Rarely do we focus on funding campaigns that did not reach their goal. They are nevertheless as common as those that do and clearly more numerous than those that actually surpass their goal.
Seeing as failure can result from several factors, there are many lessons to be learned from the post-mortem of a failed campaign—a priceless source of information for anyone preparing to instigate a large-scale campaign.
- Case Study: Snoobe
- Type of production/project: Software/Digital Media (mobile app for Android)
- Campaign period: October–November 2013
- Goal: $25,000
- Amount raised: $15,322
- Company: Snoobe (CA)
Snoobe stems from a simple question: “Am I paying too much for my mobile phone plan?” And this question is followed by another one that is just as simple: “How much could I save if I had the possibility of choosing a plan perfectly adapted to my consumption habits?” In 2012, Stéphane Rainville and Thierry Maréchal decide to walk the talk and begin developing an app to answer both these questions. The key is the promise of substantial savings in mobile phone charges.
At the end of the summer of 2013, with a first functional prototype in hand and positive critical acclaim, the time has come to move on to the next step. The team opts for a crowdfunding campaign to balance the production budget and gain public notoriety.
Everything is methodically prepared. Several campaigns presenting similar profiles are dissected: initial objective, success rate, rewards offered, estimated number of donators and average donation per communication channel (friends, social networks, media, forums, etc.). All that data is entered into an Excel spreadsheet to generate goal projections. The goal is finally set at $25,000, which places Snoobe’s campaigns in the middle range as far as technology projects are concerned. The team hopes to raise that amount in a one-month period.
Things do not really begin very well. Kickstarter rejects the project because it considers that Snoobe’s app is a “financial tool” and the platform’s selection team therefore refuses it. A plan B is required, and the team turns to Indiegogo—hoping to take advantage of this popular platform to reach a broad public.
The campaign is launched on October 2. It begins modestly, initial momentum is weak and the campaign does not take off as was hoped. The team decides to readjust its message and rewards. This pays off but not enough to close the gap. The release of a testable beta version makes the project more concrete and sparks the curiosity of visitors, but it’s not enough to trigger a snowball effect and allow the campaign to really take flight. Given that the initial objective will not be met and that it’s a flex funding campaign, the team decides to release some pressure by ending the campaign prematurely on November 3. A total of $15,322—or 61% of the initial goal—has been raised.
Thierry Maréchal is lucid and is the first to admit that the campaign was a failure. However, when put in perspective, this failure taught him a lot about the project, its strengths and its weaknesses. In hindsight, he realizes that several things could have contributed to kickstarting the campaign or convinced him to not go down the crowdfunding road.
Although the financial projections had been carefully studied, the team did not have enough time to prepare other aspects. In particular, Snoobe could not really count on a community of followers. Mobilizing hardcore fans is often a determining factor for a successful launch and often the prelude to a successful campaign. Snoobe should have focussed its efforts on building this community of fans several months before launching the app to encourage initial donations and create a ripple effect that would have benefitted the remainder of the campaign. Without a strong start, people are more hesitant to get involved and share their credit card data.
But no clear plan of action had really been established to compensate should things not unfold as planned. Caught off guard by the campaign’s difficult start, the team was forced to react and remained in reactive mode until the plug was pulled on the campaign.
Not the ideal product for a crowdfunding campaign
Although an app that makes you save on your phone bills is both practical and useful, it does not necessarily generate the same type of buzz as a futuristic video game or high-tech gadget. As Thierry Maréchal points out, there are not as many phone plan forums out there than there are forums dedicated to gaming. Creating a “phoning” community can therefore prove to be a challenge. And he adds that curiosity does not necessarily translate into commitment: “Yes, people were interested—very interested even—in our product, but not interested enough to take out their credit cards.”
