[Music]
hello everybody and welcome back to case
studies with the biz doc this week we’re
going into independent crowdfunding the
place you go when you’re trying to start
a business or is it really start or is
it maybe seed funding after you be able
to start something we’re going to go
take a look at this and we’re going to
walk through it the difference between
Kickstarter and IndieGoGo what I think
of it and more importantly this answers
a question has been coming up again and
again they’re saying hey how do i skip
funded who do i go talk to what should i
do this crowdfunding work well you know
what we’re going to take a look at some
of those questions here and I hope this
is helpful first we start out here
regardless of what you hear about this
you don’t do anything until you really
have a product and you’re going to spend
a lot of time thinking about it
Einstein once said as the amount of time
that spends characterizing a problem in
other words trying to figure things out
as the amount of time it spends
characterizing approaches zero the
amount of time that you will spend
figuring it out approaches infinity so
the less time you figure out the problem
the more time you’re just going to be
spending there spinning your wheels and
that is the case here oh there’s a lot
of we’ll start let’s start with a
negative the negative presses you’ll
read things from time to time that said
oh somebody put something up on
Kickstarter all these people invested
instead these guys were you know paying
for strip clubs trips to China other
unmentionable things and it basically
took everybody for their money
well you know what that’s kind of on
Kickstarter and that’s on you putting
the money in there’s a different
standard that’s on you if you want to be
one of the good investments there if you
know you think about IndieGoGo you think
about Kickstarter you say are they
competitors well we kind of are in the
crowdfunding space but they came from
two very different places
IndieGoGo started at the film history
you know independent films hey we want
to do an independent film and we do a
documentary on this noble topic or that
noble topic
and that was good stuff and then it
branched off into other types of things
whereas Kickstarter has really been
about technology startups the
traditional communities that you would
think about building a little business
with an idea both are a little different
nonetheless you don’t start here you
start bootstrapping taking a few bucks
on
your own that doesn’t have to be tens of
thousands it could be hundreds or a few
thousand but you take it used research
and you spend your time developing proof
of what can be there if it’s a coding
project you get together with somebody
can help you code and you put some
things together a few of your own bucks
you stand up a server as we say and you
get things in motion and at that point
you’ve reached some proof you’ve reached
a little bit of a milestone and you’ve
probably also discovered what things
will work what things won’t work and
you’re not kidding yourself last week we
covered throw nose go take a look at
that big story about somebody who I
think ended up under pressure fooling
themselves fooling everybody else and
then a nine billion dollar disaster so
here you come down and you have some
validation now you have validation in
hand again a little bit of software
you’ve got it working you know I think
this could do you’ve probably made
several adjustments now you’re ready to
refine that into a business presentation
about where you’re going from here
I’ve bootstrapped I’ve got some
validation this is what I have found out
now I do need twenty thirty thousand
dollars to go from here to here boom
that’s where I do believe crowdfunding
plays a great great role and I happen to
prefer Kickstarter over IndieGoGo if you
prefer IndieGoGo I’m not hating on
IndieGoGo I just think Kickstarter is a
better platform for starting a business
specifically if it’s a maybe a light
tech or a light product business not a
service business you know that’s where
their focus is they have a thirty five
percent success rate meaning that the
campaigns that run to fruition according
to STATS we’ve down about thirty five
percent but they are siloed it’s kind of
difficult to integrate with all social
media so you’re in a position where you
really have to be your own promoter and
frankly I think that’s what it should be
I think there should be some stress on
you to find validation before you step
into it and also some stress on you can
you really yourself pull together the
people that are going to support your
Kickstarter campaign because now you’re
validating your own passion your ability
to promote it
your ability to push it and if you do it
right and but and these are simple to be
common sense but focus focus focus you
know what it is you’re doing make a
campaign that’s under 30 days you’re not
out there forever you’re this is a very
sentiment of time and transparency is
gets a lot of attention from the micro
investors that are here in Kickstarter
what I mean by that is here’s my budget
here is my timeline here is the
validation I’ve got this is not a 3d
rendering of my product or my website or
whatever service you built or product
you built this is it and this is what we
found the good the bad the ugly to start
out with and that’s why I think $35,000
to go to the next you know the next
milestone it was really interesting a
friend of mine his daughter built a
board game around the popular Nancy Drew
series and for those of you that don’t
know Nancy Drew’s has been you know over
the years this kind of popularity has
gone up and down but it’s a female
character in a book that’s really great
for kids from like third to seventh
grade very intriguing there’s a lot of
strength to it in terms of solid
storyline and she made a board game that
was loosely around the Nancy Drew
detective and she put it all together
she built a little prototype and they
did a campaign and I happily supported
her because they said this you will get
one of the first games made if we get
