19: Profiting from the Kickstarter Algorithm

Zach Smith: (00:00) Funded today nation. Welcome back to get Funded Today the Funded Today Podcast. Last time we answered a very important question that could be the difference between raising just a few thousand bucks, maybe nothing on the other side of the spectrum hundreds of thousands of dollars or more Kickstarter versus Indiegogo which platform should you choose or as Thomas mentioned in that episode should you even go with Crowdfunding go back and listen to it if you're still debating as this one’s going to be imperative to your success. Now today, we are going to show you how you can capitalize on Kickstarter’s more powerful tool perhaps their most powerful tool the Kickstarter Algorithm.

Announcer: (00:41) The Funded Today Podcast is hosted by World Renowned Entrepreneurs and Business Experts Thomas Alvord and Zach Smith. To get a help with your next big business idea or to take your business to the next level go to fundedtoday.com.

Zach Smith: (00:55) Welcome back to the show. I am Zach Smith.

Thomas Alvord: (00:58) And I'm Thomas Alvord.

Zach Smith: (00:59) And if you’re listening to this episode and you’ve not yet caught up on Episode 18, please do so or you might be completely lost with what we’re going to cover. Today we are going to break down the Kickstarter Algorithm so you can generate more funds for your next venture. Don’t know what the Kickstarter Algorithm is, no worries by the end of this episode you are going to be a pro. So topic number one, “Why does the Kickstarter Algorithm even matter, what's the deal with this thing and what is it?”

Thomas Alvord: (01:24) The algorithm is the power, it's the benefit for any platform. For example, the Amazon Algorithm or the Google SEO Algorithm, it's the same thing with Kickstarter it’s how your product or project ranks on Kickstarter. This is the reason why you pay Kickstarter a 5% premium, you could just go launch your own project or campaign on your own website. You don't do that and you go on Kickstarter and there's a reason it’s because of all the traffic that Kickstarter is bringing to the site like you talked about on the last episode Zach and the algorithm is how your project is going to rank on kickstarter.com so people can discover it.

Zach Smith: (02:09) If you want to know how to see what's raking on Kickstarter if you just go to kickstarter.com you can click on the little button called Explorer and when you click on explore, they have all kinds of different ranks you can choose from. So Recommended For You, Projects We Love, Trending, Nearly funded, Just Launched, I like the Trending one and then from Trending I like to sort by popularity and when I sort by Popularity, Live Projects that are trending I can see the projects by rank, by the Kickstarter Algorithm. So right now recording this podcast there’s 2,941 live projects ranked from highest to lowest in popularity. Vindication the Boardgame is ranked number one, number four is a company called MOFT, M-O-F-T they’re World's First Invisible Laptop Stand and so on and then you can just go all the way down, and these campaigns are ranking because of this Kickstarter Algorithm. Algorithm basically has a few different options you have Popularity which is now called Trending, you have Magic which is a special thing that Kickstarter does and then there's an algorithm for Projects We Love they’re used to be known as “Staff Picks” and those are campaigns that Kickstarter employees determine that they like and they give them a special badge and they rank those algorithmically as well.

Thomas Alvord: (03:29) All the funds and the pledges that are coming from these sources for example, from Trending, from Magic, from Projects We Love you can see those pledges coming in if you go to Google Analytics or to the Kickstarter Dashboard and it's the same thing on Indiegogo on the Indiegogo Dashboard as well. It will show you the referral sources where those pledges are coming from. So for example if somebody saw your campaign from a Facebook post or a Facebook Ad inside of Google Analytics it would show a visitor from Facebook and maybe a pledge for $50 and the same with the Kickstarter Dashboard, it would show a pledge from Facebook and how much in dollar value or whatever the currency is the amount was for that pledge. And inside of Kickstarter and Indiegogo as well as the Google Analytics Platform you can see the pledges that are coming from these sources. So for example if you go to the Kickstarter Dashboard you would be able to see Oh, here's pledges that came because I was a Project We Love and we’ve seen big campaigns where they have an extra $30,000, $40,000, $50,000, $60,000 in pledges just because it was a Project We Love that Kickstarter had selected. That's where you can start to see the benefit. Again we’re not really diving in to the algorithm just quite yet, but we’re about to get there but we want to explain how you can see these pledges.

