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Providing incentives

An important part of the crowdfunding style popularised by Kickstarter is backer incentives. Kickstarter and many similar platforms make it mandatory for project owners to provide rewards to the people that back campaigns. While the amount and form of these rewards can vary, providing the right mix of incentives seems to be integral to creating a successful campaign on these services. Rewards have traditionally been a problem for open source projects. Unlike proprietary, commercial projects, they seldom have a product they can offer in exchange for funding that is deemed worth paying for, as the code is open source anyway. They also find it hard to build extra functions into the software itself as the open source nature of their code makes it impossible to keep these extra functions restricted to backers.

Incentives that open source projects can provide range from simple thank you credits on the project's web site through extra content provided only to backers, such as a regular newsletter or even physical products like t-shirts, to selling sponsorship opportunities in exchange for funding. What exactly a project can offer is often down to the kind of software it is developing and the community around the project – it is almost impossible to give hard and fast guidelines here. Whatever the project, however, it is important to make sure backers are offered a good mix of incentives that is well balanced and targeted at the project's audience.

Some projects offer exclusive access to developers, which gives backers the opportunity to influence the direction of the project. It is however debatable whether developer access should be a sparse commodity in a healthy open source project at all. Ideally, the project is driven by many developers and has a low barrier to entry which commoditises developer access, making it less useful as a reward. Single individuals having a large amount of influence on the project's goals can also collide with the need to clearly lay out campaign goals and then follow through with delivering them. As the users with exclusive access will, presumably, want to influence these goals, it has to be considered whether providing such a reward is important enough to risk compromising the direction of the overall campaign.

On the other hand, the more desirable the rewards are, the more likely backers are to pledge money or to even increase their pledge. Projects that don't offer good incentives only have charity to fall back on. At the very least, the project should make sure that its supporters are credited were credit is due. A system like Kickstarter should not be treated like any other fundraising campaign. Hardware-related Kickstarters and other projects that deliver actual products (like the gaming-related campaigns mentioned earlier) have established a culture around the platform in which backers expect something in return for parting with their hard-earned cash. Projects should also factor the costs of rewards into the money they will have to raise from the very start; Kickstarter offers some initial guidance on this topic.

Transparent goals

Backers on Kickstarter, Indiegogo and similar sites often see their contributions as a kind of investment in a future product; this counts for open source projects as it does for proprietary software or hardware designs. Because of this, clarity and transparency of both the project's goals and the ends the fund will end up being used for benefit a campaign greatly. Visitors to the campaign page will be more likely to back a project if they have a clear picture of the product they will receive at the end of the process.

Equally important is to tell potential backers exactly where their money will end up. Is the money being used for hardware the project needs to complete its goals or will it be used to pay software developers? How much are these software developers paid and what guidelines are their salaries based on? The more information project leaders can provide to answer these kinds of questions, the better. If possible, video messages from the development team can be used to help put faces to sterile sums of money – this is especially important if the project is low on rewards it can provide and is mostly operating on good will donations.

Achievable goals are also an important part of the puzzle. Projects that over-promise tend to get caught out quickly, especially in the open source sector which is dominated by a technical audience. This often means they will not get funded. Lowering the complexity of the campaign's goals along with the targeted amount of funds rather than overdoing it on features seems to work for most projects. This is especially true for Kickstarter where the platform's all-or-nothing model means that setting one's total funding goal too high can be disastrous for the overall success of the campaign.

One option is to put additional features up as "stretch goals". Stretch goals will only be fulfilled if the project gets funded and receives additional funds that exceed the initial goal. As such, stretch goals are a good way to be able to, for example, hire more developers or employ them for longer to implement additional, non-essential features. This gives backers an added incentive to pledge more money and keeps the initial goals less complicated and more achievable. Generally, it is very important to have a clear picture of the goals of the campaign before anything else (such as rewards) are planned. The more strictly the project goals are defined, the better.

Next page: Good communication is key

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