An Interview With Kickstarter, Part 2 – AOTK209

Roy Morejon:

Welcome to Art of the Kickstart, your source for crowdfunding campaign success. I’m your host Roy Morejon, president of Enventys Partners, the top full service turnkey product development and crowdfunding marketing agency in the world. We have helped startups raise over 100 million dollars for our clients since 2010. Each week I’ll interview a crowdfunding success story, an inspirational entrepreneur or a business expert in order to help you take your startup to the next level with crowdfunding. Art of the Kickstart is honored to be sponsored by BackerKit and the Gadget Flow.

BackerKit makes software that crowdfunding project creators use to survey backers, organize data and manage orders for fulfillment by automating your operations and helping you print and ship faster.

The Gadget Flow is a product discovery platform that helps you discover, save and buy awesome products. It is the ultimate buyer’s guide for luxury gadgets and creative gifts. Now let’s get on with the show.

Welcome back to another edition of Art of the Kickstart. This week I’m back with Julio Terra. Director of Technology and Design at Kickstarter. He has many more great insights and tips to offer us so lets get on with the show.

Let’s talk about rewards now, we always get this question when we’re talking to creators in terms of how many rewards should a campaign creator offer. Whether that be initially when the campaign launches and at the end when all of their early birds or what have you are sold out. Any insights there?

Julio Terra:

Yeah, I mean I think our insights there is there isn’t a clear number that we can say, it’s X number of rewards is the right number of rewards. I think what we do recommend is one, for creators to be wary of doing too many choices, giving people too many different choices when that’s not warranted. What we find is that sometimes creators feel like it’s really important to provide a lot of different options in an unwarranted way and that can actually negatively confuse people. If there’s too many different options that they have to chose from, that can actually get in the way.

One of the things that we see, is sometimes with people wanting to do the early bird rewards, and early bird rewards can be a great strategy, is sometimes nowadays we see creators start doing multiple different tiers of early bird rewards, and they put all of those tiers up at the same time. So then all of a sudden, they’re offering a single product and they have tons of different, like eight different reward tiers offering just a single product in a quantity of one and a quantity of two, because they have three different early bird tiers.

To us, I mean, I think there’s a few things there. I think first I have not seen the data that says that it is really that beneficial to do multiple early bird tiers if you’re going with an early bird strategy. I think people have been kind of taking this to the nth degree. At first, they would only do one early bird, then they went to two, now I’ve seen creators do up to four. I haven’t seen any compelling reason to say that you should do up to four.

So I think be mindful of, if you’re using early birds, be very strategic about it. The recommendation we give to creators is, if you’re going to do that, try, do one. Combine that with a community engagement strategy where you’re trying to get the people who are already interested in your product, who you already know, get them excited to come to your project page early on the first day to take advantage of that.

I think that’s the one side of it rather than just putting an early bird out there without thinking about that activation aspect. The other is, if you’re going to do an early bird reward and you are going to offer your product on your project page for a lower amount you should make sure that once that early bird sells out it’s actually provided sufficient momentum to make sense for having offered it. Because we sometimes see creators offering an early bird but at such low quantities that even after all the early birds are sold out they’re only at 10% funded.

Then that early bird doesn’t have much of an impact in terms of driving momentum or getting people close to their goal. So we usually recommend that creators, if you’re going offer an early bird, make sure that your early birds will get you to at least 50% of your goal if they get sold out, if you’re able to really get traction with them.

The other thing that we’ll say on rewards, less talking about the number of rewards that’s ideal, more also for campaigns, for creators that are doing product focused campaigns in general we recommend, don’t worry about doing a t-shirt or doing … Focus on the product. If your base product costs $200, your campaign is going to succeed or fail based on you getting backers to support and pledge your project for that base reward, for $200.

