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Lessons in the new age of crowdfunding

Posted by Michael Warshaw  November 19, 2013 12:24 PM

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By Alex Schwartz, chief scientist, Owlchemy Labs

The tech industry is abuzz with the latest way to raise capital for creative projects: Crowdfunding. It’s become an increasingly viable option for developers in the past years, maturing into not only a venue for fundraising but also a powerful promotional tool for increasing awareness.

discourse.pngWhile crowdfunding is likely here to stay, creators shouldn’t assume it’s a magic bullet. The rules of Kickstarter and others like it have changed dramatically, and creators need to be aware of them before jumping in.

First, you cannot get funded on Kickstarter anymore if all you have is an idea. Gone are the days of sketching out a concept on the back of a napkin, putting together a short video plea (with terrible audio quality), and releasing it to the world with the expectation of generating a groundswell of supporters ready to back your product / game / creative endeavor. As Kickstarter backers realize that creating new products is risky business, expectations rise and they demand more and more from creators during the campaign itself.

What I’ve learned is that in order to win over the crowd, it’s all about two things: polish and confidence. Polish is a must for new Kickstarter campaigns because backers don’t want to support a concept, they want to fund a tangible thing. Your goal should be to maximize polish in the product presentation, something that’s extremely hard before you have a following and money! When it comes to arriving at polish, you must somehow get to the point in product development where you can show something significant and working, not just a super-early prototype. It has to look and feel good enough to strike a chord in the viewer and show them exactly why they truly need your product.

As for confidence, showing a prior track record and proof that you and your product won’t become vaporware is paramount to success. Momentum is also a huge method of instilling confidence.

I suppose I’m probably not the the first person to have coined the term “The Restaurant Effect.” I posit that the law of restaurants is not dissimilar to the law of Kickstarters. Have you ever noticed that when you’re walking by a crowded restaurant with a line out the door, you think, “Wow, that place must be good!”

On the other hand, a completely deserted restaurant breeds foreboding thoughts about that establishment. One might think, “Well, I guess their food and service is pretty terrible if no one even bothered to walk in!”

This is one of the core tenets of the Kickstarter mindset. Don't be afraid of using “Early Bird” or limited-run tiers. Visitors won't arrive to a sold-out tier and think, “Ahh, I missed it, I guess I’ll head home and not be a part of this.”

Instead, people want to be part of a movement - that’s the Kickstarter mentality. Everyone wants to be a part of a winning team and go with the sure thing because it validates their assessment. When a consumer feels that the populous agrees with them, it really drives confidence in a project.

Right now, our current project on Kickstarter is Dyscourse. It is in-progress and partially completed, and can be found at http://dyscourse.com. Take a look, and you'll see just what I mean: Polish and confidence!

Alex Schwartz is founder and chief scientist at Owlchemy Labs.

The State of Play blog, organized by MassDiGI, features posts by digital and video game industry insiders writing about creativity, innovation, research, and development in the Massachusetts digital entertainment and apps sectors. MassDiGI, based at Becker College, is a statewide center for academic cooperation, entrepreneurship, and economic development across the local games ecosystem. Follow along @Mass_DiGI.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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MassDiGI 8-24 287w872.jpgThe State of Play, organized by MassDiGI, features stories by digital and video game developers and business insiders. Follow along @mass_digi.

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