There was a lot of noise made several weeks back about the record breaking project on Kickstarter that raised nearly $1M in their quest to build a series of watch kits based on the iPod nano. I didn’t pledge any cash to it; in fact, I never even clicked through to see what it was about. I saw pictures of it plastered all over the web and that’s all I needed to know. Or so I thought.
But, I bumped into Perry Chen, one of the founders of Kickstarter, just before the holidays and he touched on something that I’ve been thinking more and more about. Central to the success of the nano watch kit was how the team crafted the story of the product and the way it connected with potential funders.
As fundraising becomes more of a “process” to be “optimized” by formulaic checklists and with commitments expected within days, not weeks or months, I think entrepreneurs are getting worse at telling their story. That’s the part of the nano watch press I missed. And, that’s what Perry brought to my attention.
So, I went back to see what they’d done to be so successful at raising the largest amount of funding for any project on Kickstarter to date. To my mind, they touched on all the points that makes for great story telling and ultimately, great fundraising:
Personal Story- they didn’t present their qualifications in a bulleted list of where they’d worked or what titles they’d held. They mentioned well known clients, but more to give context for why they could pull this project off than beat the potential funders over the head with them. They also told personal stories that created a connection to the project that had nothing to do with their professional pedigree. As a runner, they wanted a certain version of the watch kit for themselves. So, though this doesn’t bolster their professional credentials, it connects them in to the project a different way in our minds. And, really, that’s what the best fundraising stories do. Its a given that if I chose to invest in you I believe I can make money, but there are the intangibles around personality, perspectives and life experiences that will make a potential funder more likely to want to believe in you. These guys did a good job of that.
Product Story- one of the key things they did in telling their product story was to have a prototype in their hands throughout the video. This not only highlighted what the product is capable of, but assures potential funders that they can actually build what they say they are going to build. Additionally, they did a good job demoing the product in a way that shows its bigger potential. At first, it was just a watch kit, then it was a premium watch, then, as they highlighted ways the watch could be personalized with customized settings and accelerometers, it became high technology as a fashion accessory. Many investors will dismiss ideas as small, nice little features. They want to invest in things that can be BIG. The difference between a nano strapped to a wristband and a premium quality, highly designed, customizable piece of wearable technology is simply a matter of how you tell the story.
Rewards- the very first thing that kickstarter suggests to someone putting up a new project is to offer rewards to potential funders.
the best way to inspire support is to offer people great rewards. Everyone loves limited editions, one-of-a-kinds, and fun experiences (parties, screenings, balloon rides!). Spend some time brainstorming your rewards and people will respond. No one needs another coffee mug.
By our very nature investors are about making a financial return so telling a story about how you’re going to be the next Google is akin to offering up another coffee mug. So what other kinds of rewards could be attractive to investors? Giving them a front row seat to a leading company in an emerging and important market. Access to your personal network of cool kids and customers. An opportunity to add leverage to a business with their sector specific contacts. An outlet for some of their ideas for a product or category that they’re deeply passionate about. These non-financial rewards will be different for each investor and will require more listening than talking to tell a story around them that will resonate with your audience.
Progress Reports- the story of a company or project is always evolving. you don’t read a novel by skimming the overview on the dust jacket. Readers need to dig in and work their way through the chapters to see how the story unfolds. The nano watch project did a great job of keeping funders and potential funders up to date on their progress. They even went so far as to film themselves traveling to the factory in China where the kits were being made. The same is true of fundraising. Most VCs will take a meeting to read the dust jacket, very few will actually take time to read the whole novel. Send a brief email with a link to relevant or interesting coverage your company has received. Follow up on intros potential investors make and report back on those meetings. Get an update meeting scheduled that includes multiple members of the partnership. Remember, these are called “progress” reports for a reason. Focus them on how you’re making progress and how your story is continuing to unfold in a big and important way.
I believe we’re moving away from the WalMart-ification of everything. People want a connection to the story of the things in their lives. Investors aren’t excluded. Neither are potential consumers of your physical or digital products. I’m certain the companies that are able to tell their stories in big, compelling ways have an unfair competitive advantage as fundraisers and as scalable businesses.
Keep “process” and “optimization” part of your overall operation, but lead with your story and spend time figuring out how to tell it in more compelling ways.