In 2006, a young entrepreneur was running a support platform for video bloggers. He called it fundavlog.
Keen on spreading the word; he started a blog explaining the idea behind fundavlog and coining a term for the concept he was trying to introduce.
I have used a recent buzzword within fundvlog babble. That word is Crowdsourcing. My first interpretation of it was a broad one… one that can be applied to generalities surrounding concepts/observations such as ‘smart mobs,’ ‘wisdom of the crowds,’ ‘new economies,’ ‘open-source,’ and ‘self-sustaining communities.’
…
But I have decided that another similar term can be used to explain the general ideas being presented here. And I think that term is ‘Croudfunding.’ Money is the root. Money incubates, inspires, and give rise to good content. Money provides new and/or rejuvenated opportunities. — Michael Sullivan
Michael figured that building a community from an online ‘sphere’ was a challenge but not impossible. He looked at the idea from different angles and completely out of the box. He was very impressed with mediaventure.org, both the initiative and projects funded through it.
He wanted fundavlog to raise money for projects like mediaventure.org. But unlike mediaventure.org, he wanted the focus on content creators rather than the industry.
Although his project failed, he came up with two basic rules for crowdfunding:
Rule #1 Not to pilfer facilitated funds.
Rule #2 Absolute transparency.
Crowdfunding is based on “reciprocity, transparency, shared interests and, above all, funding from the crowd.”
If you haven’t read yesterday’s article, I suggest you read it first and then come back to the current one to understand how crowdfunding can be your prime strategy to write and sell books.
Crowdfunding is not a marketing platform.
Most people make the mistake that they think crowdfunding is a marketing gimmick, just like Mailchimp or LinkedIn.
That is not true.
Crowdfunding is a sales platform just like Amazon.
It is a place where you can test your book idea and sell it even before you have written it.
Isn’t it cool?
Before I get into details to describe the difference, let me clear a few more concepts about crowdfunding.
There are typically three types of crowdfunding:
- Reward crowdfunding, where you raise your funds by reaching out to supporters, who receive a small gift or product sample if they pledge a certain amount.
- Debt crowdfunding is where you receive a loan and pay it within a specific time frame — some prefer this over a bank loan because it can be much faster.
- Equity crowdfunding means you give a portion of company ownership to the people who provide you with funding.
Although Kickstarter works on the Reward Model of raising money, one thing to understand is that you are, in fact, raising a debt which you will have to pay in the form of the product which you have specified in the pledge.
So when you hear someone say they raised $1M on Kickstarter, they haven’t raised any money at all. They have, in fact, pre-sold their products.
Ben Einstein has written an excellent article to explain the misconceptions about money raised on Kickstarter. Have a read of it. The link is below.Crowdfunding is Debt
Kickstarter, Indiegogo and other crowdfunding platforms are often misunderstood. It definitely isn’t investment: It’s…beneinstein.medium.com
Crowdfunding is one more market.
It’s one of the rare self-publishing markets that offer to pay you in advance. It also has a great financial incentive, paying roughly 92% of your list price.
But once your campaign has run its course, it’s pretty much over until the next time. The platform isn’t designed for long-term sales.
Since 2009, Kickstarter has helped raise over $5B in revenue for nearly 200,000 successful projects.
Of this, publishing rates $185M on 18,000 successful projects. Publishing is sixth out of fifteen potential categories. That’s an average of $10,000 per successful project, but it’s not exactly a linear curve. Only 4,200 projects have made $10,000 or more—still, a respectable 23%.
Gaming is the biggest category. The reason being Gamers adopted crowdfunding years ahead of writers and readers.
Readers are traditionally anti-technology. It took Kindle more than a decade to be accepted. Even now, given a choice, people prefer paper books to digital books.
But pandemic changed that big time. All of a sudden, there is a surge in eBook and audiobook sales.
However, writers’ participation at Kickstarter is increasing. Several bestselling authors are launching their books on Kickstarter.
Michael Sullivan, a bestselling fantasy and scientific-fiction writer, has successfully run eight campaigns; his last campaign raised $168,000.
Leo Babauta of Zen Habits campaigned to raise $44,700 for printing and publishing his book Zen Habits: Mastering the Art of Change. 8,211 backers pledged $244,255 to help bring his project to life.
Elena Favilli and Francesca Cavallo started a project to raise $40,000 to publish Good Night Stories for Rebel Girls — 100 Tales to Dream Big. That humble children’s book packed with 100 bedtime stories about the lives of 100 extraordinary women from past and present, illustrated by 100 female artists from all over the world, raised $675,614, much more than the wildest imagination of the creators. Their second campaign was even bigger, which raised $866,193.
But no one can beat New York Times bestselling author Brandon Sanderson’s records of raising $6.8M.
Crowdfunding can be a very influential market.
The important thing to keep in mind is that Kickstarter or any other crowdfunding site is one market. A very influential market.
Even a career-defining market.
It can be a complete bust, but only if you treat it lightly and give up too early.
Even if you have a few failed attempts, it doesn’t matter. Where else can you get the word out for your project and get paid in advance?
For many writers, Kickstarter is becoming their launching strategy. Once you have run a few campaigns, you will know how much effort to put into it and how much reward you will get from it.
Fear of the failed campaigns
A false hurdle to starting a Kickstarter campaign and any long-term Kickstarter success is the fear of what happens if your campaign fails to fund.
There is no doubt that some of your campaigns are going whether you work at them casually or aggressively.
But does it matter?
You fail at submitting your articles to reputed publications.
You fail at getting your manuscript accepted by the traditional publishers several times.
You fail at selling your book on Amazon.
Failures are just the stepping stones to success.
So what is my game plan?
Publishing hasn’t hit the same critical mass in the audience as Gaming has, but the potential is there.
Every writer who will use crowdfunding will improve the market and bring more audience to the platform.
That is what we need to do.
I intend to study Kickstarter for six months to a year before launching my first campaign.
During that time, I will support several campaigns both in publishing and other categories.
All that exposure will help me understand what kind of books do better on Kickstarter.
There is no secret to crowdfunding. Crowdfunding rewards ingenuity and hard work. Writers are familiar with both.
References:
- Archived blog on fundavlog.
- Crowdfunding Your Fiction: A Best Practice Guide by Loren L. Coleman.
- Kickstarter Stats
Disclaimer: I am learning about Crowdfunding. If my understanding is incorrect or the information doesn’t align with facts, let me know, and I will correct those.
Photo by Nicholas Green on Unsplash