Zach Smith: (05:06) We believe in something called Positive Externalities you could call it “The Trickle Effect” and the idea is largely based on Kickstarter’s Algorithm meaning the more money that I spend on advertising, the more money I spend and the more time and effort I put into earn media and press the more cross collaborations that I do, the more email lead generation you’ll recall these topics if you listen to some of the past episodes the more you are able to influence this algorithm because all of those other marketing forces are coming into play and then Kickstarter kicks in with their algorithm, and makes up the difference, the difference being the Positive Externalities, The Trickle Effect that makes all of those efforts doubly, triply sometimes even five or six times more effective in terms of what you're paying for them.

Thomas Alvord: (05:54) And those Positive Externalities are literally what can make or break the launch of a company. If you are launching on your own website you might have a one-to-one ROI and you have no profit, whereas if you're on Kickstarter it might be a one to five or a one to 10 in terms of your Ad Spent in your marketing budget to your overall raise. And so this is why Kickstarter is amazing, this is why the algorithm is so powerful, really what we got to understand is how do we make best use of that algorithm.

Zach Smith: (06:23) And I wanted to hit on one point this is again from our last episode. You might remember, if you listen to that one, Thomas said “We don't necessarily know what makes Kickstarter perform the way it does or why Indiegogo performs the way it does or guess what here is another aha moment for you”. Kickstarter’s algorithm and the way that they rank projects is another huge reason why you get these Positive Externalities on Kickstarter and you see nothing like that on Indiegogo. So what influences this algorithm?

Thomas Alvord: (06:50) The exact mathematical formula for the algorithm for the different categories, nobody knows except probably a few developers at Kickstarter. Now some of them we know for example, if you're selected as a Project We Love it’s because somebody at Kickstarter selected your project as a Project We Love. So we don't know the exact formula, it’s not out there and nobody has it.

Zach Smith: (07:13) And we will include an article for you about how to become a Project We Love, this is an article from Kickstarter’s Blog, we will include that in the show notes so you can read or listen to that because there are some things you can do if you want to be a Project We Love to give you the best chance to get that selection.

Thomas Alvord: (07:26) The number one thing that we typically aim for although there's multiple things is to have a project that ranks high on the popularity rankings which is now the Trending category. One of the most influential factors that dictates how high you’re ranking on the Popularity or Trending category is the number of backers that you're getting per day or within a time frame. So it doesn't matter if you get a 1000 backers the first day and then the next two weeks you have zero backers your campaign won’t be ranking at all it's not averaged over, the first day you probably be – you probably will be ranked number one in terms of Popularity or Trending and then after that you completely die off. So the number of backers and in a way it's almost a frustrating point because sometimes you might have a campaign that has a price point of $500 and it might be raising $50,000 a day, but in that case, you're only getting a 100 new backers per day and so you're not ranking that high, whereas you might have another product or project or campaign that has a price point of $10 and they're getting 500 backers per day and so they’re able to stay in the top of the trending or the Popularity category. So the number of backers is one of the most influential factors that dictate where you’re gonna be ranking. 

Zach Smith: (08:59) Now I know what you might be thinking, “Well how do I get a lot more backers?” Let me give you a word of caution. There are some random sketchy services out there that guarantee you that they can rank you higher and quite frankly they actually can rank you higher, but the way they rank you higher is not going to rank you higher in the categories that actually matter. Everybody I’ve talked to because I went down that rabbit hole just to see what they were up to. They will say “Well you pay me this much money and I'll get your campaign to rank higher in the Technology category and you pay me this much more I’ll get you rank this much higher” that doesn't work, I’ve seen it, I’ve had our clients do it, I told them don’t do that, there's no need to do that, do it the legitimate way legitimately get backers back in your campaign if you're trying to get – if you’re trying to do any kind of fake sort of thing or manipulate the algorithm mechanically or through artificial means it isn't going to work. Kickstarter has some preventions in place for that or something I don't know and even if your campaign ranks higher we've never seen it make any difference in terms of your total pledges. So the short answer is “Yes, you need backers but your backers need to be legitimate and backers matter way more than money”. A thousand backers today is way better than a $1,000 today or $10,000 or even $100,000 if $100,000 is only coming from 10 or 15 people, but $1,000 is coming from a thousand.

Algorithmically popularity based on number of backers is about 80% of the formula, remember our Episode on 80/20 in Pareto Principle that it is here with Kickstarter’s Algorithm. The other number you want to shoot for keep this one in mind 300 or more backers on launch day that’s your “FFF Strategy”. We talked about that before in that Episode if you can get 300 or more backers within the first eight to 10 hours of your campaign legitimate and real backers from your friends and family and your folks whoever wants to back your campaign that’s a very powerful way to rank very high in Trending and to possibly take advantage of the Magic category on Kickstarter as well. Now the Magic category combines a lot of interesting elements and Thomas is going to break these down because they’re little technical and this is when you really want to try to rank well in as well, but it's a lot harder to track and a lot harder to measure, but it’s very powerful to rank high in Magic because Kickstarter puts a lot of Cloud into Magic and has a lot of exposure on their website for campaigns that are ranking high in this category.