That’s not to say, if you want to offer a $1 pledge for people to follow along, we actually think that’s a good idea because this is the only time in the world where people are going to pay you to be added to your email list. Most other times you’re paying to add people to your email list, so having a super low $1 or $2 stay up to date on how things are going, that is a way to invite people in a nice way. But to have the $25 t-shirt and then the $30 coffee mug, we don’t see those as much anymore but that’s something that I consistently … for creators who are doing product focused campaigns, really focus on your product and getting traction there because that’s really what’s going to make an impact, not the secondary rewards.

Roy Morejon:

Yeah, that was definitely one of the questions I wanted to follow up with you on. Do you see a difference in terms of backers preferring to see a percentage off in terms of an early bird, or a reward, or potentially dollars saved in reward copy? Do you see a difference there in say conversion rates?

Julio Terra:

I do not. I do not. To be honest we have not investigated that closely. That data’s not that easy to get at because it’s not captured in a structured format, so it’s harder for us to pull and do a thorough analysis of that. I don’t have clear guidance in terms of which of those approaches would be better.

Roy Morejon:

Got it. Do you have an average in terms of conversion rates for the categories that you work specifically in on the technology and design side?

Julio Terra:

Yeah absolutely. I think we’ve seen that, and again this conversion rate fluctuates, but we’ve seen for the most part over the last year fluctuate from about .9% to .7%, so a little bit under 1% is what we’ve seen the fluctuation be. Of course on a project level, I want to stress that can vary wildly. We’ve seen products that have conversion rates at 3%, 4%, all the way down to products with conversion rates at 0.1% or lower.

It depends a lot on the product, it depends a lot on … In general we see products that are more expensive have a lower conversion rate. That’s not say that that’s always the case but I think it’s because they are more considered a purchase so people often need to come back to the project page multiple times before they’re able to convert. It’s not such a compulsive purchase. Yeah, I just wanted to make it clear that those are averages, but …

Roy Morejon:

It varies wildly, right?

Julio Terra:

It varies wildly, yeah.

Roy Morejon:

What would be some of the most creative rewards that you’ve ever seen?

Julio Terra:

I will be honest, the most creative rewards that we see tend not to be product focused campaigns. They tend to be more in film, art and those areas, because then you get a lot of really interesting experiential rewards. One of my favorite rewards ever was from this artist filmmaker called Pes. He does these stop motion animations that are really amazing. The short film that he was funding was called Sub. It was about this funny animation, kind of bringing together the idea of sub as a sandwich and sub as a submarine. One of the rewards was that you would actually go with him to his favorite sub shop and have a sub with him. You have some really fun things like that.

In the product world, in general we don’t see as many fun things. We see in the world of edutech, like education toy like STEM toys, you see some nice rewards sometimes around education experiences or classroom experiences, things of that nature that are pretty awesome. In the graphic design projects occasionally you see some graphic design studios offering actually services. There was this project called Font Awesome 5, which is, Font Awesome is this really amazing icon toolkit that is made for web designers. They had all these reward tiers where you could add your company logo or just your own designed little mark to their official Font Awesome set, which I thought was pretty cool. Those are some of, I think, the ones that come to mind.

Roy Morejon:

I figured you might have gone down the path of potato salad with Mr. Zach Danger Brown, but food nonetheless. [crostalk 00:10:26] One of the questions … Yeah, I mean, one of the questions we always get is, what should a creator do if their funding has slowed down? Of course we typically see this after that initial launch and everybody’s really excited about it, and then it reaches the middle of the campaign and news can be slow, updates can be slow, backing can be slow. Any advice you could give to a creator if their funding has slowed down in the middle of their campaign?

Julio Terra:

Yeah, there’s a few things. I think the unfortunate thing is that unfortunately there is no silver bullet, there is no tried and true thing that you can do that will work across the board. The second, this is I think good news for people who are planning a project, not good news for people who are already running a project. I think the best thing that you can do is planning before you launch, is to actually brainstorm ideas and schedule press outreach and community events during your project. Like, create ideas that you tee-up to active while the project is live when you reach these lull moments. That’s where you can have the most impact, is by having these kind of tools you have ready to pull out.

