaign because they’re busy, their original link to the website doesn’t work for some reason, their dog distracts them (I could list excuses here for days), etc… but the main point is, be ready to ask people more than once. We did it as tactfully as we could, but when the time came to flat-out harass some people, we didn’t hesitate (that’s a joke, I think?).
SO: Make a compelling but short video! We watched hundreds of videos while doing research, and found that the best videos often got the most money, sometimes regardless of worthiness of the cause. A video explaining exactly what you plan to do, use the money for and WHY you’re doing can be the perfect recipe for compelling a stranger or acquaintance to giving to your cause. The other most important item is building your Perk prizes, which can be very tricky to find something appropriate and that doesn’t cost too much for each donation level, but is definitely worth the extra effort to compel some on the fencers. We had people donating just to receive a tote bag!
Question: What are the main Benefits in Crowdsourcing?
MP: Raising money (thank you, Captain Obvious); but also, just telling your story and refining your sales pitch is helpful for any project or business. It’ll make you hone in more about what the most important aspects / selling points of your campaign are.
SO: Builds momentum within the business when you see dollars coming in, people sharing your cause and starting to talk about your ide. Puts timelines and strong, s.m.a.r.t. goals in place. Encourages Business Plan making, or at least general cost analysis
Question: What are the main Difficulties?
SB: Its hard feeling like you are bothering people and especially hard to ask people for money. Its also super stressful and consumes you for those weeks that your campaign is running. I found myself checking my phone 100 times a day to see if there were any updates.
M: Getting people to actually click the button. As I said earlier, most people really do want to help. Closing the gap between wanting to help and actively helping is the most important challenge we faced.
SO: Can be difficult to brainstorm new ways or areas to share your Page – it does become almost a full-time job. Fulfilling Perk Prizes involves a lot more time and effort than one would expect
Question: What unexpected ‘pitfalls’ are there that one should be aware of in putting their crowdsourcing page together?
SO: Not properly pricing out or cost analyzing your perk prizes – t-shirts, bags, or anything printable often come out way over budget when you throw in 2 colours, low-runs or need to ship them all over the world. Also, if you don’t reach your Goal amount most crowndfunding sites will either take a larger percentage of your money, or you won’t get any of it. Picking that right dollar amount that won’t be a waste of time, but also is achievable can be a huge gamble, especially given crowdfunding is often your first interaction with your business and the world. Do your research on what similar companies have raised, and how much time you can put into marketing.
Question: StickBall, starting as a Pop-up, you already had experience in a mobile operation, not only that but you became relatively well known before the crowdfunding attempt. How would you say that helped your situation, and do you think there’s a way for others to utilize this?
SB: Yes I think it helped a lot. I had a customer base already and people were able to see that I had a good product that they would be happy to back. I also think people say it was more than just a hobby and I really had a thought out plan with their money.
Question: Is there anything else you’d like to say about the subject, either in general or for those considering its use?
SB: Make sure the ‘perks’ that you give are reasonable. Most people will give without needing a Perk but for those who don’t, make sure they are things that won’t cause you to spend half your money on it.
SO:Get creative and do your research! Brainstorm a bunch of ideas and toss them around a trusted group of friends or strangers for a while before you find something that sticks. You will get out of it what you put into it, so don’t think creating a simple page with a couple of pictures is going to get you $10,000! Think about hiring a professional or student film-maker, or spend some time learning the craft yourself. Putting out a crappy video is almost worse than no video at all.
Dedication and planning is a key to success with any Crowdsourcing venture. If there’s anything to be learned here today it’s how much time, attention, and relentless pursuit one needs to put into the pitch for their business as well as the business itself later on.
Whether it’s getting all the details down, costing properly, or simple customer connection, we start learning and utilizing our methods of success long before we roll onto the streets. We hope you were able to find this article helpful in your future pitches, and Good Luck to all ventures on wheels.