191: How to Grow Your Crowdfunding Sales

00:00:00 Kevin Mako: Hello, product innovators. Today we learn from the co-founder of the largest crowdfunding agency in the world on how to grow your crowdfunding sales through digital marketing.

00:00:08 Narrator: You're listening to the product startup podcast, a show to learn from top leaders in product development, product development, and everything in between.

00:00:16 Narrator: Hosted by Kevin Mako, the leading expert on product development for physical product startups, sponsored

00:00:20 Narrator: by PTC's two best-in-class 3D CAD product development software solutions, Onshape

00:00:25 Narrator: , and Creo, and produced by Mako Design + Invent, the original firm providing world-class consumer,

00:00:30 Narrator: product development services tailored specifically to startups, small manufacturers, and inventors.

00:00:34 Kevin Mako: Welcome back, everyone. Today I'm very excited to introduce Mark Pecota to the show. Mark is the co-founder of LaunchBoom, the original and largest crowdfunding agency on Earth.

00:00:43 Kevin Mako: He is also the author of Crowdfunded, Amazon's top-selling book for over three years on the end-to-end process of crowdfunding.

00:00:50 Kevin Mako: And he is the host of the Crowdfunded Summit, which I have keynoted at a number of times and I'm back to talk there again this September 12th to 14th.

00:00:57 Kevin Mako: Today, Mark is going to share some valuable knowledge for inventors, startups, and small manufacturers on how sales growth happens before

00:01:02 Kevin Mako: and during a crowdfunding campaign for a new hardware product. What online advertising tools are

00:01:07 Kevin Mako: used to grow sales and best practices for ensuring you get the best return on ad spend in selling your new invention via Kickstarter or Indiegogo. Now, on to the episode.

00:01:18 Kevin Mako: Hey, Mark, welcome back to the show. Thanks, Kevin. Excited to be here again. Excited to have you on. Again, a lot has happened since the last time

00:01:25 Kevin Mako: we spoke. I know that the next crowdfunded summit's coming out and you guys have me keynoting there. Again,

00:01:30 Kevin Mako: That's coming, I think, September 12th to 14th, free tickets for anybody to check it out, crowdfunded summit.com, I believe, is the website. I'll put all the links below.

00:01:38 Kevin Mako: Also, you've got the second edition of the book in crowdfunding. And that's out, I guess people can buy it right now on Amazon as well as everything that's

00:01:46 Kevin Mako: happening with LaunchBoom. Correct. Yeah, all of the above is true. Yeah, exciting stuff. Yeah, lots of good things going on.

00:01:51 Kevin Mako: And today we want to talk about a subject that we haven't really dove deep into on prior episodes. We've talked about crowdfunding, especially through Kickstarter and Indiegogo.

00:02:00 Kevin Mako: go. And that is how do you actually grow the sales of your audience when you are live? So what do you actually do to get more eyeballs on your product?

00:02:09 Kevin Mako: And of course, most importantly, convert to more sales to your actual campaign itself.

00:02:13 Kevin Mako: All that comes down to advertising and what you're doing, of course, assuming you had a great launch to

00:02:18 Kevin Mako: begin with. Before we get into all of that, just give us a quick background for those that haven't listened

00:02:22 Kevin Mako: in our prior episodes with you on your background to how you became the big success

00:02:26 Mark Pecota: story in crowdfunding that you are today. Well, first off, thank you. Excited to be back. LaunchBoom, we started back in 2015.

00:02:33 Mark Pecota: And actually, if you go back a little bit before that, I will make this short. Don't worry.

00:02:37 Mark Pecota: 2013, so we're going back two years earlier. We had a digital marketing agency called Label Creative. We had really no focus in terms of what type of niche we were doing.

00:02:44 Mark Pecota: We're a whole bunch of college kids or just fresh out of college taking whatever we could. We got to work on a few crowdfunding campaigns, though. The first one did $78,000.

00:02:52 Mark Pecota: And the third one did $375,000. And after that third one, we're like, there is something here when it comes. comes to crowdfunding.

