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In the past, money was a huge barrier for musicians, and one of the main reasons many were forced to tie themselves to a record label. Today, many musicians are finding their own ways to creatively fund their albums and tours, with the most popular option being crowdfunding. Crowdfunding is a huge undertaking, but, if done correctly, you can come out of it with a whole lot more than just money. It also presents dedicated and creative artists a chance to connect with their fans in a whole new way.

Learn how to run a successful crowdfunding campaign with these 5 tips:

1. It takes a crowd.  

I think a lot of people mistake crowdfunding for an endless well of money, but, the sky is not the limit. The amount of money you can raise is entirely dependant on the size of your fan base – your crowd. Generally, the more fans you have the more money you will be able to raise, although there are other variables like fan dedication and income level. Amanda Palmer was able to raise upwards of a million because she has a huge, dedicated fanbase with spare cash to throw around. Pretty much the perfect scenario.

There’s no way to tell exactly how dedicated your fans are and how much money they would be willing to donate, but you can look at some figures to get a better idea. Look at how many people you have on your email list, how many people come to your shows, and how many people you have following you on social media. Don’t assume that every one of your fans will donate – even the most amazing musician in the world couldn’t accomplish that.

Think about how much your average fan would be willing to spend to help your cause. If your fanbase is generally high schoolers or college kids, they may not have as much spare cash as working adults in their 30’s. Think about what your super fans may be willing to spend. If you offer any higher-end products on your website – like VIP passes – look at how many of those typically sell to gage the amount of dedicated fans you have. Use all of this to set a reasonable goal. Setting a goal too high and not meeting it is a depressing thing no one wants to face. Not to mention it definitely has a negative effect on your brand.

2. Choose the right platform.

There are tons of crowdfunding platforms out there, each with it’s own unique features and benefits. Don’t just use Kickstarter because it worked for Amanda Palmer. Have a reason for your platform choice.

Pledge Music is a music-specific crowdfunding and fan engagement platform with options to set up a crowdfunding or pre-order campaign. They have connections with music companies that can help you with things like manufacturing, marketing, and distribution and may be the best choice overall for music projects. Kickstarter has a huge profile, with hundreds of thousands visiting the site each day. On the downside, you only get the money if you meet your goal and you could get lost in the crowd. Depending on what kind of campaign you set up, Indiegogo can allow you to keep the money you raise even if your goal isn’t met. However, Indiegogo takes a higher fee from these kinds of projects.

3. Make a budget.

Your budget isn’t just what you want to fund. If you ask for exactly what you need to fund your recording or tour, you’ll find yourself in debt. Each platform takes a percentage fee from successful projects.

Taxes are another issue. Technically, the money you raise from crowdfunding is income and needs to be reported. This probably won’t be hugely significant for smaller projects, but all these costs can add up and you should take it into account.

On top of that, rewards cost money as well. People are paying for that t-shirt or vinyl, but you still need to make it (and ship it to them). Figure out exactly what each reward will cost you and how much they will cost to ship. If you have international fans, look into international shipping costs. The worst situation you could be in is not being able to get the rewards to your fans who took the time and money to help you out.

4. Think about your rewards.

On top of just budgeting, you need to think about your rewards creatively. Make your rewards relevant to your project and your fans. Teenage girls may love magnets made from secret, Instagram photos of the recording process. A slightly older fan base may really appreciate vinyls and even some higher-end custom vinyls with artwork. Think about the project itself. Having a signed electric guitar as a rewards for an acoustic album doesn’t make much sense. Get creative with it.

Make sure you have rewards that take different levels of fans into account so as not to alienate anyone. Digital downloads, physical CDs, posters, magnets, and other little things like that are great lower end options. These are great for your more casual fans who may not be willing to or have the means to donate very much. Mid-priced rewards like vinyls, a t-shirt, or personal things like signed copies or special notes are great for your more serious fans and those that crave personal interaction. Have a few higher-end options. A private house concert or VIP pass is a great way to get your super fans involved.

