How to Plan Your Kickstarter – part 3
And here we are in part 3. I hope you’ve got a solid budget for your project, a strong reward structure, and are looking forward to tackling that hypothetical list of backers in the third section of the spreadsheet. And in case you need it, the .xls version.
Now we come to the most important part of planning your Kickstarter: your backers themselves. If you’re an artist doing your first Kickstarter, almost all of your backers will be people you already know. The people who will back your project are your friends, your family, and your extended network. And before you launch your project, you need an idea of how much money they’re going to give you. It’s not going to be perfect, but it’s really going to help you.
After all, without a revenue projection, how are you supposed to know if your budget is the right size? That’s how people end up with 10% of a Kickstarter goal that’s way, way too high.
You won’t get water from a stone
Yes, strangers back Kickstarter projects, and sometimes projects go viral and raise tons of money. Do not plan for that to happen to you. Do not expect the internet to bless you with money. It almost certainly won’t.
If you want to build a solid project that will actually work, you need to go through your entire address book, your Google Contacts, your Facebook friends, your Twitter followers, and your Tumblr followers one by one. You need to be honest with yourself about whether you think they’ll give you any money, and if so, how much.
This whole process will only take you a few hours, but you’ll need to be careful about it.
This is much harder to do than it seems
It’s actually really hard to be honest with yourself about the money people will give you. In a way, you’re putting a dollar amount on their love for you, which is very uncomfortable. But it’s the only way to get a real idea of how much you’ll raise.
Your brain has an amazing ability to try to weasel out of going through everyone name by name and saying whether they’ll give you $0, $10, or $50. You’ll think of all kinds of weird excuses. You’ll let yourself get overconfident, and paper over the details. You’ll say things like “I don’t need to do this, my project is so great it’ll go totally viral,” and “My family will cover it if I come up short”, and “everyone says I should do a Kickstarter, so this is absolutely going to work,” and “I don’t want to put a dollar amount next to the people I love!”
But every one of those answers is just a way to avoid responsibility. Then you can get to the end of the process and say “It’s not my fault that my Kickstarter failed. It’s that everyone else didn’t step up”. But really, you should have known.
Going through everyone, by name, and being honest with yourself about what you think they’ll give you is incredibly valuable. It will wash away all your muddy thinking, your wild guessing, and the way all of our minds have of tricking us into thinking we’re doing well. Do this, and you’ll be focused on what’s realistic.
It’s just a projection, but it’s a better projection
You’ll be wrong about some of the numbers, of course. People will surprise you with big gifts, and people will surprise you by being stingy. Some people will pledge $100 for no reward, which will save you money, some complete strangers will give you $5, and some people you thought would always be there for you will tweet about your project but refuse to give you a dime.
But if you do it this way you’ll be off by a few percent in either direction. If you just take a wild guess you’ll be off by much, much more. That’s a risk you just don’t have to take.
Backers dictate rewards costs
This is where the real magic of the spreadsheet comes in. It automatically calculates the number of backers at each reward level, and multiplies that by the cost per unit of each reward to calculate how much it costs to make and ship rewards to all of your backers. This will tell you all sorts of things: how many envelopes you’ll need to buy, how many weekends you’ll be spending with a cramped hand from writing all those thank you notes, and how many private performances you’ll be giving.
Doing it this way gives you a very strong grasp of just how much money and just how much work is really involved in doing your Kickstarter campaign. It’s easy to get in over your head with these things, and suddenly wind up with not enough money, too much work to create rewards, and overbudget on your actual project itself.
How to check if you’re being realistic
Once you’ve made up all these numbers for everyone, you have to ask yourself if you’re credible. You’ll want to compare your projection with numbers for the whole of Kickstarter, and see if what you’re expecting is at all typical. (pro-tip: if you think it’s okay to expect an atypically successful campaign, then you’re doing it wrong).
Kickstarter recently launched a stats page. It updates daily with aggregate numbers for Kickstarter. Most of these are interesting, but a lot of them aren’t the sort of thing you need to know to figure out whether you projections are any good. To do that, comb through all of Kickstarter’s blog posts in the data category. Or spend some time analyzing projects similar to yours with kicktraq.com.
Here are some rules of thumb you can use to check your projections:
- The most common gift on Kickstarter is, at the time of writing, $25. This has been pretty stable for a while, but expect it to gradually rise.
- The average gift in all of Kickstarter is around $70. For smaller artistic projects an average gift around $45 is totally realistic. An average gift near $100 is way out of the ordinary, and it probably means you’re expecting too many large gifts.
- A lot of people won’t back you. There’s no way to get good stats on this, but I’d expect a sizable chunk of your address book to flake out. If you’re counting on everyone in your address book backing your project, then you have a problem.
If your projections fit these rules, then they might still be off-target. But if your projections don’t fit them, then you’d better have a very good reason why, because they’re almost certainly wrong.
Strangers & no reward backers
This spreadsheet, and this technique, don’t take them into account. In my experience if you get anything like 15% of your money from strangers, you’re doing great. My spreadsheet doesn’t include a multiplier for this. I also don’t include people who’ll pledge for no reward. You’ll have a few of them. Both of these exclusions from the spreadsheet are for the same reasons: 1) keep it simple, it’s just an estimation anyway, and 2) always budget conservatively.
This way, the mistakes you’ll make in the planning process will make you safer in the long run.
I have lots of audience members I don’t know by name!
That’s awesome. Good for you. You’ve got to model their behavior in a more sophisticated way, based on what they’ve bought from you in the past. Very few people are in your situation, and you should count yourself lucky.
Also, do you really not know their names? Take another look at that mailing list. Take another look at your sales records. If you have an existing audience that’s great, but try hard to know who they are. It can only help you.