Budget – Balancing Fixed and Variable Costs

I’m currently putting my rewards in place, and it got me thinking about how my crowdfunding campaign budget is structured around balancing my fixed and variable costs. I thought I should share how I did it!

If you don’t know, I’m about to run a crowdfunding campaign to make it possible to self-publish my second and third books. The books are for teaching kids the names for their feelings through stories (www.JackFeelsBig.NZ).

Before I get to the variable and fixed costs (which help me determine how big my campaign needs to be to work) I should mention upfront costs. These are things you have to pay before your campaign. You’ll be paying them whether it succeeds or not. My philosophy on these costs is that they are an investment that you need to be willing to bear. I’m hoping to gain these back through profits in ongoing sales of my books. For some campaigns, it may be that you just don’t plan to recover these costs. More on that later. Here’s my example:

  • Demo illustrations ($300)
  • Advertising costs for crowdbuilding ($30)
  • Hours and blood and sweat and tears
    • Total Upfront Costs ($330)

One other thing before I plunge into this calculation: it’s iterative. My initial plan for my first campaign was 3 books with 6 stories each. When I got to the end of my first run through this calculation process I reckoned I would need to raise $20,000. That was more than I could reasonably expect to raise, so I reduced my fixed costs by making my first campaign for one book only (illustrations costs divided by three) and reduced my variable costs by making the book contain 5 stories instead of 6. This gave me a $5,000 goal and a much better shot at making it. But onto the Variable / Fixed costs balancing act!

Variable costs, in this context, are what it costs for each unit of your main reward.My main reward is a copy of the book for pledging $25 (a very popular reward point, worth putting special thought into, as I explain here). A ball park estimate for each of my costs:

  • Postage ($2.50)
  • Crowdfunding platform fee ($1.25 – 5%)
  • Credit card processing fees ($0.75 – 3%)
  • Printing ($5.5*)
    • Total Variable Costs $10
    • Available for Fixed Costs $15 (aka gross profit)

Book Reward Cost Breakdown

Fixed costs are those that you’re going to have to pay for once, regardless of how many of your rewards you send out. I don’t have my actual estimates handy, but off the top of my head:

  • Illustrations ($6,500)
  • Editing Services ($1,500)
    • Total Fixed Costs $8,000

So, I need to sell enough books that the $15 of gross profit covers my $8,000 of fixed costs.

Campaign Goal = Total Fixed Costs x (Main Reward Price/Gross Profit)

According to this calculation, I’ll need to raise $13,333 by pre-selling 534 books. That will perfectly balance my fixed costs and variable costs.

If I set my goal higher than this, I will be able to take net profit at the end of the campaign, but only if it is successful (if adding this fat into the goal means I miss it, I’ll still have to wear any upfront costs). I would discourage padding the goal. There’s more value in succeeding than just the cash.

If I set my goal lower than this, I will end up with less money than I need to deliver. This is a bit irresponsible, even if I think I’ll be able to cover the shortfall. It would be better to adjust the project to bring make it more achievable.

One last note on this calculation. Its got a lot of assumptions and should only be seen as a guide (my campaign goal will definitely not be $13,333). There’s always risk of things costing more than expected. In my first campaign I accepted some scope creep and added some extra pages. This meant more illustrations and higher print cost. On the other hand, there are other rewards that people can pledge on. My approach was to ensure that all of these had an equal or higher gross profit ratio. This meant that for every pledge on something other than the main reward, I actually did a little bit better. This helped balance out the cost overruns, and in the end the campaign didn’t cost me too much!

Well, that’s all from me for now. I plan to revisit this. I’d like to put together an online calculator so that people can try it for their own idea. Let me know what you think in the comments!

*The cost for printing was quite tricky for me, as it shifts with the size of the run. I had to get quotes and calculate, then requotes and recalculate to narrow it down.

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Interview: Tegan Morris – Not Always Lost

I recently had the privilege of interviewing Tegan Morris about her successful pledgeme campaign.

Tegan raised $4,835, passing her goal of $4,000 to cover the self-publishing costs for her book, Not Always Lost.

tegan cover small

Life is good for Shannon Carlisle and it seems like her high school senior year will be smooth sailing. But a terrible car accident changes that. It turns not just Shannon’s life upside down, but her boyfriend Richard’s too. Even with the support of those around them, will they crumble or thrive as they face old demons and an uncertain future?

Tegan is an advocate, public speaker, youtuber and author. She also has muscular dystrophy and uses a wheelchair for mobility and requires assistance with some general tasks.