But with all that said, a few things that you can do. First off, one of the things, a new tool that we’ve released, called Kickstarter Live, lets you do livestreams. We’ve seen more and more creators use that as a way to engage community. Because again, finding ways to keep your community engaged and keeping your project top of mind for them and keeping them excited about your project is the best way to get them to share about what you’re doing.

I think the way that I see most creators trying to get their community to share about their project is by writing short updates that don’t really tell their community anything new and interesting, and then just ask that community to share about the project. As you can imagine, maybe even a few members of their community might be willing to do that, but they’re not doing that because they all of a sudden have been reengaged and are excited again in the project, they’re doing that in a half-hearted way, based on the request of the creator.

What we see being most compelling is, and his again, it gets to why it’s important to plan early, is if you have really interesting bits of information that you can share with your backers along that journey, the Kickstarter Live becomes a way that you can connect with your backers in an engaging way. That is what will keep them excited and what might get them to share about it. Because the excitement is what’s going to drive people to share about your project.

The other thing that you can do is media outreach. Media outreach is something that can have an impact, and it’s something that takes a lot of effort. Again, both of these things, sending updates, reaching out to media, I think the feedback we always get from creators is like, “Oh, but I’m already so busy doing all these others things.” The fact is there is no super easy turnkey thing you can do at that point, which is again why if early on you had already done some of the pre-work and planning around media outreach, you already knew who are the journalists who you try to reach out to, who maybe showed some level of interest or who you know covers that type of work that you’re doing but haven’t written about you yet, this is a moment for you to try to reach out to them again with an update about your campaign. Doing it in a very respectful, and in a way that shows that you understand what that person cares about.

So, you have community outreach, media outreach to activate. That, and I think the other two things that you have, and this is one, like the Peak Design team, which is one of the most prolific creators on Kickstarter. One of the amazing things that they do is throughout their campaign they’re constantly engaging their community to continue to optimize their project page. The actual narrative on their project page, they continue to update it throughout the funding period. That’s definitely something that has worked for some creators, most creators don’t do that.

The last thing is if you are doing, if digital advertising is part of your strategy, sometimes we see creators being able to drive some additional pledges via that. Of course that’s paid media so some of these other things, they’re paid from the standpoint that somebody on your team has to do a lot of leg work, all these things require effort, but digital advertising is actual hard cash that you’re paying to buy that media. But if you know what your costs are, your cost structure is and you can afford, it’s definitely something that can be a valuable tool for you to use at that point.

Roy Morejon:

Indeed, so on the opposite side of the paid media, in terms of the owned media, what are your thoughts? Do you guys recommend doing cross promotions or cross collaborations with other project creators?

Julio Terra:

We do think that there’s a place for that. I think you don’t want to abuse that. I think this gets to the problem that I mentioned earlier about updates. I think one of the unfortunately things that we see creators, that happens sometimes, is updates from projects rather than becoming actually interesting information about that project become a request to share the project, followed by a bunch of cross promotion. The risk that you’re doing there is you’re ultimately turning your community off from looking at your updates.

If all they’re seeing is cross promotion and requests for the backers to take action but the backer is not getting anything out of that two way street, you’re ultimately burning a bridge with your backer. I think while cross promotion we think can be meaningful and we love to see creators collaborate, we do caution creators both in terms of protecting their own backers and not just trying to milk that audience that they have built into their project.

But also too, as they’re looking for creators for cross promotion, really look hard for creators that are doing things that maybe are targeted to a similar audience, or that there are clear similarities. Maybe there are two products that are very different but they both have a really similar design sensibility or something like that, or there are two cooking products that might do very different things. I think it can be a good tool but you want to be mindful of not abusing it.