Thomas Alvord: (11:19) When you look at it Zach, most of these metrics come down to how much exposure you’re giving to Kickstarter or how many backers and what – here's an interesting fact 80% of all people who back a Kickstarter campaign are actually serial backers, meaning if for every person backing a campaign there's an 80% chance that that person is backing that campaign for either the second or subsequent time.

Zach Smith: (11:49) 15 million backers in that category.

Thomas Alvord: (11:52) Yes and our listeners can go to kickstarter.com/help/stats and Kickstarter shows these numbers, but basically how the numbers break down as it is right now as we’re recording this Kickstarter has had 15 million backers with about 5 million repeat backers, which means obviously that 10 million backers have only backed one time, well that means you have 5 million backers that have backed for around $50 million total pledges because they show how many pledges they’ve had. Basically the numbers comes out to 80%, so Kickstarter wants more backers or at least that's how their algorithm is attuned.

Zach Smith: (12:36) Yes Kickstarter believes in that customer lifetime value and because they believe so much in that customer lifetime value their algorithm as far as it relates to Trending, Popular is heavily weighted towards bringing new people to their platform. If you can bring new people to their platform Kickstarter knows they’re not just going to back your campaign, they’re going to back future campaigns and so they want to reward you and rank your campaign a little bit better. Now there’s a couple of other things are going to the Trending algorithm before we get into Magic conversion rate again, if you send a 100 clicks to the website and 10 of those convert that’s a 10% conversion rate. If you send one – if you send 100 visitors and only one converts that's a 1% conversion rate Kickstarter is going to look at your conversion rate, if your conversion rate is better they’re going to rank you higher. Video Embeds, there's ways for Kickstarter – your Kickstarter video to be embedded just like you embed a YouTube video, if you get picked up by press and they embed your video or if you embed the video on your website which is absolutely what you should do then that gives Kickstarter more exposure because there are links on third-party websites and third-party websites help with SEO and SEO is a long-term strategy and everything Kickstarter does is for the long-term they’re all about the customer-client lifetime value, that are public benefit corporation so they want to make sure they're around for a very long time they’re going to reward you for those types of things. And then finally Video Plays. Video Plays are how often people are watching your video the more video plays again the more Kickstarter exposure is going to happen. Now like I mentioned before 300 backers in day one is better than 30 backers over 10 days, time frame matters too, 24 hour period is better than a one week period. However, the algorithm does seem to have a trailing 72 hour type of an effect so if you got a thousand backers today and you got hardly any the next day you wouldn’t immediately drop out of Popularity it tends to trail off over that 24 to 72 hour period and that's why your strong launch is critical if you want to immediately take advantage of all of Kickstarters’s millions of people as we talked about Alexa rank and total number of visitors to a website on our last episode.

Thomas Alvord: (14:33) Going to the Magic category, Magic combines all sorts of factors, including user activity, previous pledges etcetera. At least from everything we've gathered and what we can see and this is actually why we focus primarily on Facebook Ads and not so much on Google Ads. Sometimes people will ask us “Why do you not run Google Ad, why do you focus so heavily on Facebook Ads?” and there's a few reasons for that actually, Google Ads are a long-term play in optimizing and re-marketing, it actually takes a while to build out a robust and good Google Ads strategy. And Facebook it's much better at driving direct traffic, driving pledges, driving it to scale, finding your audience you want, Google search can't really scale right, people searching for your product or product category or keywords that people might be searching for you can't really scale that and you really need to optimize your ads and the display network where a Google Ad shows up on some blog or some other website that is displaying Google Ads that can take a long time to optimize and also Google Cost Per Click is a lot higher. So Google Cost Per Click or Google CPC makes sense if you have a massive campaign with lots of traffic and you’re going to re-market to them maybe your campaign has already raised $200,000 or more and you’ve had a lot of visitors. But Google Ads are not as good as Facebook and that's where we focus on the Facebook Ads both because it drives pledges but it also helps with these algorithm.

