Chapter 19: E2 KickStarter Campaign - CASE STUDY

Fundraising & Facebook Performance Information

See Case Study - Charts in Chapter 19

The BASEMENT

PLAN: Chef and her team developed a plan and set a relatively modest BUDGET of $17,000 for the project. The plan involved TRANSFORMING and UPDATING the basement so it was a flexible event space with communal tables, a new bar and cabinets, and, of course, fresh paint! Being a small community-focused business, however, these funds were not simply lying around. Instead, Chef, along with restaurant manager Jason Thomas, former sous-chef Lauren Urbschat (Katz MBA) and Eli Park-Yanovitch (also a Katz MBA), decided to turn to the community for help using the popular crowdfunding platform Kickstarter.

Crowdfuning & Kickstarter

CROWDFUNING is a form of capital raising whereby individuals (typically "regular" people) each contribute relatively small amounts of money that are pooled together. KICKSTARTER.COM is one of the major online platforms for crowdfunding and focuses on creative projects. It was launched on April 28, 2009, and between then and late-2012 almost $400 million in funds across 34,000 successful projects (fundraising campaigns) have been raised by entrepreneurs.

The e2 Party Dungeon Transformation KickStarter Project

Chef Romane, Lauren, Eli, Jason, and the rest of the e2 team started planning their Kickstarter project in the first few months of 2012, aiming to launch the campaign in late April of that year. The PLAN was to set a 30-day deadline to reach their funding goal of $17,000. The team set up their Kickstarter webpage (http://bit.ly/e2kickstarter) and got to work planning their month-long marketing blitz. AS INCENTIVES TO THEIR BACKERS, they offered a number of rewards based on how much money a backer pledged: SEE Breakdown of Incentives in Text - Chapter 19/Case Study.

In terms of online social media, the main channel used to promote the Kickstarter project and to encourage people to get involved as backers was _______________.

Facebook **Twitter was also used to disseminate information about the Kickstarter Project.

What is E2 Kickstarter Project?

Grassroots marketing through social media for a Pittsburgh restaurant's crowdfunding campaign.

Each Kickstarter Project:

Has its own webpage that describes the project, the amount of money sought, how it will be spent, how long the fundraising campaign will last, and what rewards are offered. UNLIKE OTHER crowdfunding platforms such as indiegogo.com, Kickstarter campaigns have an "all or nothing" feature—if the amount of money sought (i.e., the goal) is reached or exceeded within the limited-time campaign (i.e., by the deadline) the entrepreneur gets the money raised; however, if the funds pledged fall short of the goal once the deadline is reached the entrepreneur receives nothing. As a result of this feature, Kickstarter campaigns NEED TO BE HEAVILY MARKETED in order to be successful. It also helps if the "BACKERS"—the people who pledge money—are motivated to help make the campaign a success.

E2

Is a small BYOB restaurant located on Bryant Street in the Highland Park neighborhood of Pittsburgh, PA. Its CHEF and OWENER are Kate Romane and the restaurant serves "rustic Mediterranean fare" using local produce and locally produced goods (including produce grown on Churchview Farm for e2). This is Kate Romane's first restaurant. The space is divided into TWO areas: 1) The upstairs dining room (10 tables, 28 seats) and 2) the downstairs "party dungeon" basement (for events; can accommodate up to 85 people). Representative MENU items include Chef Romane's much-loved meatballs and red sauce (with a top-secret recipe!), wild mushroom risotto, spaghetti aglioe olio (a Roman classic perfectly reproduced!), and pumpkin mascarpone ravioli with prosciutto and sage cream. Chef Romane took over the space in early 2010 and turned it into what is now e2. They STARTED OUT serving soup during the infamous "Snowmageddon" blizzard in February 2010 and expanded the menu and opening hours over time to what they are today. Chef and her team had never been happy with the restaurant's basement. By early 2012 they had hosted a number of events (e.g., wedding receptions, rehearsal dinners, birthday parties) in the space but, as Chef said, the space "really needs some love." For instance, THE BASEMENT had 1980s décor, unfortunate lighting, and some water damage. Despite these problems, the basement had proved to be valuable as an event space and Chef had decided it was time to make it better.

The e2 Party Dungeon Transformation KickStarter Project: Social Media & The Campaign

The e2 team RELIED HEAVILY on a grassroots approach to getting the campaign off the ground. The INITIAL CHALLENGE was to make as many people as possible aware of what e2 was trying to do as quickly as possible. This started before the launch date and relied mainly on word of mouth. Chef Romane and her team also hosted some special dinners in the old party dungeon basement space to which they invited "influential" people from the local community, bloggers, and regular customers. The idea was that these people would become the "seeds" of a viral marketing campaign and who help spread the word about the Kickstarter project from day 1.

A key Part of their marketing campaign was a ____________ that talked about the restaurant, Cheg Kate Romane's philosophy, and what they wanted to do with the $17,000 they were seeking to raise.

Video

The e2 Party Dungeon Transformation KickStarter Project: RESULTS

WEEK ONE: went pretty well (They had reached almost 50% of their funding goal). WEEK TWO: they had mixed feelings about. The CONCERN was that the initial "spike" of activitiy at the beginning of Week One had dropped off considerably. They were WORRIED that maybe all the people who were willing to help e2 had already helped and that they had saturated their market. Facebook Metrics also concerned them because they suggested that interest in the campaign was slowing down or at best holding steady. The team was worried about ORGANIC REACH. They wanted to AVOID a situation where they did NOT reach their goal. The team REGROUPED at the end of WEEK ONE and poured over the performance metrics they had from Kickstarter (Table 1 IN Chapter 19) and Facebook (Table 2 IN Chapter 19). As they looked for trends and patterns of interest they asked whether they should stick to their week-one marketing plan by continuing to issue frequent updates through Facebook and Twitter and by reaching out to potentially influential people such as their regular customers, people in the local restaurant/bar industry, and local bloggers? Or, on the other hand, should they do something different (either in addition to their week-one plan or in place of it)? If that was the case, then what should they do? **Either way, they needed to make a DATA-DRIVEN decision fast.