Roy Morejon:

Absolutely. I’m in full agreement with that statement. Of course we have clients all the time that ask us, and I’m sure they ask you all the time even more, “How can we be a Project We Love Julio?” What’s your advice there?

Julio Terra:

Absolutely, that’s something that’s great. To us it shows that our features matter and we can see that on the backend, that they can have an impact. There’s a few things that I think creators can do. On one hand, starting, one of the statements that I briefly mentioned earlier, our team here, we really look at Kickstarter as a place to bring things to life. We’d like to celebrate the creative process. So if we see a project that is actually doing that in a real way, where they’re not just treating Kickstarter as a pre-order platform, but they are looking at Kickstarter as a platform where they are raising money and engaging a community in this creative process, that is something that our curation team often gets excited about. That’s the first thing.

I think the next thing, we do look for projects that are really well put together, that have a narrative that’s well structured, that has copy that’s well written and that has images and a design that’s well put together. That doesn’t mean, as I said before, it doesn’t mean that it has to be designed by a fancy designer, just use of fonts, the quality of the pictures and all those things, you can tell that somebody put some love and care into that.

That’s the next thing, having a high quality narrative and project page. The other thing, one of the other things of course, and this is the hardest maybe of them all, is that even if you have a project that does meet, that shares, that embraces this openness and sharing of their journey and their experience, and that does do a good job of creating a well written, well designed project page. If you’re creating a product where there’s a lot of competing products out there, there’s a point at which our curation team gets very picky in terms of … one example is watches. We have a huge community of watches on Kickstarter.

An interesting fact is that on most months watches is the most searched term on Kickstarter. Because we have so many watches on Kickstarter our curation team is very picky on what watches they will staff pick, because there are so many. I think it’s important to keep in mind, if you’re doing a product in an area where there’s a lot of competition, because our curation is ultimately trying to pick what do they think are the best projects from that community, so that level of competition will impact your project’s likelihood of getting staff picked. Because then your project, it’s not just that it has to look great, but it has to stand above all the other ones in that area.

Roy Morejon:

Absolutely. What would be your number one piece of advice for someone thinking of launching a Kickstarter project?

Julio Terra:

You know, the number one piece of advice is just do your homework and planning before you launch. Once the clock starts going, time goes very fast and you don’t have a lot of time. If you hadn’t planned and prepared things, as I was saying earlier, once things are going you’re answering questions, answering comments, you’re trying to get the word out. It’s like things move so fast that at that point it’s usually too late to stem the tide if things are not going well.

Preparation is really I think the most important thing. That preparation involves start by doing research and backing a few products if you haven’t already, then really create a plan and start planning months and months before you launch. Don’t wait until the last minute, that really can make or break your chances of success. I’ll stop there because I could say much more but I think that’s the …

Roy Morejon:

No, super solid advice. A wise member on my team said, “Fortune favors the prepared,” and it’s certainly the case especially with crowdfunding nowadays.

Julio Terra:

You know, on the presentation that I have there’s one quote that is like, “By failing to prepare you’re preparing to fail.” I think that’s [crosstalk 00:22:22] think about it.

Roy Morejon:

Alright Julio, this gets us into our launch round, where I’m going to rapid fire some questions at you. You can give me as short or as long an answer as you want. You good to go?

Julio Terra:

Let’s do it.

Roy Morejon:

What inspired you to work with entrepreneurs?

Julio Terra:

I’ve actually always been a huge fan of design, and I think design and technology … I went to grad school with one of the founders of the Arduino project, so then I got really into this boundary of where product design meets technology. That, this world of exploring this world of connected devices was something that I was really, really interested in and excited about. Doing more on the prototyping side, less than entrepreneurial side, before coming to Kickstarter.

Then when the opportunity arose for me to come to Kickstarter it was a no-brainer. Definitely I love entrepreneurship but for me creativity and design using technology in creative ways, those are the things that really inspire. I find entrepreneurship is a really interesting way how it slots into all of that, but I think that’s my first passion beyond entrepreneurship.