this much money and we can make the
first hundred why said well that’s
pretty cool in other words if I gave at
least 200 bucks then I could get one of
those first hundred games so you’re
providing benefits to people that also
validate it that validates the $50
investor because they say well now wait
a minute I don’t want to put in two
hundred I will give this girl 50s I
think this is really interesting what
she’s doing and I want to support that
but I can see if I gave two hundred I’d
get a game that’s additional proof that
this is real so when you put it all
together you know validation and then
transparency and offering more
validation is that way to have a really
successful you know outcome you know you
move over and you look at IndieGoGo they
say they want about
seventeen and a half percent success
rate but I don’t think this is apples
and apples you know they say they’re
more flexible social and they come from
the film history you know arguably you
probably could do either one I just
think in my opinion my opinion only not
hating on them
I think Kickstarter is a better platform
so now you’ve gone from bootstrap early
validation now you have a successful
campaign and you got 40 50 thousand
dollars perhaps to work with and reach
that first milestone where do you go
next I’ll tell you where you go next
that leads to the traditional path so
many people say how do I make a perfect
business plan that I could get into a
venture capitalist and get money how do
I make that look right what should I do
and I’m like timeout timeout timeout you
don’t walk in with a piece of paper that
says I’ve never been part of a startup I
haven’t done anything yet I’m sitting
here at my Harvard class I’m ready to
drop out I want to build something
remember Facebook started when they were
basically making you know a face sharing
our hot-or-not assessment in a dorm room
and they built algorithms so before they
had me money they actually built
something so before you come back again
sending in comments with what do i do
how do I make a business plan and go
talk to venture capitalist when you
haven’t done anything yet
think about this venture capitalists
look for that early validation but more
importantly fifty-three percent of their
decision is based on the team now let me
tell you a little bit about this this is
2016 University Chicago Booth Business
School there a study was done on how to
venture capitalist make decisions and
they pulled a lot of data in there and
once you’ve done your crowdfunding
campaign now let’s go over the VC and
let’s go see if we can raise some real
money well they were looking at team
which means the people that you’re
together with are you credible people
that can pull it off
12% was products so 65% two-thirds of
the decision was do I like these people
and do they have a product that’s there
do I think they can pull it off you know
getting on the rocket and going forward
should I put a half a million dollars
into this now well they put ten
grande of their own five grand of their
own they raised 50 grand 30 grand 25
grand whatever it is on Kickstarter they
prove some things you know what I like
this team but it’s team so believe it or
not it’s team then you drop down to this
that people frequently forget about
there’s a lot you can read about it fit
with the VC if they’re investing in
green sciences and they’ve not done any
web-enabled mint that’s not the guys to
go talk to regardless of whether your
dad knew a guy sat with them on a plane
got a business card can reach out to
them just because they’re a venture
capitalist I have money doesn’t mean
they’re invest in your sector so this
may only be 15 but it’s a 13 but it’s a
huge knockout factor finally look up
market industry and Bismol will come
together that’s got nothing to do with
your team it’s going to do a product we
know it has everything to do with
research and time you spent proving
where you’re going to be selling this
and doing the research on it this all
feeds together and when I look at
pitches and let me look at your pitch
send it in the comments I’ll give you an
email address and I will look at your
pitch but I will look at it after you
can tell me two things how much time in
research or personal bootstrapped have
you spent even if it’s only 500 bucks
what evidence do you have that you think
it’s going to work if you’ll do that
I’ll look at your business plan I’m glad
to help this is where you’ll end up and
this is the the lens you’ll look through
at least according to the research from
University of Chicago in 2016 at booth
but I’ll tell you you know my experience
is that that’s absolutely correct that
early validation subtraction with the
product and a team that they look at are
these people able to pull it off do I
believe in these people structured focus
thinkers that are just giving it up for
their company and for the product we’re
trying to do with a lot of maniacal
focus on solving the problem they’re
talking about focus focus focus on the
market on the product quality everything
like that they’re not scattered we are
doing this I hope that was helpful
explaining how you can use crowdfunding
but what I think is a milestone that you
need to achieve first and my personal
preference on which crowdfunding that I
would choose and it would
Kickstarter so the pillow so thank you
very much for watching this week please
subscribe to value tainment the best
channel on the internet for
entrepreneurial content and how-to
videos until next time I’m Tom Mel’s
worth and I hope I let you better than I
found you oh wait wait wait wait wait
people want to know what’s coming up
what’s coming up is this it says we’re
going to gamble on the next topics and
what I mean by that is we’re going to
have Full Tilt Poker and I’m going to do
a deep dive on that one and then I’m
going to look at a comparison between
draftkings and FanDuel and what’s
happened with your sport gambling where
it is where it’s come from and where I
think it’s going so we will see you next
week [Music]
hello everybody and welcome back to case