00:02:59 Mark Pecota: It's a very, very effective way for creators and entrepreneurs to be able to bring their product ideas to life.

00:03:05 Mark Pecota: And most important about it is that it is really a method of doing pre-orders. So creators only have to have a prototype and they can then drive a real revenue

00:03:13 Mark Pecota: for their product, take that revenue and then go manufacture their product. So it really reduces the risk. So we were all bought in on that in 2015.

00:03:20 Mark Pecota: That's when we rebranded the LaunchBoom. And then since that time, we've been focused on helping product creators turn the product ideas into into real businesses.

00:03:27 Mark Pecota: So that's launch.

00:03:28 Kevin Mako: through crowdfunding and then continuing to grow their businesses from there as well. That's amazing. Now, let's talk about what happens with selling product once you've launched a

00:03:36 Kevin Mako: campaign. Give us a little bit of a precursor to, first of all, how you get into the campaign.

00:03:41 Kevin Mako: What makes for a great launch of a campaign so that that leads into how we can actually scale

00:03:45 Mark Pecota: our audience and sell more products when we're in the campaign itself. Yeah, so I'd say that probably the biggest mistake that people make or like the biggest myth about

00:03:52 Mark Pecota: crowdfunding websites. And you already mentioned this, but I'll say it again. When we say

00:03:56 Mark Pecota: crowdfunding, we're talking about Kickstarter and Indiegogo as being the primary platforms to launch on.

00:04:01 Mark Pecota: But the biggest myth that people will have or that's out there is that you can just put your product on these sites and then you're going to make sales.

00:04:07 Mark Pecota: You're going to get customers. And people think that because there are tens of millions of visitors on these websites. Kickstarter and Indiegogo both have

00:04:14 Mark Pecota: active communities of people that want to buy cool, innovative, unique products. But the thing is that

00:04:20 Mark Pecota: just like any marketplace, so to speak, like Amazon, let's just look at Amazon, even though that's much, much, much bigger.

00:04:26 Mark Pecota: If you compare it to Amazon, you can't just put a product up there and expect everyone to have eyeballs on it, right? There's a whole strategy in terms of getting

00:04:33 Mark Pecota: yourself higher up in the rankings, and so you can get visibility on these platforms. Well,

00:04:38 Mark Pecota: this is essentially true for Kickstarter and Indiegogo as well, where you need to do work in the pre-launch in order to build up an audience actually before you launch.

00:04:47 Mark Pecota: And from an high level, how we would recommend doing that is using advertising to then build up an email list and then using that email

00:04:54 Mark Pecota: list once it's big enough to launch your campaign and then to get funded very quickly, which we call having a LaunchBoom.

00:05:01 Mark Pecota: That is like, again, from a very high level, how it works in the most important part is you start at the beginning, get the pre-launch right. If you do that right,

00:05:07 Mark Pecota: you're going to have a big launch. And then I know for the rest of this podcast, we'll talk more about tactics to continue funding going.

00:05:12 Kevin Mako: I think that gets a pretty good idea of at least the basics of what's most important for launching. That's perfect. So critical. Do a great launch and then use advertising in

00:05:20 Kevin Mako: in order to ensure that, A, that's a great launch, and B, that you continue to scale. Now, let's drill down on it.

00:05:25 Mark Pecota: What is advertised of a crowdfunding campaign specifically? How do you actually do that? In advertising, whether it be in the pre-launch or the launch, the main platform that's

00:05:34 Mark Pecota: used is Facebook or meta. This has been true since when we did our first campaign back in 2013 to today.

00:05:40 Mark Pecota: And people may be listening to this and being like, oh, man, these guys are so old school. What about TikTok? There's definitely something to TikTok. Don't get me wrong.

00:05:47 Mark Pecota: I would say especially look at organic TikTok, where it's our… organic in general, there is a strategy there that can work.

00:05:53 Mark Pecota: But in terms of being able to drive consistent, high quality, scalable traffic for lead generation and for driving sales as well during the live campaign, we

00:06:02 Mark Pecota: still haven't found a better platform than Facebook. Facebook ads is the most important piece.

