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Crowdfunding Campaign – Lessons Learned

Last June, VersionPress went through a crowd-funding campaign and it was a very interesting experience. I've long wanted to blog about it because I believe that crowd-funding is a great option for WordPress plugin developers and software projects in general. There have been some external analyses of our campaign, most notably this one on WP Tavern, but there's nothing quite like going through it all yourself. I'd like to share my personal experience and add some data from the campaign to the mix.

Basic facts

  • Our campaign ran from 10th to 30th June 2014
  • The goal was $30,000
  • We raised about $13,500

Looking at these numbers alone it seems that the campaign was not successful but it's hard to see it that way after spending the last few months working hard on VersionPress 🙂 What I've learnt is that it's tricky to judge the campaign only by looking at the numbers. For example, there has been a campaign for Pods Framework 2.0 back in 2011, receiving almost 300% of the funding asked, but in this “Crowd-funding Roudtable” podcast episode you can hear how things were much more complicated for the framework author. (By the way, that episode is one of the best resources on crowd-funding in the world of WordPress, I highly recommend it if this topic interests you.) There have even been projects on Kickstarter that raised hundreds of thousands of dollars and still “failed” in that they failed to deliver what they promised or didn't turn into a successful business.

So I just don't think that looking at the numbers alone tells too much about the campaign; any campaign. On the other hand it is a simple metric and many people focus on it so I'd like to add two comments if you plan to become a project author:

  1. Always ask for more rather than less. This sounds kind of obvious but many people make the mistake of setting the goal too low. Remember that you will underestimate the costs of development, delivery etc.
  2. Do not do it for the money alone. The amazing thing about crowd-funding is that it does so much more for the project: it validates the idea, generates interest, gathers feedback, connects with the media, etc. In our case, all this was at least as important as the financial support we got.

Let's now go through some of the more interesting aspects of the campaign:

Preparing the campaign is a LOT of work

One thing that is usually not apparent from the outside is how much work there is on the campaign itself. In our case, the website took over 250 commits and hundreds of hours to get prepared. And it was a seemingly simple, single-page site! This was partly related to the fact that the campaign was self-hosted (more on that below) but still, some tasks just can't be skipped. For example, writing a copy alone is a huge task should it be any good, and easily takes weeks of effort. There are more things like that so be prepared to spend considerable amount of time and effort on the campaign page.

Hosted vs. self-hosted

For every crowd-funding campaign, there is one major decision to be made – how to host it. There are two main options:

  1. Platform like Kickstarter or Indiegogo
  2. Self-hosted

There are strong pros and cons to both alternatives:

Crowdfunding platform Self-hosted
+ Well-known, trusted + Complete control
+ Technical things sorted + “Cheaper”
– Less freedom for owners (rules, design, branding etc.) – The issue of trust
– Fees (commissions) – Much more technical work

In our case, we strongly felt the impact of both the advantages and the disadvantages. For instance, we weren't (and still quite aren't) well known in the WordPress community so just asking for money on a self-hosted site somewhere on the internet was a risky thing to do. On the other hand, self-hosting gave us the flexibility to reach out to our backers at the campaign end and ask them whether they would still want to support the project despite not reaching the original goal (almost all did). We would simply not have this option on some of the crowd-funding platforms.

Having said that, we would be on Kickstarter if we could. It's just so well-known that the advantages outweigh the disadvantages, and many people would be much more comfortable with our project. Unfortunately, Czech Republic is not one of the supported countries for Kickstarter project authors so we needed to find another way, and self-hosting worked reasonably well for us.

Running the campaign (a.k.a. “the no sleep period”)

So there was the campaign prepared, and now was the time to run it. It was my first experience of this sort and I probably didn't have more intense couple of weeks in my work life.

It's because the world is huge. While you as a project owner are a single dot on a map, there is the whole world out there, in different time zones, with a high chance that at any given moment someone is writing a message, a question, piece of feedback or generally something to you. It is of course great when a project attracts enough interest that this happens at all but not everything will be enthusiastic feedback and there will challenging times when you'll need to make decisions quickly, under pressure and with a lot less sleep that the body would like. But it was an interesting couple of weeks, that's for sure, and I guess that just prepares you for what running a business will be like 🙂

Mistakes / unpleasant surprises

There were two clear mistakes we made:

  1. The campaign was too short
  2. We underestimated the licensing

Our campaign lasted just three weeks which had some legal / accounting reasons behind it but it was just too short. The main problem is that people generally assume campaigns last longer so when they see there is less than three weeks to go and the campaign is only 10% funded they immediately think there is some kind of problem even if there might not be.

The other thing was the licensing issue. It is a pretty simple question in the WordPress ecosystem (yes, you want to be full GPL), it was just something that we didn't put enough thought into. And although it was sorted out rather quickly it was an unnecessary hiccup.

By the way, it was interesting to see what the GPL announcement did to the actual contributions. We were told how the GPL was important and that it would bring us many more supporters but in actuality it didn't have any measurable effect. During the whole campaign, the only factor that strongly correlated with the contributed sum was the number of visitors on the versionpress.net website.

Then there were some unpleasant surprises that I don't really think we caused in any way, they just happened. For example, a major magazine wrote about us and forgot to add a link (they added it a few days later, when most of the readers were already gone). Things like that happened and I guess you cannot have best of luck all the time.

Pleasant surprises

There were also many pleasant surprises, or things that went generally better than expected:

  • Many important magazines / blogs noticed us and wrote about us. What was nice is that their interest was genuine – they didn't want to write “sponsored reviews” or anything like that, they simply liked the idea.
  • We got a pretty good conversion ratio for every visitor of our site. Every single visit earned us about half a dollar which I find amazingly good, given that many clicks were just “random” visitors from Hackers News etc.
  • By the way, we made it to Hacker News homepage for a couple of hours on Tuesday 17th. A picture is really worth thousands of words here:

hacker-news-peak

Wrapping up

If anything, crowd-funding campaign has been an extremely interesting experience and valuable thing for VersionPress. I personally like this funding model because it is simple. Sure, it's a lot of work but the alternatives are even more involved. Crowd-funding is a straightforward deal between you and the community members, and if the community is large enough and the project is interesting enough both sides can only benefit from it.

Having said that, WordPress, specifically, is a challenging market to be on, in my opinion. What we have learnt is that while the global WordPress community is large (millions and millions of users), the core community is possibly much smaller and harder to get to. We also faced our own challenges, like not being able to be on Kickstarter and therefore not having people's trust from the beginning.

However, I still think that the crowd-funding campaign was one of the best ways, if not the best way, to start the project. It was an awesome experience and it truly “kick-started” VersionPress. What more could have we hoped for?

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