(Copied from the Arcive.org entry as this page on CrowdFundingRoadmap.com is dead now):
We recently had the privilege of interviewing James Mathe, one of Kickstarter’s most successful crowdfunders. He shares a lot of useful insight on crowdfunding campaign best practices based on his experience. If you’re an entrepreneur who’s thinking of launching your first ever campaign, we hope you find this exclusive interview to be helpful & educational. Before we get started we’d also like to thank James for taking the time to answer the following interview questions.
Can you give us a brief background and overview of your company?
My company has been around for a while in the tabletop gaming industry. I pioneered the first e-book site for tabletop games in 2001 (http://www.RPGNow.com). We own 3 hobby game stores in the Milwaukee, Wisconsin area. About 4 years ago we started producing board games as Minion Games.
As a champion crowdfunder, what inspired you to leverage crowdfunding 7 times as a main source to fund your company?
It’s very costly to produce a board game and you are taking a wild guess at the desires and trends in the industry. We did this for our first round of games, some sold well and some didn’t. Our second year of games hit us hard and we had a lot of inventory costs and not enough sales. So for our third year we thought we’d use this new site/funding method called Kickstarter to make sure our products were in demand and to help offset the up front costs. Our projects did well for the time and helped pay the bills. In the last year though, Kickstarter has been paying for all the upfront costs of printing and selling more copies of games than I would without it.
In your opinion, had it not been for crowdfunding do you believe Minion Games would be as successful as it is today?
Definitely not. In fact, it probably saved our board game company. Kickstarter helped turn our company from seeing dept from any new games to having profits before even printing a game. Crowdfunding helps you gauge the demand for your product before you produce it and that helps get enough made and lowers the cost for everyone.
What has been your most successful Kickstarter campaign to date and why?
A game called Hegemonic that raised nearly $90,000 (January 2013) – while it’s a great game, that’s not the reason for it’s success. Our game The Manhattan Project is on many Best of 2012 lists yet it only raised $8,600 (in August 2011) which didn’t even pay for the print run. The reason? Social networking and proven track record.
How big of an impact would you say social media played in the overall success of your Kickstarter campaigns?
A huge impact as stated above. Without being a part of the community or having a large following of your own from a brand, you will not raise much money in crowdfunding.
Do you have any specific advice you’d like to share with fellow entrepreneurs who are looking to launch their first ever crowdfunding campaign?
I suggest they review the plethora of information on my blog site, but especially the entry “Kicking & Screaming”
But in short, the primary things are:
– Build a social network of followers BEFORE you ever start your campaign.
– Research your real costs and actual development issues before you start.
– Don’t dilute your profits with massive amounts of stretch goal incentives.
– Remember this is going to be a full-time job during the campaign
Statistically, it’s estimated that only 30% of crowdfunding campaigns are successful. In your opinion, what do you think the main reasons are for your campaigns having such a high success rate?
Initially, it was setting my funding goal as low as I could and communicating well with our backers and the community. Nowadays it’s because we have a good track record of producing good games using crowdfunding and many of our past backers tend to back our future games.
Since launching your first Kickstarter campaign, what significant changes (if any) have you noticed when it comes to the rapidly evolving crowdfunding industry?
Global and mainstream acceptance of the concept and thus the amount of new backers that brings to the show. More backers are joining the crowd as opposed to leaving.
Where do you see Minion Games 5 years from now, or where would you like to see it?
We hope to continue to make great games and doing so with revenue generated up front. I expect to be in a position of constantly having an active crowdfunding campaign throughout the whole year. In fact, I hope to do that much sooner than 5 years.
Up until now all of your crowdfunding campaigns have been donation based. What is your take (if any) on equity based crowdfunding & the JOBS act and how do you feel this may change the procedure in which people launch new campaigns?
While I keep an eye on this, I am in no way well versed on the subject. I do feel this cannot be any worse than playing the stock market and see no problem in the concept. Not everyone has the ability, time or social grace to hunt for investors. This will maybe level the playing field a bit and we’ll see some great new companies come from it. But, will those companies survive with management that might only consist of techies?