00:06:06 Mark Pecota: I mean, if you're looking at pre-launch, of course, the objective is different than when you're looking at a live campaign. And it's very simple.

00:06:13 Mark Pecota: When you're in pre-launch, the main objective as a creator is that you are trying to build a highly qualified email list. And when I say highly qualified email list.

00:06:21 Mark Pecota: I mean the likelihood that someone is to buy or like a very high likelihood that

00:06:25 Mark Pecota: they're going to buy. And then once you get to the live campaign, it's pretty simple. You're just trying

00:06:28 Kevin Mako: to get people to buy. But it all comes down mainly to Facebook ads is what we've seen being the most effective channel.

00:06:34 Kevin Mako: Much appreciated. Especially with your insight, you've seen all these different platforms. You've A-B tested this countless times and you know what works. So let's drill into this

00:06:43 Kevin Mako: even deeper. It's going to be the theme of this podcast. Continue to go more and more down the rabbit hole here. Let's talk specifically about Facebook ads.

00:06:51 Mark Pecota: What is a Facebook ad and what makes for a great Facebook ad, especially for a hardware product? I mean, you can kind of break down a Facebook ad into two parts.

00:07:00 Mark Pecota: One is the audience that you're targeting. And two would be, let's call it the creative or the ad itself.

00:07:07 Mark Pecota: Starting with an audience, these are the people that you are targeting on Facebook. How Facebook mainly works when it comes to audience targeting is it's mainly a collection of

00:07:15 Mark Pecota: interests, which is love it or hate it. Facebook knows a lot about you. They know a lot about the things that you like.

00:07:21 Mark Pecota: This is why it's such a powerful platform when it comes to advertising. You can quite literally go in when you're creating an audience besides doing demographic information,

00:07:29 Mark Pecota: like I want to target people ages 25 to 55 males in this location. The most important piece are the interests.

00:07:35 Mark Pecota: So let's say for doing a target, it's like e-bike product or something, a e-bike hardware product. You can go into Facebook and you can target e-bikes, actually.

00:07:43 Mark Pecota: And then Facebook, this is actually a cool, if you have not used Facebook before, this is a cool tip to know, that Facebook actually gives you suggestions.

00:07:51 Mark Pecota: So you can start by saying, hey, I want to target e-bikes, or maybe there's some big e-bike magazines or media publications. And you'll put those in in Facebook.

00:07:59 Mark Pecota: And then Facebook will actually give you suggestions. So you can start to build your audience using a little bit of your intuition and your knowledge, not just intuition,

00:08:05 Mark Pecota: but your knowledge of this space to then build an audience of interests that you can then target.

00:08:11 Mark Pecota: Usually for most people, if you're like a huge brand, you're going to be spending hundreds of thousands of

00:08:15 Mark Pecota: right like you're going to have maybe dozens of audiences that you're targeting but for most people

00:08:20 Mark Pecota: the amount of audiences that you're targeting might be three to five for a campaign so this isn't

00:08:24 Mark Pecota: I want to say that because this isn't something that is incredibly complex it's usually a low amount of

00:08:29 Mark Pecota: audiences that you're going to end up testing and you're going to find a few that are scaling I

00:08:34 Mark Pecota: zoomed in a little bit on the audience will come back a little bit so audience is one piece the second piece

00:08:38 Mark Pecota: is the ad itself and the ad itself is really made up of two parts you have the creative so that could be the photo or the video, generally speaking, that is shown.

00:08:47 Mark Pecota: And that is the most important piece of the ad, I would say, because it's what's really going to capture your attention. I mean, when you

00:08:53 Mark Pecota: think about, we like to think about like, how can you make your ad scroll stopping? If you're on Instagram, right, you're going up with your thumb.

00:08:58 Mark Pecota: What's going to make you stop scrolling and look at this thing? It's going to be whatever that imagery might be, whether it be a photo or a video. Okay, so that's

00:09:05 Mark Pecota: one piece of it. And then the copy is the other piece. So the copy that's associated with it. And that's also very important. I don't want to downplay the importance of that.