Keeping all that in mind, make sure you don’t over-invest yourself in the reward process. You need to make sure you have the time to create the rewards. Handwritten lyrics may seem like a good idea, but keep in mind that you could be writing hundreds.

5. Continuous content.

Crowdfunding isn’t just a beginning and an end. Mass pushes at the beginning and end of the campaign won’t get you very far. You’ll be left with an unmet goal and a bunch of annoyed fans who had to block your hourly updates from their social media news feeds.

Statistically, most pledges to crowdfunding campaigns come in at the beginning and end. People are motivated by new content and a deadline. You can use this to your advantage to drive more pledges in the middle of your campaign. Release a new, special reward halfway through your campaign. Keep in mind that the entire process is an opportunity to engage your fans in a new way. Release update videos showing your fans the progress of the album they are helping you make. Release short teasers or rough drafts of songs. Ask your fans’ opinions on your lyrical work-in-progress. Try to make the content exciting and engaging. You want to keep awareness for your campaign up but you don’t want it to feel pitchy.

Crowdfunding is a huge undertaking. If you’re looking to start your first crowdfunding campaign or want your second one to be more successful, check out the New Artist Model online music business school.

Dave Kusek

The New Artist Model in an online music business school for independent musicians, performers, recording artists, producers, managers and songwriters. Our classes teach essential music business and marketing skills that will take you from creativity to commerce while maximizing your chances for success.

Crowdfunding is one of those things that you cannot fully understand until you do it yourself. You can read up on crowdfunding books and still encounter something completely unexpected during your campaign. This is why it’s so important to pick the brains of successful crowdfunders when you get the chance. If you don’t know someone with a crowdfunding campaign under their belt, search the internet for the next best thing. There are a lot of people blogging about their crowdfunding experience these days. Find some people who funded similar projects to the one you plan on starting and learn from their mistakes and triumphs.

Jody Quine is a vocalist and songwriter who recently completed a Pledge Music campaign for her solo EP,“Seven.” In the past, she has been a part of some very successful projects, but never had the funds available to do anything solo. She launched her Pledge Music campaign in November, 2012. She wrote this post for Crowdfunding For Musicians.

1. Timeline

All eager to succeed and get my music out there I figured I’d raise the money in less than a month, record immediately and have a finished product mixed, mastered and manufactured in no time.

My campaign went LIVE in November 16th, 2012 and the last of my exclusives/CDs were put into the mail on October 29th 2013.

Keep in mind that when all goes well it’s possible to get your record finished and delivered in no time but things pop up from producers having other better paying projects running long to computer issues when designing your cover. Give yourself time to honestly deliver your product to your fans. They’ll appreciate your honesty and awareness. Also make sure to keep them up on what’s happening and they’ll be pretty forgiving.

2. Underestimating cost and setting the right ‘Posted Goal’ amount

As much money that you might be able to raise keep in mind that you could always use more. With Pledge you don’t get your money until you hit your posted goal amount so keeping it lower to ensure you will get funding is great but then once you hit your 100% people think you’ve raised all the money you need to record and pledges can slow down immeasurably. Remember that one song really could prosper with the use of real strings or that you might have to retrack the piano when you get home from LA and pay an extra $500 for that day in the studio.

It’s a fine balance between how much you think your fans will kick in and being realistic with how much you’ll need to accomplish what you’re setting out to do. Between those 2 numbers you’ll find the right ‘Posted Goal’ so you’re able to get your funding as well as afford the record you want to make.

3. Charity

PledgeMusic is a great service and wonderful opportunity in the new music industry model, however they don’t work for free. They take 15% of all the money you raise. Beyond that you can also agree to give a % of your pledges to a charity of your choice. I agreed to give 10% after I’ve reached my posted goal to a charity. As my ‘Posted Goal’ was too low to actually record a full album now I also had to earn an extra 25% to meet my expenses.

