Crowdfunding Statistics Tell a Scary Tale; 65% of Crowdfunding Campaigns Fail. But that’s not the whole story.
Crowdfunding statistics can’t be taken at face value. While it’s true that numbers don’t lie, crowdfunding statistics don’t provide the whole picture.
That’s because the human element can’t be measured with mathematical precision. Let’s look at Kickstarter statistics for example. A quick glance at the summaries gives you the instant fact that the Kickstarter success rate is exactly 35.79% as of 3:00 PM PST on November 25th, 2016.
But do those statistics tell you why? Not at all. There’s no attempt whatsoever.
Kickstarter has to be applauded for its transparency and honesty. However, crowdfunders need a better grasp on WHY crowdfunding campaigns succeed. And HOW. And by WHAT means.
Here’s an example of a Kickstarter that launched 72 hours ago and is doing everything right:
They’re $9,000 over their funding goal in just three days. And there’s no end in sight. For them, the sky is the limit when it comes to crowdfunding success and crowdfunding statistics are going to enjoy an uptick.
Here’s a crowdfunding campaign that damaged overall crowdfunding statistics:
The screen shot is not cut off. You are looking at the entire crowdfunding campaign from top to bottom. Nobody should be surprised to see he didn’t raise even one dollar.
(Related note: this crowdfunder wanted to purchase one of our crowdfunding promotion packages and we refused to sell him any of our services. We couldn’t take his money because we knew immediately he had absolutely no chance of success.)
Now we come to the core of the problem; not nearly enough people take crowdfunding seriously.
Some people see a crowdfunding campaign as a lottery ticket (read our previous post on that topic here) while others think they’re being funny and crowdfunding isn’t to be taken seriously (the best example of that ever is here). Whether people sincerely believe they can throw up a one paragraph project, click [launch] and really believe they’re going to get any money OR if they just want to fire off a project for shits and giggles, this seriously has to stop. And now.
Other crowdfunding experts agree with me. Recent discussions on LinkedIn Groups are echoing this sentiment. I’ve been giving this speech from my soapbox for years.
Kickstarter has a very good quality-control process to insure only proper campaigns launch. That’s excellent! You’ll never find a “I need toilet paper” project on Kickstarter! Beyond that, the crowdfunder is more-or-less on their own to figure things out for themselves as they go along.
Indiegogo doesn’t vet crowdfunding campaigns at all and that’s not necessarily a bad thing. Lots of worthy campaigns that would never see the light of day on Kickstarter end up doing very well on Indiegogo, often raising truckloads of money far, far beyond the published crowdfunding goal. AND Indiegogo has an impressive set of resources for crowdfunders including this nifty article on crowdfunding statistics with some helpful tips.
Looking beyond my examples of the surreal and sublime in crowdfunding and not wishing to throw too many people under the bus, there are lots of crowdfunders who launch a quality campaign in earnest and with sincerity. They put together a good video, publish some excellent pictures, write up a compelling story and have crowdfunding perks that are priced right. But those campaigns still fail. Some of them failing in horrific, sometimes humiliating ways.
Why? They did everything right except putting any thought into promoting a crowdfunding campaign.
Day in and day out people WISH they could hire us and take advantage of our game-changing crowdfunding public relations services but they can’t. Others think that promoting a crowdfunding campaign is abhorrent. The plethora of reasons against crowdfunding promotion are as fascinating as they are depressing….
- “I have absolutely no money for crowdfunding promotion. Why do you think I’m crowdfunding? I’m broke!” [ Wrong answer. He’s got the lottery ticket mentality.]
- “I can do crowdfunding PR on my own. Why should I pay you to do it?” [ Wrong answer. People who try the DIY approach to crowdfunding promotion end up like shocked homeowners. ]
- “Pay for crowdfunding marketing? I won’t risk any money. Tell you what, promote my crowdfunding campaign without any money up front and I’ll give you a commission. [ Wrong answer. If you can’t or won’t take a risk then being an entrepreneur is not in your DNA. You should play it safe and work at a job for the rest of your life. Don’t even think about opening a retirement account like an IRA or getting involved in your company’s 401K program. Retirement accounts involve the stock market and the stock market is risky, dontcha know?]
- “I wish I could pay for crowdfunding public relations but I didn’t budget for that and I just can’t afford it, even though I know I need it. [ Sad answer. This crowdfunder has wisdom and insight but due to poor planning lacks the resources to execute on achieving crowdfunding success.]
If you’ve been following along with this blog for any period of time you can read my mind and guess the words I’m about to type before I type them:”Crowdfunding promotion is THE #1 KEY to crowdfunding success.”
You can get everything else wrong or half-right or half-cocked but if you’re promoting a crowdfunding project properly your chances of reaching crowdfunding success are high. Very high. Crowdfunding statistics would see an overnight explosion into positive territory if crowdfunders took crowdfunding promotion far, far more seriously.
Going beyond crowdfunding advertising, there are many other elements to achieving crowdfunding success and it’s critical that crowdfunders get up to speed, get on the bus and get with the crowdfunding success program. When that happens, crowdfunding statistics will go from gloomy to glorious.
So what’s the answer to improving prevailing crowdfunding statistics? Education. Education. Education.
Stick with this blog. Sign up for our newsletter. Listen to our podcasts. Study successful crowdfunding campaigns. Deconstruct them. Analyze them. Figure out what they did. Then do what they did.
Oh and make sure you hire us for crowdfunding promotion. That’s what many of the most successful crowdfunding campaigns did.