00:09:12 Mark Pecota: But it is, it is actually secondary for us in terms of what we're going to test first. You know, we do have a systematic way that we would recommend testing ads.

00:09:19 Mark Pecota: And we are going to be testing the actual creative first to figure out which creative is actually leading to the best results.

00:09:25 Mark Pecota: There you have it. Audiences, the ad itself is really how to break down

00:09:30 Kevin Mako: making a good Facebook ad. That's so powerful, especially to hardware startups, because typically, especially as a hardware startup, you have a niche product.

00:09:37 Kevin Mako: You're solving some sort of very hyper-focused need or opportunity for somebody. And you can

00:09:43 Kevin Mako: focus precisely on that category within Facebook, which also makes the ads cheaper. It makes the exposure better because it is so targeted.

00:09:51 Kevin Mako: You're getting in front of the key eyeballs that more than likely would be interested in what

00:09:55 Kevin Mako: you have to offer, as opposed to brands, as you mentioned, which is really just targeting everybody.

00:09:59 Kevin Mako: So if you can target more specifically, then it becomes less competitive for those very specific

00:10:04 Kevin Mako: targets and allows you to really capture your particular buyers within the product that's a perfect fit for them, really.

00:10:11 Mark Pecota: And that's the power of this audience. specifications via the meta platform. Yeah, I would say just on there, I mean, sometimes it might be cheaper.

00:10:18 Mark Pecota: Sometimes it actually might be more expensive if you go like two niche. So one of the powerful parts about Facebook is that it's very smart in terms of how they actually

00:10:26 Mark Pecota: optimize the ads for you. So one important piece that I left out is that when it comes to ads, you tell Facebook an objective.

00:10:33 Mark Pecota: Let's say that your objective is to acquire a lead or an email or your objective is to acquire a purchase, probably two of the most common ones.

00:10:40 Mark Pecota: And I would recommend making your objectives in your ads, tied to something that is more valuable, like a lead or a purchase, you can do things where you

00:10:48 Mark Pecota: optimize for clicks or like the reach of the ad, like these more awareness -based campaigns, which if you're small, you're definitely not wanting to do that.

00:10:55 Mark Pecota: You want to base off results. So anyways, you give Facebook this objective and then you give it this audience to target with your ad creative.

00:11:02 Mark Pecota: And now it's going to optimize the ads automatically based off of people that they believe

00:11:08 Mark Pecota: will most likely complete that objective, which is kind of, it's kind of a crazy problem.

00:11:13 Mark Pecota: I have no idea how that works in terms of how they're solving that, but they do. And they do a really good job of it overall.

00:11:20 Mark Pecota: So sometimes you can make your audience maybe even a little bit more broad where it's like e-bike. I'm just going to go with the e-bike example, like e-bike in general.

00:11:29 Mark Pecota: And this could be an audience in the tens of millions. But then you lit Facebook do its magic, so to speak, let the algorithm work and start to optimize the ads.

00:11:38 Mark Pecota: And sometimes that can work

00:11:39 Kevin Mako: actually quite well instead of making it too too niche. Well, that's helpful. especially for startups, because you don't have to focus on perfecting every single little detail of

00:11:48 Kevin Mako: all the elements of advertising. Facebook is essentially making it easier for you. They're trying to help

00:11:52 Kevin Mako: you. They're trying to get the ads in front of the people that actually matter to you. And if you think about it from their perspective, from meta's perspective, it makes a lot of

00:11:59 Kevin Mako: sense because the more results that they can prove for you as an advertiser, the more likely you're going to increase your ad spend.

00:12:06 Kevin Mako: So their objective completely is aligned with you in terms of long-term partnership values in terms of scaling up that campaign.

00:12:13 Kevin Mako: especially true if they can show, you know, very clear ROI on these purchase intent based

00:12:17 Kevin Mako: situations as you would be doing if you're on a crowdfunding campaign so that you can continue to crank up those sales.

