Crowdfunding

What Pitches Succeed?

Ethan Mollick, Associate Professor of Management

What Pitches Succeed?

• Elements of a successful pitch

• When to hire help
The Crowd is Very Rational

Signals of quality: Problems:

Endorsements Spelling errors

Team with experience Lack of videos

Prototypes
Detailed plans
Frequent updates
Phrases and Success

• From “Plead or Pitch? The Role of Language in Kickstarter Project Success” by

Nihit Desai, Raghav Gupta, Karen Truong of Stanford University
Phrases and Success

• From “Plead or Pitch? The Role of Language in Kickstarter Project Success” by

Nihit Desai, Raghav Gupta, Karen Truong of Stanford University
Using Videos

• Advice:
• Be genuine
• Have fun (if appropriate)
• Good quality that includes music and lighting
• Be descriptive
• Keep it short (between 30 seconds and 5 minutes)
• Include testimonials
“ Be yourself. If there's anything phony about your
pitch, your vision, or you, it will fail. Being genuine
is the key to success in everything you do.”
“ Kickstarter is not itself a promotional tool -
make potential customers aware and direct them
to your campaign.”
Promotion

• People do lots of paid promotions

• Paid advertising: 25%
• Press release: 46%
• Held an event: 25%
• Promoted on social media: Everyone
• Value is not immediately clear in the stats, but most recommend strongly
Recap

• Pitch quality matters a lot

• Spend time on a video
• Hire help if you need it, but don’t expect magic
Crowdfunding
Dealing with Backers and Delivering Results

Ethan Mollick, Associate Professor of Management

Dealing with Backers and Delivering Results

• Biggest challenges
• Why delays happen
• How to avoid delays
• How to deal with delays
Big Challenges

Challenges ranked highest by survey takers

1. Marketing and promoting project
2. Manufacturing and production
3. Delivery and fulfillment of rewards
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Avoiding Problems

• Plan more in advance

• Build in slack
• Common pitfalls for delays:
• Time for problems with proofs/prototypes
• Finding suppliers
• “Real jobs”
• Life issues and family
• Key person falls through
• Chinese New Year(!!)
• Common pitfalls for failures:
• More serious versions of above (death and sickness)
• Robbery, bad suppliers
If It is Going Badly

• Give updates!
• Communicate frequently, backers can help
• Honesty is rewarded later
• Don’t fall prey to sunk cost fallacy. Your backers will thank you:
• 13% report receiving a refund or other compensation
• 17% agree or strongly agree that they understood why the project failed
Recap

• Issues can occur beyond your control

• Do research
• Build slack where possible
• Communication with backers is critical