Roy Morejon:

If you could have a glass of wine with any entrepreneur throughout history who would it be?

Julio Terra:

That’s a really hard one. Any entrepreneur throughout history? I would probably have to pick a very standard one, or more of an inventor than entrepreneur, Tesla. Elon Musk is probably not far behind but those are probably the two that I would think about first.

Roy Morejon:

What would have been your first question for Mr Tesla?

Julio Terra:

Man, that’s a really … I would want to talk about his work practices. I’m really into the practice of how things get done. As an inventor, how do you go about creating the space in your life for inventing? Is it a very process heavy thing or is this something, more an inspiration driven thing? That’s really where I would start the conversation.

Roy Morejon:

What’s your favorite Kickstarter project of all time?

Julio Terra:

You know, right now, this shifts a little bit, right now I’m really into a project called MOON. It’s a project that was funded early last year and they just delivered the rewards earlier this year, by a French creator. His name is Oscar. It’s the most accurate lunar reproduction ever made. This creator actually, he got all these photos from NASA, these super hi-res photos of the face of the moon, and spent, these were two dimensional flat photos and spent months and months mapping those onto a sphere to create this model. Then, from this 3D model that he created, he’s gone on to develop this beautiful product. I’ll let your listeners look it up, just search for MOON and Oscar and you’ll find it.

Roy Morejon:

Nice. What book, whether it be business or life book would you recommend to our audience of inventors and entrepreneurs?

Julio Terra:

Let me think about that for a second. Business or life books. There’s so many good stuff. Again, I really like a lot of design books, books that look at that design process and whatnot. There’s this book called Designing Interactions if I recall correctly, which has interviews, short interviews with all these luminaries of interaction design and all these people from the early days of ideal, like Bill Moggridge an Allen Kay. Really inspirational people who I think design a lot of the technologies that now we take for granted and now are the foundation for a lot of the computers and phones and whatnot that we use on a day to day basis. That’s one where it gives you a lot, these little glimpses into how all these different great designers think, great modern designers.

Roy Morejon:

When do you think Kickstarter will hit $5 billion pledged to projects?

Julio Terra:

I would say maybe in about, I hope in about a year, a year, a year and half tops. That’s my prediction.

Roy Morejon:

You’re currently at about 13.5 million backers to the platform, when do you think Kickstarter will hit 100 million backers.

Julio Terra:

That’s going to take a little bit longer. We’re not in growth path or even trajectory or desire to be in a Facebook type way. So I think that’s going to take at least five years. We’re trying to work on some things to speed that up, especially as we’re rolling out internationally a little bit more. I think five years is a very ambitious projection for that. I think that’s more of a wish than an actual prediction, more of a mission or goal than an actual prediction.

Roy Morejon:

We’re doing our best to drive more and more new backers to the site every day.

Julio Terra:

We appreciate it.

Roy Morejon:

Alright, I’m going to put you on your toes here. Who do you think’s going to be the next CEO of Kickstarter?

Julio Terra:

No, that one I’m going to have to pass.

Roy Morejon:

Are you going to be the next CEO of Kickstarter? Was that something that would interest you?

Julio Terra:

You know, the answer to that question is I will not be the next CEO of Kickstarter. Is that something that would interest me? You know I think right now, right now no. In the future, I think that is something that I could be interested in. But right now I think I’m not the right person for that role at the moment.

Roy Morejon:

Fair enough. Alright, last question in the launch round and I’ll let you off. What does the future of crowdfunding look like?

Julio Terra:

That’s a really interesting one. I think the future of crowdfunding is actually expending beyond crowdfunding. I think in many ways we’re seeing different countries [inaudible 00:29:04] crowdfunding in different ways, where in some places it’s moving to almost a presale type of a place, which that’s fine. I think for us the question that’s really more intereresting in some ways in not just what’s the future of crowdfunding, but what’s the future of helping creators bring people to light, bring projects to life? Because crowdfunding helps creator in a very specific point in their trajectory.