Zach Smith: (16:07) Now I just wanted to read directly about Magic. Magic is interesting, even though Trending and Popular is the most important one to try to rank for because of backers here is something directly from Kickstarter’s website. The question gets asked “How does the Magic Search Filter work?” And then Kickstarter answers it like this and this is about seven months ago they have replied but it's been like this forever. “The default sort of our Advanced Discover Tool Magic displays a rotating cross-section of compelling projects on Kickstarter by surfacing a mixture of projects we love and what's popular from each of our 15 categories in order to exhibit the creative spectrum of our community we’ve just designed the Magic sort to be dynamic, this means it refreshes often if you see your project pop in and out of this magical sort don't worry, it will still be searchable using the other finite sorts and filters”. This is interesting and let me point out why it's interesting. The default search on Kickstarter is Magic and so you need to be taking advantage of that one as much as possible because people who go to the page by default are going to see campaigns that are ranked by Magic and not by Trending or any of the other types of searches. I think that's an important distinction to make.

 So keep that in mind as you’re building out your launch strategy and as you are determining how to take advantage of the algorithms on Kickstarter. Alright so this was another short episode we don’t want to get too wordy on something that is fairly straightforward and simple and we just want to give you action points that you can go and do right away to give your campaign a better chance of ranking higher or if you haven’t launched yet, so that you understand everything that you're up again so you can be most prepared. Hopefully, we covered everything for you, if not please leave your questions and comments on our website and we will get you some detailed answers. Thanks for all of your comments so far by the way, we’ve had a lot of listeners come in and say what they’ve liked, they’ve given us ideas for future episodes. You can do that at fundedtoday.com/podcast and there were a lot of mentions in the show notes for this episode. So make sure you go to our website to look for this episode specifically so that you can read those articles and click on those resources because those will be very valuable for you as you go about again planning and making sure that you have the best chance to succeed on your Kickstarter launch. And as always if this episode helped you out in any way by now hope you know the drill, we’d love a Five Star Review on iTunes or wherever else you listen. Funded Today Nation it is that time in the episode again for the Funded Today Products of The Week. We’ve got a couple of special ones for you.

 My Product of The Week is SimCam, an Unparalleled AI Home Security Camera. There’s a lot of home security cameras on the market now, what makes SimCam different than everything else out there, a couple of things. Number one no monthly fees, gotta love that. Number two AI, facial recognition, don't you hate when your smart devices recognize a dog running or a squirrel or a leaf or something blows in and you get a feed that says somebody’s at your door when it's not, no longer an issue within a couple of seconds the AI facial recognition kicks in, recognize whether it's a person or just a distraction and only gives you the information that you need so that you can have unparalleled home security support that is the SimCam on Kickstarter right now as of this recording 35 days to go, check it out you can probably get some of the early bird discounts right away.

Thomas Alvord: (19:24) My product for this week is a client we’ve actually worked with for about three years and its called the ERGOMAX Total Body Support. If you're like me and you sit at a computer for most of the day your posture is pretty bad, you’re slouched over, your head's are not really back and you does have really, really lousy posture. What ERGOMAX has created is a device that kind of goes around your shoulders which you can then kind of tie in which helps pose your shoulders back so you have better posture and the total body support is that there's actually two straps that kind of go around back behind your back and then go around your leg so it kind of helps your entire posture and the idea with this is you just wear 15 minutes a day and as you do this it will help your body get into better posture. So check it out especially if you work at a computer or have bad posture is the ERGOMAX Total Body Support.

Zach Smith: (20:27) Now our next master class is part of a new series we’ll be doing called “Life After Crowdfunding”. All we talked about is Crowdfunding so far, aside from a couple of things that we do in our own lives that help us as entrepreneurs, we want to tell you what happens after you’ve had a successful Crowdfunding raise. What you do, what does that look like, what are you supposed to do, how do you go from raising a $1 million to creating a multi-million dollar company, what happens if your campaign fails. What happens if you want to re-launch. We want to go over all of these types of things with you to talk about what your life is going to look like after Crowdfunding so that you can become full-time serial entrepreneurs like many of our creators and like we do like Thomas and myself do after you raised a lot of money your entrepreneurial journey to becoming a successful long-term business is actually just beginning but don't worry, we've been there, we’re going to guide you through that process so you can avoid all the pitfalls and mistakes we made and take your business to the next level. Part I of that series begins next Wednesday, so make sure you're subscribed and tune in then. And as always remember, don't wait till tomorrow get Funded Today.

Announcer: (21:37) Funded Today is the worldwide leader in Rewards Based Crowdfunding on Kickstarter and Indiegogo. Combined they have raised over $200 million and counting for thousands of new ideas and inventions worldwide. If you got an idea for a new product or an invention visit fundedtoday.com to speak with one of their experts.