I had a friend who pointed out to me ‘Why are you giving it to charity when you’re already the charity’. I had to laugh because he’s right. It’s great to give back for sure but perhaps keeping it to a lower amount or making yourself available to play shows for or at your charity makes more sense. So do give back but again remember your costs of recording, mixing, mastering, designing, manufacturing, and SHIPPING, sometimes to fans who live on the other side of the world, adds up and as wonderful as it is to give to a charity if you can’t complete your project and deliver it to your fans you’re shooting yourself in the foot to really be in a position to give.

4. Exclusives

What is it you really have in you to make for your fans? I offered handwritten thank you notes and lyric sheets as 2 different exclusives. I love that idea! But as the day came to start fulfilling those pledges I was completely reminded of how I fractured my hand at the age of 11 and now decades later all the writing I do is barely legible and only for creative purposes. Anytime I have to write for more than 10 minutes in a way that people can read what I’m writing my hand cramps and the pain sets in. Next time I will keep this in mind and offer only a set amount of them for a larger pledge amount making them more of an exclusive exclusive and offer other items I am more able to create without pain. Lol.

Also I’m more aware now of what it is that I can offer that is exclusive to who I am as an artist as well as a person that my fans might enjoy. Be aware of what you really want to be making for them so you can do it joyfully and in good time.

5. Fun

Have fun!

This is not an exercise in stress or disappointment! You’ve got to be open to go with the flow and trust the unfolding of your record.

There will be challenges and hold ups but all in all your fans are there for you and helping you do what you love to do! So be grateful and enjoy the process because if you’re lucky you’ll get to do it over and over again.

KICK ASS!!
jody

What have you learned from your crowdfunding campaign?

Here is a fantastic compilation of posts and articles from 2012 about managing startups from  Professor at Harvard Business School who studies lean startups, entrepreneurship, platforms, and network effects (Twitter: @teisenmann).  This is so much information and wisdom here for anyone starting a new venture or trying to make their startup successful.

As Tom says “The generosity of the startup community is amazing, and these insights are invaluable to those of us who teach and coach aspiring entrepreneurs.”  Dig in, there is a lot to digest:

Lean Startup

Business Models
Customer Discovery and Validation

Marketing: Demand Generation and Optimization

Sales and Sales Management
Viral Marketing
PR Strategy

Branding/Naming a Startup

Product Management/Product Design

Business Development

  • John O’Farrell of a16z describes how quality trumps quantity and clarity regarding mutual objectives is crucial in doing business development deals, using Opsware’s transformative distribution agreement with Cisco as a case study.
Scaling

Funding Strategy

Founding Process
  • My colleague Noam Wasserman published his book, The Founder’s Dilemmas, that describes tradeoffs that founders confront when deciding when/with whom to found, how to split equity, how to divide roles, etc.
  • Blake Masters’ summary of Peter Thiel’s Stanford CS183 lecture on the importance on early founding decisions.
  • Charlie O’Donnell of Brooklyn Bridge Ventures on questions that co-founders must address ASAP and the concept of the “minimum viable team,” i.e., the smallest set of skills needed to get traction in an early-stage startup.
Company Culture, Organizational Structure, Recruiting and Other HR Issues
Board Management

Startup Failure

Exiting By Selling Your Company

The Startup Mindset and Coping with Startup Pressures

Management Advice, Not Elsewhere Classified
Career Advice (Especially for MBAs)

Startup Hubs

  • Brad Feld of Foundry Group and TechStars has published the book Startup Communities, a guide to building an entrepreneurial ecosystem.

Tools for Entrepreneurs

  • Beyond Steve Blank’s Startup Owner’s Manual, a book he co-authored with Bob Dorf, here is a list of the fantastic resources Steve has made available to the startup community — mostly for free.
 Original post is here.  Thank’s for compiling and sharing this Tom.