What follows is a sort of condensed transcript of our conversation, which is why there’s a lot of long sentences. As Tegan said herself “I’m very rarely short of words!” If you’re finding it too long, skip to the last question. It was just an off-the-cuff throwaway to get back into it after I stopped for a drink, but I loved her answer.

Adam: When did you first have the idea for the book?

Tegan: That was probably about three years ago. I actually started writing it as a fan fiction, because at the time I was really, really into the TV show glee. It was at the end of the fourth or fifth season. One of the characters went through a short period of time aquiring a physical disability through an accident. So at the time I was like “wow, its a really interesting concept to kind of play around with in a story and have a look into how that might impact on her relationships with people. As I started putting in original characters around her, rather than just show characters, I really found that the original characters were taking up more and more space in the story, so I was like “ok, well, maybe I should just completely forget about these characters from the show and the constraints of these pre-constructed characters and just make it an original story. And even as I was going on then I didn’t really initially think it would turn into a fully blown novel. I was working with one of my support workers, who was kind of, for a time acting as a sounding board and writing assistant, that really helped with getting into it in a serious way. And then, when she left employment with me I kind of went into a bit of a writing hiatus. I didn’t really have a lot of inspiration or the writing process fully developed enough to where I could do it confidently by myself. So I had about nine to twelve months where I really didn’t touch it at all, and did other bits of writing for other things, that were either back to the fan fiction genre or writing articles for organisations that I’m connected to, for their newsletters or various other things but nothing directly to do with this story development. And then at the end of that hiatus I started working with a volunteer who became my writing buddy, and I started really getting back into creative writing. And then that lead me back into looking at my novel, or what became my novel. And then I worked with loads of other people as writing support, to help me with the dictation of the novel, or proofreading, or storyboarding, that kind of stuff. Because when I wrote, or when I’d written this one particularly, its been a very organic process. I never really brainstormed the story or planned ahead. So it was just kind of working with the initial idea and then seeing how things played out and all the ideas that occurred as we talked over what had happened, to see what could happen. And then using the developing character that we were trying to uncover and through these events say “ok this character has responded in this way to this situation so, if that happens down the track that means that it’ll have this implication to their actions, so it was a bit of an archeology I guess, of these characters. With the storyline, you uncover things as you go, and building up your knowledge of character as you go, rather than preplanning and having everything mapped out step by step.

Adam: It was a bit of a suprise to me, when I read the book, that so much more space was given to the impact that the access issues had on the main character’s emotions and relationships than to the access issues themselves, but relationships and emotions are clearly what interests you. There’s probably a good reason I’m an engineer, not a young adult author.

Tegan: For me, the intention for the book overall was around awareness raising for people, of the complexibility, but also the relatability of the experience of having a disability. Because (this is my impression as a person who’s been born with a disability and lived with a disability all their life) a lot of people who don’t have any understanding of disability whatsoever think that its “those people out there” who have a disability, but the reality is that so many people have disabilities and they’re not always so obvious as someone in a wheelchair, or in crutches, or seeing eye dog, to kind of show that they’re disabled and in terms of the relatability I wanted people to understand that although there are some differences to our experiences, there are a lot more simillarities in terms of our emotions and our experiences and our ambitions and all these other things, so especially for young people, I wanted to help them be able to relate to people who are different, whether its (in this case) disability, but in a general sense anyone who has difference in some way, because, I think, especially when you’re a young person its very easy to get put off and think, “ok, that person’s too complicated”, or “it wouldn’t look good for me to associate with that person” for this reason or that reason, but if they identify with them as just another person who has the same sort of interests in one way or another, then it becomes about whether their personalities fit together, rather than their social spaces fit together, and I hope that that would be a kind of positive outcome of bringing those sorts of things in a kind of subversive kind of way into the thinking of young people. And that’s why I chose a character who was in the beginning very successful, very popular and although she had a bit of history to her, which you find out through the course of the book, which gives her depth, I felt that she would be a good, developed character, that would help, when she goes through this accident in the car, and is partially paralysed, that she would still be relatable, because its about aquiring a disabilty after you’ve already got the sense of her as this succesful, driven, well connected, person within this highschool setting. So rather than just having a character that, from the get-go is disabled, if you like, I felt like that would be a little bit harder to develop a sense of connection for people who don’t have that kind of, maybe, awareness or openness of thinking to begin with. So there was kind of a bit of strategey about it on some level I guess, in terms of how I chose to shape, particularly, the main character.

Adam: Why did you choose to crowdfund?

