Using crowdfunding to validate demand

There is a good post up today on Segment.io describing how they used Kickstarter as a lean startup tool to validate demand. First the background:

Kickstarter is the perfect way to validate an idea. By definition, a successful Kickstarter campaign has a ton of people who’ve already put their money where their mouth is.

It’s really similar to the popular suggestion of “throwing up a fake landing page” and letting people sign up, or to the strategy of running AdWords before you have a product. Except Kickstarter is even better because you gain a devoted following and the funding you need to pursue your idea all at once

Segment.io’s Kickstarter campaign was for a Python web development course. That’s great, but Kickstarter is especially powerful for hardware startups where production costs are higher and cashflow more of an issue.

But there is more to running a Kickstarter campaign than making a nice video and watching the pledges roll in. You need to hustle:

That’s where my next tip comes in: hustle as much traffic to the site as humanly possible (believe me, you need all the manpower you can find). I hired a virtual assistant from Zirtual named Shea, and she was amazing. She literally doubled my marketing reach!

Together, we worked daily to hit all of the low-hanging marketing opportunities we could find. Here’s an incomplete list of some of the techniques we used:

Day 1 – We lined up tweets from web2py.com and PythonAnywhere.com as well as an email blast from original Real Python course mailing list.
Day 3 – We combed through and responded to Python-related questions on Quora and posts on Reddit.
Day 8–9 – We sent out a guest blog post to lots of different, Python-related blogs.
Day 16 – Our campaign made the front page of Hacker News, driving tons of traffic and resulting in lots of pledges.
Day 24–26 – Pledges remained high after we got another round of tweets from web2py.com, PythonAnywhere.com, Gun.io, PythonforBeginners.com, and another email blast from Real Python. Not to mention the longer-tail traffic from Hacker News hadn’t subsided yet.
Day 27–28 – We did another large push on StackOverflow, Quora and Reddit.
Day 30 – We got a tweet from Heroku, and finally finished our campaign having raised $26,044. It was a good day.

You can see from their graph of pledges per day below shows that they were bringing money in for the whole 30 days of their Kickstarter campaign, implying that promotional activity through the campaign had an impact.

Finally, in a neat twist, when the campaign became over-subscribed they introduced stretch goals to validate demand for new features – saying they would add Flask, video, and Django to the course if they reached $10k, $15k, and $20k in pledges.