In many ways I think crowdfunding is maturing in a really nice way. I think it’s going to continue to mature, it’s going to continue to have a stronger ecosystem built around it to help creators to raise more money and to prepare better and things like that. I think as I’m thinking for the design and tech category, and for the role that Kickstarter will play in this category, I like to think of what can we do beyond just this period of time in helping creators raise money in this small sliver?

A lot of what I like to think about from that perspective is around community and how can we find additional ways? Because Kickstarter is known a lot for money and people think about it a lot for money, but one of the things that we’re most passionate about is bringing communities together, the creators together with backers. As we think about how we could have more of an impact in the long term success of creators, is a lot about thinking how can we help creators engage with a community in a longer term way. Whether that’s before what is now seen as the moment for creators to crowdfund, or after what’s seen now as the moment to crowdfund.

I didn’t really answer your question but to share a little bit of our perspective. That when we look at ourselves we don’t think of ourselves as a crowdfunding company, we think of ourselves as a company that help creators bring things to life. We’re actually wanting more and more, we don’t have anything yet out there but a lot of the thinking that we’re doing is how we can help creators beyond this place where we’ve become very established.

Roy Morejon:

Absolutely. Julio, this has been awesome. I know our audience is going to love this. As always, please give our audience your pitch. Tell them what you’re all about, where people should go and why they should go launch a project on Kickstarter.

Julio Terra:

Great. Thanks Roy. Yeah. Kickstarter is an amazing way to transform your idea, your prototype into a company, to build a community around what you’re doing, to raise money to really bring that to life. I think we’ve spent since we started in 2009, I think one of our overriding focuses has been to create a community that is passionate about supporting people bringing things to life. I think that’s one of the core things that I think differentiates Kickstarter from other avenues that startups and creators have to bring products to life. This is something we’re going to continue to do and continue to take this to the next level.

For anyone who’s interested in learning more about Kickstarter the first step is going on our site, checking out projects and backing projects. We have a lot of great resources there as well for people who are thinking of launching a project. The last tip I’ll give for people who are on the fence of launching a project, it’s always great, try, launch something small. Dip your feet in, launch something that’s … You’ll learn tons and from there you can get more ambitious with your ideas and get more ambitious with your projects, get more ambitious with the way you engage community, the way you bring community into your process.

Our goal is again to continue to help people make things. We think that helping people making things, whether it’s movies, products and whatnot, those are some of the things that make life worth living. Those are a lot of the things that make life special. We’re going to continue to be here to champion the work of creators from across all these disciplines. We hope to see a lot of your audience members, people who are listening here today, we hope to see a lot of you on Kickstarter, but not just backing projects, but even more importantly making stuff.

Roy Morejon:

Absolutely. Julio, this has been phenomenal. Audience, thank you again for tuning in. I know you enjoyed it as much as I did. Make sure to visit artofthekickstart.com for all the show notes, a full transcript, links to everything we talked about today. Of course thank you to our crowdfunding podcast sponsors, the Gadget Flow and BackerKit. Julio, thank you again for joining us on Art of the Kickstart.

Julio Terra:

My pleasure Roy, thank you very much.

Roy Morejon:

Thanks for tuning into another episode of Art of the Kickstart, the show about building a business, world and life with crowdfunding. If you’ve enjoyed today’s episode, awesome. Make sure to visit artofthekickstart.com and tell us all about it. There you’ll find additional information about past episodes, our Kickstarter guide to crushing it. Of course if you love this episode a lot, leave us a review at artofthekickstart.com/itunes, it helps more inventors, entrepreneurs and startups find this show and it helps us get better guests to help you build a better business. If you need more hands-on crowdfunding strategy advice, please feel free to request a quote on enventyspartners.com. Thanks again for tuning in. We’ll see you again next week.