Tegan: People said “why don’t you publish?” and I started looking around for publishers, but I guess, as a lot of people find, its a very very tough market to get into as a first time writer, without any preestablished credit in some other field, so I spent about a year, thinking looking for publishers, and I was approached by a publishing company over in the UK, and they said “hey, yes, actually, we’d be interested in your work, but you need to pay us X amount of pounds” which was a massive amount “to secure the publishing of this work” and basically offsetting the risk that would be in publishing the work and I was like “Umm, no, no thanks, not going down that path”. And so I realised that although they were sort of representing themselves as a traditional publisher, showing a logo and reputation, they were essentially just a publish-for-fee service. So I said “Ok, well I’m not really having a lot of luck here, finding a traditional publisher, who I was going to work with”. Still really wanted to get this out there and get it into people’s hands and hopfully get it into the community and into schools or whoever I can share it with, so I said “Ok, lets self publish”.

Adam: How long did it take you to make your video?

Tegan: It was actually a video that I had already made for my channel, so I kind of cheated in that respect, it was kind of a preprepared production of sorts, because I had written this piece earlier in the year, last year, where I was early on in the stages of editing and looking for publishers to start talking about my book, because I could kind of see it becoming a reality, even if I didn’t necessarily get it published the way I’d initially planned. It was one of those things where I kind of has this thing premade where I’d done stuff, yeah so I’ve got this thing, so if you’re interested, start talking about it, start sharing it with people, and see if we can get some interest going and initially yeah at that time it hadn’t moved onto anything, but it was the basis for the pledgeme campaign when we did that.

Adam: What was it like writing the information for the campaign page?

Tegan: I had talked it through with a couple of people, and said “hey, can you help me?” and we kind of did it over a couple of afternoons I think, just three or four hours each day, just throwing ideas around and kind of re-wording bits here and there and meshing things together and then saying “ok, is this as good as we can make it?”. Some of the girls who work with me on a regular basis, some of them have backgrounds with academic writing or creative writing or various other things and sometimes even just people who don’t necessarily have the writing background its just good to have people to be sounding boards, helpful to talk things through, throw ideas around with and just sometimes speaking ideas out loud can be a good way of clarifying things. And that was kind of also how my writing process was, that’s why when I hadn’t been working with someone closely around writing as a process I had come to a standstill, until I found somebody else who I clicked with in that kind of creative space and started those fires again, and started bringing it up and talking about characters and ideas and just sit there for several hours and kind of hash things out and say “well, what if this happened, how would that impact on this character or this event” and kind of measure things out and engage in things.

Adam: Did you get media attention?

Tegan: Yes, I was in the local paper, fortunately I had a pre-established presence with the local paper over the years with things I’ve done, things I’ve been a part of, shared. So they kind of knew about me, so I went and was like “Hey!”, well it wasn’t me directly, it was one of my friends, who is a journalist, who went to them and said “Hey, Tegan Morris has got this book that she’s trying to publish, and she’s got this pledgeme campaign, so they were like “hey, ok, sure, yep, we can share the story about that, sounds good”, so yeah, it was really helpful with kind of getting the awareness about the campaign

Adam: What was it like during the campaign emotionally?

Tegan: [even with press about the campaign] it was still very much a never-wracking “will it get the target before the deadline?” and I’m sitting there day by day, week by week, nail biting, because, for the longest time, it really was only shifting by $20 at a time, or it would sit there for a couple of days, or multiple days, with nothing at all. “Ahh! Its not gonna get there, its not gonna get there!”. All this money is going to have to go back to these people and like, I don’t begrudge returning people their money if I don’t reach the target, that just means I’m going to be even further away from getting this project done, which means so much to me, so such a real never-wracking time.

Adam: How did it feel when you actually funded?

Tegan: It was amazing and it was actually a very strange thing, because it was I think it was late on a Sunday night, it was actually one of my friends who’d seen it before I did and they put up this post on Facebook and they’d tagged me in it, saying “wow! Tegan’s just passed her pledgeme campaign target! Congratualtions! I’m so happy for you”, I was just like “What?” because it was like a day or two days befor the shutoff, and I’d been so, so scared that it wasn’t going to reach the target, and it had still been four or five hundred dollars short that afternoon “oh my gosh, oh my gosh” and then seeing this post from my friend, I was like “Are you serious? Is this for real?” so even though it was like, 11:30 at night, I went straight to the website and checked and I was just like “oh my gosh! Yes! It is real! This is actually happening!” So happy! And then I was just going all over social media, going “YAY!” and just kind of doing cartwheels in my head and feeling so stoked about it. And then I started obviously getting caught up and thinking, “now that I’ve done this, what will I do next?” and just sort of jumping ahead with plans and that sort of stuff, but it was a really good feeling.