studies with the biz doc this week we’re
going into independent crowdfunding the
place you go when you’re trying to start
a business or is it really start or is
it maybe seed funding after you be able
to start something we’re going to go
take a look at this and we’re going to
walk through it the difference between
Kickstarter and IndieGoGo what I think
of it and more importantly this answers
a question has been coming up again and
again they’re saying hey how do i skip
funded who do i go talk to what should i
do this crowdfunding work well you know
what we’re going to take a look at some
of those questions here and I hope this
is helpful first we start out here
regardless of what you hear about this
you don’t do anything until you really
have a product and you’re going to spend
a lot of time thinking about it
Einstein once said as the amount of time
that spends characterizing a problem in
other words trying to figure things out
as the amount of time it spends
characterizing approaches zero the
amount of time that you will spend
figuring it out approaches infinity so
the less time you figure out the problem
the more time you’re just going to be
spending there spinning your wheels and
that is the case here oh there’s a lot
of we’ll start let’s start with a
negative the negative presses you’ll
read things from time to time that said
oh somebody put something up on
Kickstarter all these people invested
instead these guys were you know paying
for strip clubs trips to China other
unmentionable things and it basically
took everybody for their money
well you know what that’s kind of on
Kickstarter and that’s on you putting
the money in there’s a different
standard that’s on you if you want to be
one of the good investments there if you
know you think about IndieGoGo you think
about Kickstarter you say are they
competitors well we kind of are in the
crowdfunding space but they came from
two very different places
IndieGoGo started at the film history
you know independent films hey we want
to do an independent film and we do a
documentary on this noble topic or that
noble topic
and that was good stuff and then it
branched off into other types of things
whereas Kickstarter has really been
about technology startups the
traditional communities that you would
think about building a little business
with an idea both are a little different
nonetheless you don’t start here you
start bootstrapping taking a few bucks
on
your own that doesn’t have to be tens of
thousands it could be hundreds or a few
thousand but you take it used research
and you spend your time developing proof
of what can be there if it’s a coding
project you get together with somebody
can help you code and you put some
things together a few of your own bucks
you stand up a server as we say and you
get things in motion and at that point
you’ve reached some proof you’ve reached
a little bit of a milestone and you’ve
probably also discovered what things
will work what things won’t work and
you’re not kidding yourself last week we
covered throw nose go take a look at
that big story about somebody who I
think ended up under pressure fooling
themselves fooling everybody else and
then a nine billion dollar disaster so
here you come down and you have some
validation now you have validation in
hand again a little bit of software
you’ve got it working you know I think
this could do you’ve probably made
several adjustments now you’re ready to
refine that into a business presentation
about where you’re going from here
I’ve bootstrapped I’ve got some
validation this is what I have found out
now I do need twenty thirty thousand
dollars to go from here to here boom
that’s where I do believe crowdfunding
plays a great great role and I happen to
prefer Kickstarter over IndieGoGo if you
prefer IndieGoGo I’m not hating on
IndieGoGo I just think Kickstarter is a
better platform for starting a business
specifically if it’s a maybe a light
tech or a light product business not a
service business you know that’s where
their focus is they have a thirty five
percent success rate meaning that the
campaigns that run to fruition according
to STATS we’ve down about thirty five
percent but they are siloed it’s kind of
difficult to integrate with all social
media so you’re in a position where you
really have to be your own promoter and
frankly I think that’s what it should be
I think there should be some stress on
you to find validation before you step
into it and also some stress on you can
you really yourself pull together the
people that are going to support your
Kickstarter campaign because now you’re
validating your own passion your ability
to promote it
your ability to push it and if you do it
right and but and these are simple to be
common sense but focus focus focus you
know what it is you’re doing make a
campaign that’s under 30 days you’re not
out there forever you’re this is a very
sentiment of time and transparency is
gets a lot of attention from the micro
investors that are here in Kickstarter
what I mean by that is here’s my budget
here is my timeline here is the
validation I’ve got this is not a 3d
rendering of my product or my website or
whatever service you built or product
you built this is it and this is what we
found the good the bad the ugly to start
out with and that’s why I think $35,000
to go to the next you know the next
milestone it was really interesting a
friend of mine his daughter built a
board game around the popular Nancy Drew
series and for those of you that don’t
know Nancy Drew’s has been you know over
the years this kind of popularity has
gone up and down but it’s a female
character in a book that’s really great
for kids from like third to seventh
grade very intriguing there’s a lot of
strength to it in terms of solid
storyline and she made a board game that
was loosely around the Nancy Drew
detective and she put it all together
she built a little prototype and they
did a campaign and I happily supported
her because they said this you will get
one of the first games made if we get