00:12:24 Kevin Mako: You're spending more, but you're earning even more back. And that's what you should be looking at in terms of return on ad spend. Now, in order to optimize return on ad spend,

00:12:31 Kevin Mako: you highlighted a bit there, Mark.

00:12:33 Mark Pecota: Talk a bit about the concept of AB testing. So the concept of test, I mean, at the most basic level, it's like you're running an experiment between two

00:12:43 Mark Pecota: variables and or you have a hypothesis and then you have variables that you're testing to see which one is going to prove or disprove your hypothesis.

00:12:52 Mark Pecota: And I mean, the main idea of a really simple term, let's say that you have two ads that you're putting up against each other. You want to

00:12:57 Mark Pecota: make sure that you're limiting the amount of variables. So things that you're changing. So let's say that you have two ads.

00:13:02 Mark Pecota: They're identical in terms of the creative and the copy on them. The only thing that's

00:13:07 Mark Pecota: different are the audiences that you're targeting maybe one in the e-bike example you're targeting e

00:13:11 Mark Pecota: -bike publications or something and then in another one you're targeting electric vehicles because sometimes people that are interested in electric vehicles may be interested in

00:13:20 Mark Pecota: e-bikes so you have these two audiences and now you want to see which one actually leads to a

00:13:24 Mark Pecota: better result which depending on what your objective may be remember it probably be you know you're

00:13:29 Mark Pecota: getting leads or getting purchases will tell you what's the cost to acquire a lead or what's the cost to acquire a customer and that will inform so that's one form of ab testing

00:13:37 Mark Pecota: But, you know, we would recommend testing. I mean, the two main places that you're going to test are going to be in your ads and then in the landing page itself.

00:13:43 Mark Pecota: Now, when it comes to a crowdfunding campaign, you can't test once you're live on Kickstarter or Indiegogo, like the actual campaign pages. They don't have that functionality.

00:13:51 Mark Pecota: Of course, you can test the ads because you control that. During the pre-launch, you can test your landing pages as well. I would recommend that.

00:13:56 Kevin Mako: So testing things like your headlines, your images that are on your landing pages and seeing which ones lead to more.

00:14:01 Kevin Mako: The beauty of this is as you do more and more of these AB tests, the algorithms are both going to help push them. as best as possible to get the desired result that you want.

00:14:10 Kevin Mako: But as you compare all these together, you're going to continue essentially getting a better and better return on ad spend.

00:14:15 Kevin Mako: So ensuring that you're getting more revenue for every dollar of advertising that you spend. Now, I want to use a bit of time from the podcast here to talk about the new

00:14:23 Kevin Mako: release of the book coming up.

00:14:25 Mark Pecota: Give us some highlights about what's going on there and where people can buy it. Yeah, for sure. So first off,

00:14:29 Mark Pecota: you had the first edition of crowdfunded I published about three and a half years ago. That kind of sounds crazy to say. It was right when the pandemic started.

00:14:37 Mark Pecota: And I was kind of worried I honestly putting out, like, man, are people going to want this thing? Because no one knew anything what was happening at the beginning.

00:14:43 Mark Pecota: But of course, people had a lot of time on their hands. So everyone was reading it. But now, it's been really, really well received.

00:14:47 Mark Pecota: It's actually over the past three years is consistently the best selling book on crowdfunding on Amazon. So very proud of that.

00:14:53 Mark Pecota: But after three years, you know, that's a long time, right? And they needed an update. So I spent, whole, it's funny.

00:14:59 Mark Pecota: Because at the beginning of the year, I'm like, I'm going to update this book. I'm going to, you know, sprint for three months and get this thing.

00:15:04 Mark Pecota: And look at it, it's eight months later. Everything takes longer than you think. Right. So I spent a long time updating this book.

00:15:10 Mark Pecota: In three years, a lot of things that changed in terms of our systems that are improving at LaunchBoom, had a lot more experience working with different product categories as well.