Adam: what was it like once you’d finished the campaign and had to actually make it happen?

Tegan:The only illustrations we had to work out were the cover and the formatting and printing. Because I was self-publishing, I sought out a publishing supervisor so I worked with a guy called Martin Taylor, up in Auckland who’s had 20 odd years of publishing industry and understands the ins-and-outs and has contacts with publishing services in various places. So he was able to kind of walk me through the process of making sure that the editing that I’d had done was far enough that it was ready for the formatting, and cover design, that kind of phase. Because when I went to him initially I said “tell me what you think I need doing” I told him I had had intial editing done, he said it didn’t need further editing from his perspective, so that cut down a little further expense, and the he had contacts with a graphic designer who helped create the book cover and when I went to see it with Martin, up in Auckland, we spent two or three hours talking over formatting options and text type options and size options and cover ideas for the cover and I took my mum along, because she’s a visual kind of person, whereas I’m not really so much a visual person, it takes me a long time to really see how stuff will work, to see how I will respond to things, whereas she’s kind of a see it, understands it, can respond to it kind of person. And we both intially liked the cover design that he’d offered, but then when I took it away with me and we had the kind of internal stuff hashed out already, I still was see-sawing a bit about the cover and I started showing it around to a few people, and there was mixed responses, and there was a lot of people who said “yes” and there were other people who said “not so sure”. I thought “maybe try something else” I want to have it as strong and as non-problematic cover as possible. My only directives to the graphic designer had been I want it as gender neutral as possible and with strong text and I didn’t want it to be cluttered in any sort of way with pictures or fluffy things or text or anything like that. In the end, after discussion with people, I ended up coming up with the design that they went with, so the graphics designer just put it into the professional software that they use. They had chosen the colours and stuff.

I think it was about a month and a half after the campaign had closed that I was able to start actually having the books infront of me and working out how I was going to send them out to backers.

Adam: how did it feel when that first box of 100 actually arrived?

Tegan: That was pretty awesome, I’ve actually got some photos, footage of me and my dad taking a penknife to the top of the box and being like “yes!” and having the books all over and around me and “yes!”.

Adam: How did you feel once you had completed, sending all the books off to all the backers?

Tegan: Yeah, it was pretty amazing, it was like “yes, this is another succesful part of the stage of actually having something to kind of physically have my hands on and kind of show that this hard work has actually created this thing.

Adam: Are you selling the books now?

Tegan: Yes, on Amazon, book depository, hoping to have it on audible. I really want to get it into audio book form, because at the moment I’ve got the digital version through kindle, which can be played on various readers. I’d really like to get it into audio book format because I know that’s quite a rising market and there are a lot of people who would prefer to listen to a book than to read a book, whether its in digital copy or physical copy and also form an access point of view, it makes it a lot more accessible because if people have vision issues they can’t read so easily if people have significant physical impairments, they can’t necessarily handle a book and they may even struggle to access technology to digitally turn pages, so having an audible book is kind of the ultimate in accessibility.

Adam: Tell me about your youtube channel?

Tegan: my youtube channel is called Tegan Meets World and its basically all about positivity and fun and kind of trying to think openly in different ways and it just so happens that I have significant physical disabillity and it is part of shaping my impression and my experience of the world but my content is kind of all over the place, you know, its travel and its video diaries and its rants and its reviews and its interviews and cooking videos and its just all kinds of stuff and in a subtler way its becoming more and more about the relationships I have with people and how they bring different things into my life and that’s kind of the common thing with the story in my book. Because it is very much about thinking and the power of relationships to shape a person’s potential.

 