this much money and we can make the
first hundred why said well that’s
pretty cool in other words if I gave at
least 200 bucks then I could get one of
those first hundred games so you’re
providing benefits to people that also
validate it that validates the $50
investor because they say well now wait
a minute I don’t want to put in two
hundred I will give this girl 50s I
think this is really interesting what
she’s doing and I want to support that
but I can see if I gave two hundred I’d
get a game that’s additional proof that
this is real so when you put it all
together you know validation and then
transparency and offering more
validation is that way to have a really
successful you know outcome you know you
move over and you look at IndieGoGo they
say they want about
seventeen and a half percent success
rate but I don’t think this is apples
and apples you know they say they’re
more flexible social and they come from
the film history you know arguably you
probably could do either one I just
think in my opinion my opinion only not
hating on them
I think Kickstarter is a better platform
so now you’ve gone from bootstrap early
validation now you have a successful
campaign and you got 40 50 thousand
dollars perhaps to work with and reach
that first milestone where do you go
next I’ll tell you where you go next
that leads to the traditional path so
many people say how do I make a perfect
business plan that I could get into a
venture capitalist and get money how do
I make that look right what should I do
and I’m like timeout timeout timeout you
don’t walk in with a piece of paper that
says I’ve never been part of a startup I
haven’t done anything yet I’m sitting
here at my Harvard class I’m ready to
drop out I want to build something
remember Facebook started when they were
basically making you know a face sharing
our hot-or-not assessment in a dorm room
and they built algorithms so before they
had me money they actually built
something so before you come back again
sending in comments with what do i do
how do I make a business plan and go
talk to venture capitalist when you
haven’t done anything yet
think about this venture capitalists
look for that early validation but more
importantly fifty-three percent of their
decision is based on the team now let me
tell you a little bit about this this is
2016 University Chicago Booth Business
School there a study was done on how to
venture capitalist make decisions and
they pulled a lot of data in there and
once you’ve done your crowdfunding
campaign now let’s go over the VC and
let’s go see if we can raise some real
money well they were looking at team
which means the people that you’re
together with are you credible people
that can pull it off
12% was products so 65% two-thirds of
the decision was do I like these people
and do they have a product that’s there
do I think they can pull it off you know
getting on the rocket and going forward
should I put a half a million dollars
into this now well they put ten
grande of their own five grand of their
own they raised 50 grand 30 grand 25
grand whatever it is on Kickstarter they
prove some things you know what I like
this team but it’s team so believe it or
not it’s team then you drop down to this
that people frequently forget about
there’s a lot you can read about it fit
with the VC if they’re investing in
green sciences and they’ve not done any
web-enabled mint that’s not the guys to
go talk to regardless of whether your
dad knew a guy sat with them on a plane
got a business card can reach out to
them just because they’re a venture
capitalist I have money doesn’t mean
they’re invest in your sector so this
may only be 15 but it’s a 13 but it’s a
huge knockout factor finally look up
market industry and Bismol will come
together that’s got nothing to do with
your team it’s going to do a product we
know it has everything to do with
research and time you spent proving
where you’re going to be selling this
and doing the research on it this all
feeds together and when I look at
pitches and let me look at your pitch
send it in the comments I’ll give you an
email address and I will look at your
pitch but I will look at it after you
can tell me two things how much time in
research or personal bootstrapped have
you spent even if it’s only 500 bucks
what evidence do you have that you think
it’s going to work if you’ll do that
I’ll look at your business plan I’m glad
to help this is where you’ll end up and
this is the the lens you’ll look through
at least according to the research from
University of Chicago in 2016 at booth
but I’ll tell you you know my experience
is that that’s absolutely correct that
early validation subtraction with the
product and a team that they look at are
these people able to pull it off do I
believe in these people structured focus
thinkers that are just giving it up for
their company and for the product we’re
trying to do with a lot of maniacal
focus on solving the problem they’re
talking about focus focus focus on the
market on the product quality everything
like that they’re not scattered we are
doing this I hope that was helpful
explaining how you can use crowdfunding
but what I think is a milestone that you
need to achieve first and my personal
preference on which crowdfunding that I
would choose and it would
Kickstarter so the pillow so thank you
very much for watching this week please
subscribe to value tainment the best
channel on the internet for
entrepreneurial content and how-to
videos until next time I’m Tom Mel’s
worth and I hope I let you better than I
found you oh wait wait wait wait wait
people want to know what’s coming up
what’s coming up is this it says we’re
going to gamble on the next topics and
what I mean by that is we’re going to
have Full Tilt Poker and I’m going to do
a deep dive on that one and then I’m
going to look at a comparison between
draftkings and FanDuel and what’s
happened with your sport gambling where
it is where it’s come from and where I
think it’s going so we will see you next
week [Music]
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