With dissatisfaction levels reaching close to 92%, another issue was that mobile phone operators are not very popular with consumers and everything that concerns the industry is met with suspicion… including a product designed to save users money. This suspicion implies a double challenge: having to do more to convince each visitor to support the project and risk seeing the message less spontaneously relayed on social networks. In both cases, it’s an additional stress for the campaign team that could result in a campaign ending prematurely.
Finally, a software campaign starts off with three psychological handicaps compared to a campaign to fund a physical product. Firstly, the perceived cost of passing from the prototype to the finished product stages is often easier to grasp for a physical item than a software application. Indeed, the “gift under the Christmas tree” effect does not apply in the case of an app: no chance of receiving a nice gift box containing something that smells brand new; simply click on a link to download and install the software. Finally, the “show-off” effect is compromised: it’s much more difficult to show off with an exclusive app than it is with a high-tech physical gadget.
A campaign with unclear limits
A campaign’s success depends on the effectiveness of its communication strategy. A crowdfunding campaign can serve several purposes: to raise funds, to create a community, to test communications or yet to assess a product’s market potential. However, the average visitor will spend only a few seconds on the project page (or reading ads on social networks); it is therefore crucial to launch the right message that will generate interest. In Snoobe’s case, the team initially played the card of a “sympathy campaign” by asking people to help Robin Hood (the project’s mascot) reach his goal of lowering market rates. Afterward, given the poor results obtained by this approach, the team tried to get things back on track by placing greater emphasis on the real advantage for users and the possibility they had to benefit from this advantage sooner by supporting the campaign.
The objective was also very ambitious in terms of the targeted geographical market. For a product available only in Canada as a beta release for Android, targeting the entire North American continent as well as several European countries could appear attractive on paper but ended up being a disappointment. Such a global campaign could have been successful, but it would have required means beyond those Snoobe was ready to invest in the campaign. Were he to start all over, Thierry Maréchal would focus on a more limited target market and hope that the initial success would gain ground.
Too much noise on the crowdfunding market
It is increasingly difficult to attract media attention on crowdfunding campaigns. The topic was very trendy and covered under every angle imaginable in 2013. However, for several months now, the balloon has been deflating. If you hope to interest a journalist, you need an original product, a campaign off the beaten path, a massive presence on the web and so forth. Having inspired itself from previous campaigns, Snoobe’s team did not take the full measure of this trend as it prepared its campaign and did not generate the media coverage that it was hoping for. This had a considerable impact on the campaign’s capacity to reach a broad public.
Another side effect of the abundance of campaigns out there is that there is more and more “online noise.” Often called upon to contribute, an increasing number of potential donators are closing out crowdfunding because they now perceive it as a nuisance or even a form of harassment. Once again, a campaign will have a maximum effect if the communication axis is carefully chosen and the target audience well selected.
Some good moves…
If Snoobe’s campaign was not as successful as planned, it nevertheless had some positive outcomes.
Firstly, it enabled the team to raise a little more than $15,000 from 331 donators. Knowing that most campaigns that fail do so in epic proportions (less than 5% of the goal reached), this puts the scope of the failure into perspective.
Secondly, the campaign allowed the team to develop the embryonic community that was missing when the campaign was launched, and that was one of the company founders’ goals. Well tended to, this new community could turn into a very useful asset for future campaigns.
The campaign also gave the company an opportunity to validate the marketability of its product. Apart from the financial contributions, the team was contacted by many potential future users who were interested in the product. Snoobe was also able to test the efficiency of its communication strategy and various sales arguments.
Thirdly, deciding to launch a crowdfunding campaign forces you to reflect on your project and change your order of priorities. As is the case with any sales pitch, you need to carefully evaluate your product’s strengths and weaknesses, know how to showcase its advantages and explain how the shortcomings will be managed. During the campaign, Snoobe’s team has able to work on its vision of the product, confirm certain assumptions and set aside others and get to better know potential clients and their expectations.
All in all, beyond the cold reality of the figures, what Snoobe learned from this campaign helped it put the failure into perspective and nevertheless generate some success from it.