Adam: Why is your hair purple and blue?tegan morris

Tegan: Ah… this is the outer representation of my inner energy. I’m not meaning that in an airy-fairy kind of way, but I have quite a bright personality when you get to know me and I have a lot of words to share, given the chance, but as I kind of mentioned, a lot of times people can be reluctant to make those kinds of connections initially because they see the wheelchair and they see my very still physical person and so they kind of start initially making assumptions about, you know, “does her brain work?”, “how do I start a conversation?”, you know, “the wheel chair is really intimidating”, all that kind of stuff, and that’s something that a lot of disabled people face, but, I mean, everyone obviously different personalities and different ways of dealing with what their disability means to them, but for me, I’ve kind of got to the point in my life where I kind of want to grab every opportunity that I can and have my life be as exciting and dynamic and fun as possible, so I have bright hair as a way of breaking the ice, I guess? And showing my inner sparkle on the outside. It gives something for people to comment on, or start a conversation with. You know, its that same as people maybe who have vision impairments will have an assitance dog, people will come up and have a conversation focussed on the dog, rather than the person’s physical situation and the same, when I was younger, I had a maltese terrier dog, which was a little cute fluffy thing and so many people would come and stop and say hi to me “your dog is so cute”, “can I pat your dog?” “what’s her name?” “what breed is she?” et cettera, et cettera, and that was kind of an icebreaker and it gave people the “in” to start a conversation where they wouldn’t necessarily approach a person who’s just going about their life being who they are, or a person in my situation, or simillar situation where we’re different in some way, it can catch peoples attention, but they don’t have any valid reason to come and start a conversation. Whereas if you’ve got a cute dog, or if you’ve got bright purple hair, it gives people something else to put their attention, to put their interest into, rather than having been caught being curious or staring unintentionally, which is something that kids and even some adults still do these days, just they’re not used to people being in their community, living their lives and just being as they are, whether that’s in a wheelchair or some other form of disability but wheelchairs are the most obvious representation of disability, so its still kind of the most … I’ll use the word shocking, but its not quite the right word. Its kind of the most stand-out thing so people can be like “oh, that’s interesting, to see someone in that situation here, how do they manage?” and try to imagine how they do what they do or how do people with them get them to manage what they’re doing. Because its something that’s such a foreign concept to how they go about their lives. So you see kids staring, you can kind of say “oh, kids are just curious, they don’t know any better” but then you see the adults kind of trying to reprimand them for being curious and not knowing how to interpret what they’re seeing, its like, I’d rather go up and say “hi, I’m Tegan, how’s your day, are you enjoying what you’re doing” and show the kid that, yeah, I’m a person, I’m not some sort of strange being or a machine or whatever their imagination creates as a reason for them to understand what they’re seeing, because it doesn’t help for the adults to shame them or reprimand them for trying to understand something that they haven’t seen before. That’s why I’ve started doing these things, like the empathy project, because I want to give people an kind of physical understanding, or a real understanding and have somebody who’s not used to it being put in a situation where they experience a little bit of what it can be like. Because that can really point out the strangeness maybe, or how it differs from their day-to-day, whereas, if its somebody in my situation, I’ve been this way from birth, this is my lived experience from both, so things like being out in public and having people notice me, or to stare or whatever, I very rarely actually notice that, wheras there are other people who have disabilities maybe who are still more self-concious, or maybe newer to the experience of being disabled, or for whatever reason, and they still feel very much aware of things like people’s curious behaviour. They aren’t necessarily clear enough in their understanding or what it means to them or their confidence to talk about it, to be able to clearly represent that to other people. So having people who have no concept of what it would be like, put in that situation and then be able to translate it with their own experiences, I thought was a really good way of helping to lay the groundwork for other people to be more aware and I’ve kind of got plans in the next few months to maybe find some more volunteers and a new location and repeat the same sort of process.


I hope you’ve enjoyed my first interview as much as I did. I’m hoping to interview more crowdfunders, though the format may change quite a bit as I figure out what I’m doing.

Thanks for reading! 

Adam

The Why and How of a $25 Main Reward

Why?

The most popular reward point for a crowdfunding campaign is $25. Its an amount that a lot of people are willing to pay for something where their motivation is often at least partly altruistic (they believe in your idea) and bears some risk (unlike in a shop, they don’t have the item in their hand as they give you the money). So it really helps to have a really solid reward at this price point.

Here’s what my campaign results looked like:

Pledger numbers at reward levels

There are exceptions to this, if your crowd is unusually wealthy, generous or perhaps highly engaged with you and your cause.

How?

Getting a solid reward at $25 is definitely easier for some campaigns than others. When you’re first making plans, the chances are not terribly high that the main product of your project is priced at $25. But if you can, it is worth adjusting. To do so, it helps to keep your underlying goal and planned product separate in your mind. That leaves you free to adjust I’ll try to give you an idea of how with some examples.

