Life's a Pitch
Sachin Dutta, Growth Hacker and Founder of Tractionic, shares a growth hacker's perspective on why humans fail and how to succeed at crowdfunding.
The major reason pitches falter on a crowdfunding platform is that the founder hasn't secured enough pledges and backers before launching the funding round. Two reasons why, 1) The founder hasn't put any effort into pitching to investors . Often down to laziness or unrealistic expectations that the Crowdfund platform will have an endless sea of investors ready throw money. Some founders blame the platforms for selling the notion that "its easy, just get 30% and we'll open up the floodgates." This also shows a lack of business sense, not doing any research and thinking there is easy money to be had. Dummy. 2) The founder has put effort in to pitching prior to the crowdfund round, though hasn't successfully convinced investors to back them. You need to be pitching and learning from your efforts, tweaking the next pitch with the feedback from investors.
Too many founders get arrogant and unwilling to learn from these meetings and keep pitching the same unsuccessful script. Big mistake. Learn, change your ways, change your product, change your beliefs, adapt and survive. Show a willingness to take feedback and rejection, investors evaluate your reactions to their objections. How well you can negotiate gives credence on your ability to make the business a success.
GROWTH HACKING TIP #1
Similar to a B2B prospecting, you should research the backgrounds of the investors, show knowledge and interest in their activities. Automation, data scraping, send them some ads on social channels.
KNOWING YOUR AUDIENCE
Don't just work on bias. As practiced at the start of a growth hacking campaign, conduct a behavioural, psychographic and demographic analysis of your target audience/investors. Create a Persona Canvas for cohorts of your target audience and validate your assumptions through insight tools.
GROWTH HACKING TIP #2
By knowing your audience you can tailor your messaging to align with their experiences, play to their needs and views of the world. Furthermore it can help you identify where your best converting audience hangs out and get more of them. Putting yourself into their shoes, what are the objections they would have to your pitch? This is a big failure of many founders, they just can't step back and see that their baby is the ugly duckling everyone else does. Seriously get a grip. Step back. Do some backward induction, plan ahead your responses and mitigate these concerns with data in the pitch deck. Understanding your audience's goals. Investors are looking for a return on investment, think exit strategy, they don't want to help you build your dream business to run until the end of time.
Recognise the variables that affect the success of a crowdfunding campaign pitch. Newsflash - your audience is human. They are subject to irrationality, respond to triggers, display group behaviour. Behavioural finance has emerged as the primary challenger to classical finance theories, such as Efficient Market Hypothesis, and has steadily grown in popularity over the last two decades.
LOOK THE PART
People invest in people, so the saying goes. The onus is on the entrepreneur to prove they have what it takes to be a success. An investor must believe in the capabilities of the founding team. This is where anchoring - behavioural finance theory of using reference points for quick and dirty decisions - come into play. Investors are subject to anchoring since they are limited to spending a short amount of time on any one pitch.
- Be ready with content when investors do a Google search on you
- Optimise messaging and activity present on your social profiles
- Social following and engagement
- Website activity
- Having a demo / basic MVP will help visualise the opportunity on offer
- Product samples and meeting events help a pitch to stand out
LANGUAGE & MESSAGING
- People don't have time to spare, especially for those that ask for money. So get to the point quickly in your pitch deck: what is the opportunity, the terms and the exit strategy.
- Use sentiment analysis tools of your textual content, particularly on your headlines for updates, email subject lines and calls to actions.
- Brand identity should be present in your comms. When you start to deviate, you confuse and at worst raise concerns.
- Having a negative tone doesn't help your cause, if your raise is sluggish don't expect sympathy, you only lose credibility and investment.
- In email comms, be real, most are on their phone, use bigger fonts, keep on brand, short messaging, clear, quick call to action, personalise the message.
- Personalise the message. To kill it, do a video message to your investors.
Maximising effectiveness of media: stimulate an instinctual response
in the viewer. How people feel governs how they act and how they make decisions. Photos and videos are mandatory these days.
- Team photos not aligned with the messaging, brand and content strategy.
- Poor quality of photos, non-uniformity, out of date or unprofessional.
- Overdoing the shock factor. I remember a photo of a dead seabird used in one campaign for cleaning up plastics, which makes me queasy even today thinking about it. I was of course repulsed and never opened that pitch again, preferring to swipe on to the next campaign.
GROWTH HACKER TIP #3
Leave Spielberg at home. A major failure when it comes to creatives.This isn't art it is business. Looks are subjective. Chop up your pitch video into mobile optimised, subtitled, bitesize lengths showing one key message of your pitch, say 30 seconds max. Conduct a split test paid social campaign to see which message actually gets the best engagement. This validates the key benefit of your pitch the crowd believes in. Scale up on this messaging on your marketing campaign.
TOP OF MIND
You need to stay on top of mind. For a conversion, think of the fabled rule of seven. Social ads on Facebook, show up on LinkedIn news feeds, Google display adverts, emails, campaign updates and app notifications. Plan ahead and execute. Remember, you need to be nurturing via a build, measure, learn approach. Understand group dynamics, herding behaviour and the variables that should be of most concern.
- Lower funding targets are hypothesised to have a positive impact on success rates.
- Daily metrics of importance would be the percentage left to fund, the daily marginal gains of the pledged total is a positive signal and the time left till the deadline.
- Negative signals from these daily metrics displayed on a campaign page can all too quickly trigger investors pulling out en masse.