Our crowdfunding campaign is now over and we are pleased to announce that we raised €25,000. A round of applause goes to the 187 supporters who made this possible! The project is on track and we plan to ship the final Nitrokey Storage devices at 2nd May 2016.
Although we missed our flexible target of €60,000, we are still pleased with the outcome. The sum raised will enable us to pay the largest fixed cost - the moulding tool for the casing. All other costs (apart from our own development effort) depend on the amount of devices produced and will be smaller than estimated because less units will be produced (our initial calculation was based on 1000 units).
There are a number of good online resources describing how to run a successful crowdfunding campaign. If you run your own crowdfunding campaign make sure to research and prepare well. In addition to all the excellent online resources, we would like to share with you the lessons we learned through this experience:
- Choose a flexible target if you are eager to execute the project despite the campaign's success. In this case choose a low target and offer several optional goodies that will be given to donators should the target be exceeded. For instance: "If an additional €5,000 is collected, we will develop feature X." If you cannot commence the project without a specific sum of money, choose a fixed target. In this instance don't be overly ambitious; choose the lowest possible sum with which you can execute your project. You can still offer optional goodies should the target be exceeded. A lower target is important for two reasons: It's easier to achieve, and you increase the chance of being featured by your crowdfunding platform. This is because some crowdfunding platforms use an algorithm to pick featured campaigns that is based on campaigns achieving a high percentage of the target amount in the first few days. This applies to Indiegogo (at least), while Kickstarter selects featured projects manually.
- If your campaign addresses a specific demographic or niche rather than the broader public, it may be difficult for you to reach out to a sufficiently large number of people. In that case you may consider cross-promoting with another similar crowdfunding campaign. If your favourite campaign doesn't wish to engage in cross-promotion or is over already you can browse the list of their backers and reach out to them directly if their contact data is published.
- These days many specialised crowdfunding platforms exist. We were in favour of using the largest ones, Indiegogo and Kickstarter, as we felt we would be able to get more backers through a larger crowdfunding platform. We chose Indiegogo because they support flexible targets and PayPal. PayPal is important for our German and European crowd, while Amazon Coins (see Kickstarter) is quite unpopular. Although we would be reluctant to use Kickstarter in future, we might consider smaller specialised platforms if they help promoting the campaign.
- During the planning phase we discussed the option of a crowdfunding campaign without a specific crowdfunding platform. This would have saved us roughly 5% of the total sum, which otherwise went to Indiegogo. We still believe that a well connected and managed campaign with a trusted project team doesn't require a crowdfunding platform. In our case we collected about 20% of the sum from backers coming from Indiegogo (compared to 5% platform fees), which was worth it.
- A successful campaign requires intensive preparation and management. Try to get a significant amount of informal confirmations from backers even before the official campaign starts. The same applies to journalists, bloggers and other multiplicators to cover your campaign. You want those confirmation beforehand to boost your campaign during the first few days. This makes your campaign appear successful which makes it more attractive to other potential supporters and increases the chance of being featured by the crowdfunding platform.
- Shortly after the campaign began we received many offers from people/companies wishing to promote the campaign. Many of these offers offering you to tweet about the campaign or to sent mails to hundreds of thousands of people. They may sound impressive at first but in reality do not yield any results. The only serious offer we found (they didn't approach us) was BackerClub which track the revenue they attract and charge based on their success. However in our case only 2% of our backers came from BackerClub. Should you run your own campaign, we would advise that you only use such services once you have successfully evaluated their reliability. How successful are they? What do other customers say about their services? Also, does their crowd match with your specific target group? The latter was usually not the case for our privacy- and security-educated backers. Most services charge or impress you with things like "100,000 followers", "10,000 visitors", or "2000 journalists". But those numbers are quite irrelevant to you because at the end of the day the only thing that really counts is the amount of people backing your campaign. Only use such services if you fully understand what they do and don't do and if you are certain that they deliver what you want (e.g. press releases to certain news agencies). In doubt, don't waste your money with them.