I crowdfunded for a children’s book. My book was to be a collection of little stories, each illustrating a particular feeling. I had initially written about a dozen stories and laid groundwork for more. The goal was to make it easier for kids to learn the names for their feelings. There’s the first step – keep your underlying goal separate from your planned product in your mind. When I was planning the campaign and first learned about the $25 reward point idea, I was thinking that I would publish in three books, with six stories each. Once I got quotes from printers and illustrators I made some adjustments. As well as deciding to make my first campaign for just one book, I chose the number of stories in that book (five) based on what made it work at $25 per book. So there’s step two – if you can, adjust the product to fit a $25 reward.

As another example, consider Feel Good Period. I had a chat with them when they presented their plans at an Entrepreneurs Unleashed event. They want to run a give-one-get-one arrangement, where women can buy a menstrual care package that provides them with the monthly necessities plus some nice things (chocolate, heatpack, etc) and also provide for someone in need (via Auckland City Mission/Women’s Refuge shelter) to receive the monthly necessities (that’s their underlying goal). They’ve recently been selling their care packages at markets, at a price point of $15. This might well be the optimum point for a market, but my advice for them (if they crowdfund to launch their business) would be to re-arrange things a little. One way to do this would be to boost the contents a bit (add a scented candle or a sachet of bath salts maybe) and turn the monthly care package into something worth $25 (that’s the adjustment). To give you an idea of the impact of this, if the 45 people who pledged for a book on my campaign had been doing so for $15 instead of $25 then that would have been $450 less towards my goal.

That’s my two examples for now, but I’ll try to post some more. Being able to keep your underlying goal separate in your mind helps a lot in business as well as in structuring a crowdfunding campaign. If you’ve got plans for a crowdfunding campaign, let me know in the comments and tell me how you’re going to make your $25 reward a good one.

 

 

 

Progress on My Second Campaign

It’s been about a week since I posted my list of the things that I need to get done for my second crowdfunding campaign. Here’s how the list is:

Stuff That I’ve Done:

  • Correct my facebook page header – I did it, the typo is gone. Its kind of nice to tick something off.
  • Send out an update to people who signed up for the campaign-specific mailing list – As per plan, I shared what the Vol.1 cover page would look like. I also told them a bit about why it looked like it did and asked if they could make suggestions for Vol.2. 14/18 people opened the email (high score!) and one person clicked through to my facebook page (not such a high score). Nobody made any suggestions for the Vol.2 cover (a little disappointing).

Stuff That I’ve Done, But Still Need to Do:

  • Build more crowd – I created a mailing list specifically for the upcoming crowdfunding campaign. I posted about it in several Facebook groups and even paid $7 to boost the post on my Facebook page, looking to get to the friends-of-people-who-like-the-page group. I’m not sure if that was the best target for this particular thing. Ah well. Almost 20 people have signed up. That’s not a huge list, but it is a list of people who are keen enough to fill in another form, so I’m counting on these being people who are kind of serious about being part of this. I’m pretty happy with 20, but I’d like to keep pushing this list.
  • Get content lined up for posting – I managed to turn some testimonials from teachers into posts. Facebook tells me that each one reached about 170 people. Now I need more for the week coming. Easy shortcut would be to bring back the posts I made during the Jack Feels Big campaign. As far as just having something to post so that I can get noticed, it might work? I made a series of posts about potential stories to go into the final book. Some of them got a bit of engagement.
  • Make up an A4 flipbook – This should probably go back on the back-burner, since it was mostly for the teacher visit that fell through. I made some progress, but ran into technical problems (I got the pages printed, but it was too thick for their binding machine, plus their wire binding machine was broken anyway).

Stuff That I Totally Haven’t Done:

  • Record some B-roll for my campaign video – I made arrangements with a teacher for a visit, but that fell through, which is probably just as well, because it turns out that work got rather busy at the end of the week. I’ve got another school lined up, but I’m hoping to have launched by then. I might be able to get some footage with my cousins reading to their kids. It does get extra tricky, because I really need to be shooting during daylight hours to get quality footage.
  • Re-photograph the book – I just didn’t do it. A whole weekend, didn’t get around to it. This is something I can do in the evening after work. I just need to get my act together.
  • Record the main line of my crowdfunding video – Like the B-Roll, this is something best done during the day. I just didn’t get organised enough.
  • Finalise the campaign details – I got clearance for one of the rewards I needed to check on, but there’s another, plus all the other details to make concrete.
  • Talk to possible big supporters – I have a couple of supporters who may be willing to provide considerable support, I need to get talking to them.
  • Put together copy for the campaign. A lot of this will just be updating last year’s stuff.
  • Load it all up onto pledgeme – ties in with the two above. Maybe I need to make that must-do-Tuesday evening.
  • Write a press release. – put this off, still a daunting task.

