Interview with Alicia Wu
Alicia represents Indiegogo in China. She supports brand-, and business development and helps to create strong campaigns and successful product launches.
Although Indiegogo is an established, 10 years old platform, it is brand new in China. Indiegogo’s goal is to create a bridge between Chinese companies and overseas markets and doing so through lots of events, cooperation with Facebook, Google, and other organizations to connect people, raise brand awareness, and build a reputation. In the past 2 years, Indiegogo worked with over 2,000 Chinese companies, arranged over 500 successful projects and raised over 1 billion USD.
We are asking Alicia how China-specific crowdfunding works, and how to get started:
1. What crowdfunding offers to inventors and creators?
* Money: you can get money from backers in exchange for your working prototype. This process provides enough money for manufacturing.
* Distribution opportunities: through extensive networks you can find distribution opportunities around the world.
* Branding and brand awareness because we also help to build and sell stories. Through the stories, values, and the brand, the community wants to connect with the creators. Through Indiegogo the creators are able to collect information about their buyers directly. Once the campaign is completed these backers can be invited to join a community, visit a website, or webshop while other channels would never share customer information.
* We help with market validation: give you all the backers’ information, and through Google Analytics you see who your customers are and how is their purchasing behavior. What you have is a real and trustworthy market validation data, and that can help to find further investors in the future.
2. Who joins Indiegogo?
* Startup companies: anyone and everyone with exciting, new product development ideas.
* Top China companies without Western experience. They want to go overseas but don’t have experience or connection. These established Chinese companies are after brand awareness, branding, distribution, market reaction, and feedback.
* Traditional factories: trying to build up their own brands. We have worked with a couple of factories already and had done some pretty successful campaigns.
3. Mostly what type of products sign up for crowdfunding?
This is very specific because for China market we target two groups:
* Consumer electronic products
* Design product (including fashion such as clothes, shoes, bags, etc. accessories,)
These goods get direct support from the China team while any other product can still participate through the main website.
4. What support do you offer in China?
* When Chinese companies or individuals don’t have experience on the overseas market, we help them to evaluate and position their product, and also to place it overseas.
* If they don’t have people to build up a western campaign, we can also help with that. If Indiegogo thinks that the product is excellent, before the launch, we provide internal traffic support, and we promote the idea.
* We offer learning materials, events to teach how to build successful campaigns, and how to make everything better.
5. What are the essentials of crowdfunding?
* First and foremost what we require is a working prototype that has all the functions identical to the final version.
* Registration on the website at www.indiegogo.com or via Wechat.
* We evaluate the projects and offer recommendations on how to improve it to fit better as a crowdfunding campaign.
* The website is a good place to start finding resources about crowdfunding. It is important that inventors take the time to learn the details and understand what is expected of them. This is for the sake of a successful campaign and also not to waste their time or money.
6. What are the stages of the campaign?
Once the prototype has been approved, the pre-campaign starts 3–4 months before the campaign goes live. The pre-campaign includes the following steps:
1. Market research
2. Set up a strategy for the campaign
3. Create a video
4. Online promotion to target potential backers If the product does well, Indiegogo further promotes the brands to get more exposure.
7. How much money is needed to set up a crowdfunding campaign?
* The only set fee is the platform fee which is 8% of the total cost.
* The actual campaign lasts between 30–60 days depending on the creator and of course how much money is needed to complete the campaign successfully. However, the longer you run your online ads, the more money you have to spend. If the ads do well, it is worth doing longer. If the ads are not doing great, worth considering a shorter campaign or adjusting the ads.
* For ads only we recommend 10–15% of the total amount.
* PR depends on who you work with it, what you do, and how unique your product is going to be.
* For high-quality video production, you need approximately 25,000 USD. If you want to hire an agency to cover the whole campaign there is no average price, it all depends on the agency and your requirements.
8. How to create a really great campaign:
* Make your product stand out from the market and the competitors.
* Set your target properly.
* Have a marketing budget to run online ads to drive traffic to your campaign.
* Leave enough time to do your pre-launch campaign and preparation.
* Create a good selling strategy.
* You need to do PR, especially for new brands. Target influencers and media, write blogs and articles and show people that your product is as good as you say.
* You need a really good EDM: materials and email content to support your launch.
* All marketing materials from a video, a page, to copywriting has to be coordinated well and in high quality. Everything has to work together and represent a successful brand.
9. When and how creators get the money?
After the deduction of the 8% platform fee (5% for Indiegogo plus 3% bank fee)
the rest, 92% is sent to the campaigners after 15 days.
10. What are some of the mistakes people make?
* People receive money and don’t ship — Indiegogo doesn’t allow that, and we prevent it by requiring the participants to commit to very regular updates of the process from prototyping to shipping the product to the backers.
* A campaigner who didn’t ship at least 80% of the first campaign cannot start the second campaign.
* The campaign gets automatically shut down if Indiegogo finds that the creator sells the product on other online channels (such as Amazon) during the campaign. The product has to be something that has never been sold online or offline before.
* The crowdfunding price has to be the lowest price, cannot launch a campaign with 100USD price and start selling for under 100USD. The backers’ loyalty and support must be appreciated by giving them the best price.
* You cannot launch the product on your own website before the end of the campaign. The backers have to have first access and receive the first products.
- *Alicia is an expert in crowdfunding, brand strategy, new product development, and market expansion. **