How to Crowdfund Like a Hacker
Kevin Rustagi is no stranger to crowdfunding.
Ministry of Supply, the men’s clothier that Rustagi co-founded with several MIT classmates in 2010, broke Kickstarter records last June when the company raised nearly $500,000–more than any previous fashion project–from over 2,500 backers for itssweat-resistant dress shirts.
Perhaps understandably, Rustagi was then thrown for a loop when Kickstarter turned down his second crowdfunding project, a line of lightweight metal business cardsproduced by his second company, Austin-based Hustle and Play, earlier this year.
“[Kickstarter] said it was not a ‘specific creative endeavor [and that] they would not fund business infrastructure,'” he says. “We believed that to be open to interpretation and filed an appeal.” Kickstarter denied the appeal, however, and Rustagi was forced to find another venue for his product’s launch. He stettled on Crowdhoster, a platform that allows entrepreneurs to host their own DIY crowdfunding campaigns.
Far from feeling bitter toward Kickstarter, however, Rustagi says he admires the crowdfunding platform–and recognizes that it has something fundraising entrepreneurs need: A large community of supporters. The attention of well-connected backers can make or break a crowdfunding campaign, according to Rustagi. He adds, “[On Kickstarter] people back you because their friends back you.”
So he devised a plan to identify the “movers and shakers” of crowdfunding.
“We wanted to find the top one hundred people that would embrace [our product],” he says. “We went to the backer lists and, using a combination of factors, found the people that want to be found.”
Kickstarter backers have the option to make their names–and Twitter handles–public on the site when they donate, Rustagi explains. By perusing the site for successful design and apparel projects similar to his business card campaign, Rustagi was able to identify repeat backers who were likely to identify with his product–essentially using Kickstarter’s tech to perform his own target marketing.
“If they have backed 20 or more projects they are likely an influential backer,” Rustagi says of his target demographic. Using the virtual assistant Fancy Hands–hired to scour Kickstarter’s project pages for backers who met this criteria–Hustle & Play was able to find and reach out to over a hundred potential supporters.
After an introductory email was sent to potential supporters, Rustagi found that Hustle and Play received direct responses from nearly one in four of the Kickstarter-identified backers–compared to about one in 20 responses from the company’s previous marketing efforts. He wouldn’t share the specific dollar amount raised.
“The responses have been overwhemingly supportive,” Rustagi says. For the most part, he adds, the potential backers have also been intrigued–read: not creeped out–by his method of identification. Rustagi says that it was important to him that the company be transparent about how it found these influential backers.
As for Kickstarter’s take, spokesman Justin Kazmark says: “I think unsolicited spamming is bad form and people don’t usually appreciate that.”
Kazmark added that while the network effects of Kickstarter may be accessible to hack-savvy entrepreneurs like Rustagi, backers have “learned to trust the brand” of Kickstarter and will likely return to the site to pledge to other projects.
Rustagi acknowledges that his marketing hack might not appeal to everyone, but hopes that target backers will be more excited about their influence over the crowdfunding ecosystem than they are concerned about how they wound up on his radar.
“I do not believe in spam marketing. I believe in finding the people who would find [this product] cool and are happy to give their advice,” he says. “We wanted to experiment. We knocked on the door to see who would answer.”
Hustle and Play has so far raised nearly $4,000 from over 60 backers for its business card campaign, and intends to expand its marketing efforts to garner interest in future crowdfunding projects and the design studio itself.
Source: Inc.