A little over a year ago a friend of mine was telling me about his start up. Having been in online advertising for about 10 years, I am always interested in new products and marketplaces, so, like usual I listened and asked questions about it. I have a lot of people trying to tell me about or pitch me on selling their product or service or site, and unfortunately, I typically have to politely let them down. However, this product was intriguing. My friend was telling me how it helps you find lost or misplaced things using bluetooth and GPS. The product is called Tile. He told me their intentions of crowd funding to raise $20,000 as well as interest for the product. It sounded cool, but I didn’t think too much else past that.

About a week later, he called me telling me that they were buying ads and the crowd funding pre-orders were coming in well. He explained how they needed help because they set up these ads and they were making money and they needed to scale, but they had no clue how to do it.

Anyone that buys ads online all day like me knows that when a new product goes “out of the gate” at a positive ROI (spending money and actually creating a net profit return), its extremely rare. I don’t know the actual statistics, but maybe 1/20 or 1/100. The point is, it almost never happens.

So, I helped them buy on the top ad platforms, tweak some things on their sales and order page, improve the ads, and target and test new demographics amongst other things. As you can see in this image below, we hit 11000%+ of the original goal with 22 hours left. Even after the initial push, we sold even more pre-orders!

Soon after, I got inquiries from all kinds of companies trying to clone the results. I also had some big well known companies that I won’t mention, cloning my exact ad copy text and just putting their product name, price points, etc in there instead of Tile’s. Everyone was blown away by the success because everyone was so used to needing their crowd funding campaigns to go viral, and we sidestepped all of that by buying ads on a large scale.

So, how did it work? Let me lay out a few key points as to why this worked so well.

1.) The Product

It always starts with the product. They actually had a prototype that worked. After my success with Tile, I had a lot of start ups that didn’t even have a working prototype of the product. What if all of this money had been raised and the Tile team had never actually figured out how to make the product work. All of our reputations would have suffered. The product also has to be useful, but more importantly, this leads me to point #2….

2.) The Marketplace

If no one wants your product, or the marketplace is very small, you can’t expect to raise much money crowd funding, and potentially, the company may never be much of a success. I talked to a lot of companies out in Silicon Valley, and my experience with companies in the “Tech Bubble” is that sometimes they make companies that no one cares about outside of Silicon Valley. This leads as well to the next point….

3.) The Competition

Are you the 73rd iPhone accessory with some slight slight twist on another product, or maybe nothing is much different at all? Are you the 100th FitBit-ish product (its unbelievable how many FitBit clones I was getting inquiries about)? The good thing about Tile was that they had some attributes that potential competitors did not have. Is your product differentiated from the competition? So, next is…

4.) The Sales

If you’ve passed the test of the first 3 points, its now time to sell. It is important to have a clear sales process on your site. By this I mean:

    •   You have a video or good explanation of the product
    •   Any press that you’ve had is on the site
    •   The check out process is simple and easy to navigate
    •   You have a good payment processing solution
    •   You’re creating a fan base with social media (for example, people can share on their Facebook that they just helped fund your amazing product)

Then, after you’ve done this and you’re buying ads…

5.) Measure Your Analytics

Whenever you’re marketing or selling anything, you always have to look at your analytics.
    •   How many visitors came to the site and purchased (conversion rate)?
    •   What sources did they come from? Facebook? Another ad platform?
    •   Were they paid visitors or “organic?”
    •   What is the page load time on all devices? People will leave if they are on a mobile phone connection and the site loads too slow.
    •   What demographics are working the best?
    •   How much did I spend and how much revenue did I generate? It sounds obvious, but some crowd funding start ups wanted to just spend money to generate the “story” of a lot of sales. I personally would never recommend running ads at a loss except during the initial testing phase.

Now, let’s take something into account. Not every product will be for such a broad marketplace and maybe your crowd funding project is not going to raise millions. That is fine. You still have to take these variables into account. Also, you can start with the “most likely to be interested and purchase” marketplace. At first that is going to be people that have crowd funded other projects, or follow Kickstarter and other crowd funding platforms. The second most likely will take some research, but hopefully, you did that already in accordance with point #2 and know that a market for your product exists.

The point here isn’t that everyone can crowd fund to the tune of 11000%. The point that I do want to make is that by doing something that I had been doing for almost 10 years—buying ads online— in other industries, I was able to apply that to the crowd funding model and get good results. This matters because, unlike viral campaigns, when you are buying ads and paying for every visit, you really learn a lot about the process and gather a lot of data. So, use these concepts to apply to your campaign or crowd funding idea.

What do you think? Leave a comment and let me know.