Stuff That I’ve Now Added to the List:

  • Update campaign specific mailing list – now that I’ve got 20 people signed up to get extra special updates ahead of the campaign, I’d better get some extra special updates put together! Next one will be about how the backers will get to choose feelings. I’m thinking about changing the format for this. In the first campaign I did some polling throughout, but only actually counted the final vote at the end. This time I might take votes at regular intervals. That allows me to post four times during the campaign saying “pledge now and you’ll get to vote on feeling number X!” (probably end of first day, then end of each week) (though I could tie it to percentage of funding – votes at 10%, 30%, 50% and 60%, hmm) . In my first campaign I got an article in the paper. I posted about it on my facebook page and got five people pledging who I’d already told about the book. It is important to be a squeaky wheel…
  • Book visits for New Plymouth – I’ve got a trip to New Plymouth planned for the middle of the campaign. Auckland’s a big place, but New Plymouth is where I’ve got the most connections. There’s a journalist there who has written about me before, too.

 

Obviously there’s too much stuff in the lower lists, but I’ve written things down, so now I’ve got a plan

Squirrel’s Got the First Secondary (and other P2P lending thoughts)

I think that the developments in peer to peer lending in New Zealand are pretty cool. One thing that I reckon is really cool is the way each P2P lender seems to have taken a different approach.

I was stoked when Harmoney first came out, because they make such practical sense of money lending. I like the way that the descriptions of each loan make it possible to see lending for what it is – a useful exchange. I’m sitting here with money now, happy to give up use of it in exchange for more money later. There’s someone out there with an identified need for something, and they’re willing to pay money later for use of it now. I just don’t have that connection when I put my money into a savings account.

Squirrel took a different approach. It’s sort of simpler to invest on their platform. You don’t have to worry about spreading your investment out over lots of loans. They have Loan Shield, which effectively spreads the risk of defaults already. Now they’ve introduced a secondary market, so you can pass your investments on if you need to get your cash out. The arrangement is that someone else effectively invests in the remainder of your loan at the same interest terms, so its still pretty simple. I think it’s really cool that they’ve got this option. It significantly reduces one of the risks of investing with them (what if my personal circumstances change and I want to regain use of the money). More than that, to me, it adds legitimacy to the product. I bought “shares” in Squirrel when they raised equity through Snowball Effect. But I probably can’t sell those shares anytime I want (technically, I might be able to make arrangements). I knew that was part of the bargain when I bought into them and I’m ok with it, but without the ability to sell them, they just don’t seem like proper property. I guess that’s why I’m so pleased with Squirrel setting up a secondary market.

While I’m at it, I should probably mention the other P2P lender I’m familiar with. Pledgeme have recently ran their first crowd-lending campaign. Pledgeme’s P2P lending is very different from the other two. One of the cool things about crowdfunding a project is the community you build, and Pledgeme’s lending is really focussed on community. You can’t fractionalise your loan into $25 lots, or count on a default-spreading system like loan shield. But the loan is made to a specific organisation that pitches a specific need. It will be interesting to see what other campaigns come along, but this first one, for Eat My Lunch, was a great way for people to mix investment with support of a cause. I have “shares” in pledgeme (who crowdfunded themselves, twice) and was excited to be the first pledger on their first lending campaign.

There’s also Lendme, but I couldn’t sign up on my phone and haven’t gotten around to it yet, so I don’t know much about them! Houses I hear. Not sure. Sorry!

So, what started as a post about Squirrel’s news has turned into a bit of a ramble about New Zealand’s P2P lenders and why I think they’re cool. I’m going to try to make my posts a little bit more sensible in future, but I think I need to get into the habit of writing, so today it’s just a ramble.

Thanks for reading!

 

Panic Stations!

I just sent an email to a mailing list telling them I was planning to launch my second crowdfunding campaign by the end of the month, and I’m not really ready yet!