00:15:17 Mark Pecota: I wanted to update the book in terms of our entire system and making sure that is just more up to date. And so what that actually translates into is almost 100 extra

00:15:26 Mark Pecota: pages. And I mean, quite literally every part of the book is updated. And this time, we also got pat my own back.

00:15:33 Mark Pecota: We got endorsements from CEO of Kickstarter and Indiegogo as well. So both of them are fans of the book. So go check it out. I mean, I'll be perfectly honest with everyone.

00:15:42 Mark Pecota: I'm not trying to make money off the book. I actually, I wish I could show you a screenshot, but the book is priced at $8.71 for the print

00:15:50 Mark Pecota: version, which means I literally make $0 in royalty. The whole idea is for people to get the book as cheaply as possible and learn. I'll be very honest about this.

00:15:59 Mark Pecota: If you launch yourself, awesome, you know? And then also if you read the book and you're like, wow, LaunchBoom looks like someone that we might want to work with, awesome as well.

00:16:06 Mark Pecota: So it's kind of a win-win for any scenario. So just trying to get it out there. But I think there's a lot of good information.

00:16:13 Kevin Mako: And if you're interested, just go check it out. You can go to Amazon and type in crowdfunded and it will pop up.

00:16:17 Kevin Mako: And as always, I'll put the links in the show notes below for anyone who wants to click through as well as the links to the crowdfunded summit that's coming up.

00:16:25 Mark Pecota: Talk a bit about that coming up in September. So the summit, it's coming up soon. September 12th, it's coming next crowdfunded summit.

00:16:32 Mark Pecota: So this is something that we've also been doing for years now.

00:16:35 Kevin Mako: And Kevin, you've joined us for multiple of them. So we're very excited to have you back as well. I appreciate you having me on the show. It's always a great time.

00:16:42 Mark Pecota: Amazing panels, too. Amazing guests, keynotes. And it's free. It's incredible that you guys do that. Thank you. Yeah, yeah. And we're excited.

00:16:48 Mark Pecota: I mean, the whole idea behind the crowdfunded summit, just like all of our education from the book to anything else we do, is that we're trying to bring the best content,

00:16:55 Mark Pecota: the biggest experts in the space in one place. It's here on top of having Kevin coming back to speak. We also have the CEO of Kickstarter,

00:17:02 Mark Pecota: Everett Taylor and the CEO of Indigogogo as well. Becky Center, also giving keynotes along with dozens of other speakers, and it's three days

00:17:09 Mark Pecota: of content. So too much to talk about right now. But yeah, go check it out. If you guys are interested, it's free to sign up.

00:17:14 Mark Pecota: And there is a VIP tier, but you can get all the best content. We're not holding back. You know, you're going to get everything on the free tier. The VIP just gives

00:17:21 Mark Pecota: you a few extras in terms of recordings.

00:17:23 Kevin Mako: And there's a whole extra workshop as well as you get access to but all the details are on the site. Go check it out. Looking forward to it. Mark, thanks again for

00:17:30 Kevin Mako: being on the show, all your words of wisdom, in and around crowdfunding and how you scale up,

00:17:34 Kevin Mako: how you use ads, AB testing, best practices to get the best return on ad spend so you can continue to scale and grow your campaign both before the actual crowdfunding campaign.

00:17:43 Kevin Mako: And as you actually launch and throughout the launch of that, to get the most amount of sales that you can when a new hardware start launches a product.

00:17:49 Kevin Mako: So thanks again for being on the show.

00:17:51 Mark Pecota: And we'll see you coming up. If not before then, we'll see you at the crowdfunded summit in September.

00:17:55 Kevin Mako: Thanks so much for having me on, Kevin. Always a lot of fun and can't wait to see you at the summit along with everyone.

00:18:00 Narrator: listening. Thanks, Mark. Appreciate it. Thanks for tuning in to this episode of the Product Startup Podcast.

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00:18:12 Narrator: free to reach out to us anytime at our email, podcast at MakoDesign.com. That's podcast at MakoDesign.com. This show is hosted by Kevin Mako.

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00:18:36 Narrator: specifically to startups small manufacturers and inventors thanks for joining and see you next time