It was a bit rash, but I think I’ll be able to pull it off, or near enough. Here’s what I have gotten done:

  • Established a crowd through my first campaign and ongoing sales
  • Built more of a crowd through marketing-by-content creation
  • Primed the crowd with news of my project (the email I just mentioned)
  • Roughly planned out the campaign

 

Here’s what I still need to get done:

  • Build more crowd – there’s another facebook page that I should have posted to by now
  • Record some B-roll for my campaign video. This is the stuff that the talking goes over. My campaign is going to be for a pair of books following on from my first, so footage of the first book being read to kids is what I’m after.
  • Re-photograph the book. I’ve got photos already, but the second print run came out looking better and I’d like to have the best photos possible.
  • Correct my facebook page header. The “cover image” on my facebook page has text on the image, complete with a typo, which is just dumb.
  • Record the main line of my crowdfunding video. I’m referring to the clip that’s me explaining everything that needs to be known about the campaign. I have the script in my head and I’m trying a new thing of not writing it down. Now I just need a free (daylight) day to record it.
  • Send out an update to people who signed up for the campaign-specific mailing list on the weekend. I got the artist to make a cover page, which I plan to make the topic of my first update.
  • Get content lined up for posting throughout the next couple of weeks, and need to keep it topped up. This is for the mailing lists, the facebook page and whatever else I can think of. I already have some facebook posts scheduled that are just images alongside testimonials from teachers about the first book. Well overdue to be posting on all accounts.
  • Finalise the campaign details (budget, rewards etc). A couple of the rewards are dependent on outside parties, I need to confirm with them.
  • I have a couple of supporters who may be willing to provide considerable support, I need to get talking to them.
  • Put together copy for the campaign. A lot of this will just be updating last year’s stuff.
  • Load it all up onto pledgeme
  • Write a press release. This one still scares me. I have to write in the third person. I feel like what I’ve written so far must sound so stupid. I just don’t know how to write quotes for myself without it seeming ridiculous.
  • Make up an A4 flipbook to take on my next school visit. This one’s not actually related to this campaign, but to a hypothetical future campaign to produce something that is more useful for teachers and possibly also deaf people.

I am trying to fit all this around my full-time job and church commitments. I also know I’m terrible for procrastination (particularly for the bits that scare me, like writing press releases). It helps that I got past a lot of the things that scared me last time. But there’s also a risk that my confidence might cause me to underbake things (my current mental script for the video may be a bit underinformative).

I kind of made the announcement to force myself to get into gear. Wish me luck!

Earlybird Plans

I tried to use earlybird rewards to get my crowdfunding campaign to hit 10% super fast. It didn’t work. In about three different ways.

In order to budget for my campaign I assumed that I would sell 25 early bird books (25 x $20 = $500) plus 180 regular priced books (180 x $25 = 4500). All other rewards had a cost margin that was the same or better than the regular priced books, so that I could be confident of having enough funding if I hit the goal ($5000).

The decision to limit the early bird books to 25 was based on Kat Jenkins’ advice about using early bird rewards to help get that first 10%. I should have read more carefully – Kat recommends more of a discount than what I went with…

The first way that the early bird discount didn’t work, was it didn’t magically get me to my 10% goal straight away. I had a list of people who I had primed and who I thought were definitely going to pledge immediately. The early bird discount was part of the justification. I’d spoken to these people, asked if they were interested, asked if they’d like me to tell them about it straight away “so they’d be sure to get the early bird price”. When I opened the campaign less than half of them actually backed it straight away. This was a bit of a blow – my plan involved having these people backing me quickly to give me credibility for the next batch of people I contacted. I knew that there was a big difference between people saying they’d buy and people buying, but I thought I could count on these people. Maybe I should have had a bigger discount on the early bird books. More likely, I should have put more effort into developing a stronger, larger list of people to make my first 10%. I only managed a first push of 4%, meaning that I had to go out to my next tier of contacts with about half the “social confirmation” that I’d wanted.

The second way that the early bird discount didn’t work, was some people ignored it. Some of my early backers were so keen to support me that they ignored the early bird offer and took the full price book. Others opted for the signed book ($50). When I got to 10% I still had some early bird books available. A pleasant surprise, but not what I’d expected. Something to keep in mind.

The third way that the early bird didn’t work is that I sold more of them than I’d planned. This is a little bit platform-specific. When I ran my campaign, Pledgeme didn’t have an easy way to allow backers to pledge multiples of rewards. I had one or two of my early backers wanting to order multiples of books. I wanted to make it easy for them, and I just told them to pledge on the early bird reward, but mark up the amount (click $20 earlybird reward level, manually override to $60 for three books). But this only counted as one reward toward my limit. Since the margin on the early bird book was lower than the margin I had budgeted on, too many early birds and not enough high-margin rewards could have resulted in the project going badly negative. In the end I got quite a few of the higher margin rewards backed and I’m not going bankrupt. Kat has since told me that that for Pledgeme the best work-around is ask backers to pledge on the same reward level multiple times. I’m not sure if the inconvenience might be an issue. I don’t want to put hurdles in front of people giving me money!

Here’s how my campaign looked after the first day.first day.png