Book Review: The Crowdfunding Bible: How to Raise Money for Any Start Up

Book Review: The Crowdfunding Bible:  How to Raise Money for Any Start Up

The Crowdfunding Bible: How to Raise Money for any Startup is written by Scott Steinberg.  A secular definition of a “Bible” is “a publication that is preeminent especially in authoritativeness.”  The Crowdfunding Bible is anything but authoritative.  The title is misleading because it doesn’t explain the “how” of crowdfunding, which renders the book practically useless for the aspiring crowdfunder.   

The secular “bible” is only 80 pages long. Those pages contain mostly a collection of platitudes that might encourage any neophyte, but reveals very little insight into the inner workings of crowdfunding that the more advance crowdfunder wants.  This makes the book worthless if you are trying to develop a crowdfunding strategy for a new project.   

To be fair, Crowdfunding is still an evolving industry.  Equity based crowdfunding has yet to be made legal in the US.  However the author, Scott Steinberg, is an authoritative figure in the venture capital world.  You would expect more.   Mr. Steinberg gave a brilliant speech recently, where he offered more insights into crowdfunding than his “crowdfunding bible” does.  (Youtube Link ).  

It is a good thing that the book is only 80 pages. Steinberg’s style is not hip.  He is dry with a veneer of an academician, who covers the subject, but never scratches below the surface.  

Steinberg starts off with a rather dry and academic definition of crowdfunding.  “Crowdfunding is the process of asking the general public for donations that provide startup capital for new ventures.” (P.2).    

On Donation Based Crowdfunding. 

“Rather than equity or a share of profits through, benefits often take the form of exclusive merchandise, advance access to new releases, or more personal incentives.”  P.3

Steinberg offers some curious explanations as to why people crowdfund. 

“Crowdfunding doesn’t just help you finance your projects – it also helps lets you gauge public interest before launching new products or inadvertently spending millions on goods destined to collect dust in a warehouse. “  P. 3 

Yes, this is true. However most crowdfunding projects are from people bootstrapping it.   They don’t have any other avenue to raise capital or they are tired of the angel/venture capital merry-go-round.  If these crowdfunders had millions, they probably would not be crowdfunding.   

If that is not enough, Steinberg delivers this gem half way through the book.  

“Note that if you’ve never created or run a PR or marketing campaign before, and are unsure of your ability to raise awareness or generate interest, a modest investment in professional help may be advised.”

Gee thanks.  You might have saved everyone money and time by putting a disclaimer on the back cover.   Most people want to learn the ins and outs of crowdfunding to help their project succeed.  This type of advice is not helpful.  It is lazy.  

Crowdfunders are scrappers. They will scrape together some money to put together a decent video and photographs.   They are going to barter, to persuade and to cajole others into helping them.  Why else would they be asking for money?   

Steinberg claims that crowdfunding is a great place to test market a product.  Large corporations like Proctor and Gamble are using the crowdfunding platform to test products, but not in a way that you would know it was P&G.  But whether or not crowdfunding will degenerate into a corporate testing lab remains to be seen.  I hope not.  

Crowdfunding is not a test market.  It becomes a test market. Generally, crowdfunding becomes a person’s main source of capital to enable him to develop and launch his prototype.   From my experience, I have seen very few projects succeed where the crowdfunders were not passionate and had not put in a huge amount of time into their project.   You can find many projects that look like they are just thrown up on the platform to see what sticks.  For the most part, those projects fail.  

If that is not enough, Steinberg appears to have copied the frequently asked questions and answers on Kickstarter and Indiegogo.  

“You should always benchmark your project materials against those of similar campaigns in your chosen field or genre.” P. 5

Really?  I would take it one step further and add “successful campaigns.”  

There is more.  

“Make sure your pitch clearly demonstrates your project, key selling points and what makes it unique. Videos should clearly represent each new venture and why it’s so original and compelling. Let viewers know: Why are you passionate about projects, and why should they be as well?”

“People told us that our message was too complicated. We learned that we needed to simplify, and make the message more basic [to communicate better with fans.]” - Jane Jensen, Pinkerton Road: A Year of Adventure.” 

“The trick is to structure rewards so that there are options for donors who wish to contribute at all tiers, without huge gaps between them. Case in point: You don’t want the next funding level up from a $10 reward to cost $1000, as you’d risk alienating many potential contributors.”

This is all sound advice.   If this is all that Steinberg is offering, which it is, then it is shallow.   It’s like a hamburger bun with no meat.   There is nothing there you can grab hold of and use.  

Steinberg does present problems that crowdfunders face, like this one. 

“The biggest stumbling block that we encountered was the immense number of social media outlets, blogs and websites that you need to reach, and even then there are no guarantees. Also, a lot of these people are insulted if you send them mass cc e-mails. Obviously, writing to each one individually is a large commitment.”  

However, Steinberg offers no solutions.  Solutions are what crowdfunders need. 

The book ends with the last 20 pages filled with project success stories.  I was hoping to find some real meat here.  Again, Steinberg doesn’t pick projects from the artist in Wisconsin.   No, he chose high profile successes, which the majority of crowdfunders will not be able to emulate.   

“The New York Times article was the most successful coverage we received. Before it, after three weeks of extremely hard work, we had raised $855. After it, we’d raised $11,550.”

This is a deus ex machina example that doesn’t really apply to crowdfunders.   When you are planning your campaign, you can’t rely on being saved by the New York Times or USA Today or some big media outlet.  The fact is that most projects are not going to get that level of attention.   It is a nice story.  It is nothing that is going to move the crowdfunding ball forward. 

If you are into crowdfunding, this book will be of little service.  If you are giving a lecture on the topic to an elderly audience at Leisure World, then this book makes a good reference.  Fortunately, the cost is about right for this book.   The Kindle version is priced correctly at “Free”.   The paperback version is $12.99.     Steinberg should change the title to The Crowdfunding cliff notes for those who have no intention to every mount a campaign but want a long winded explanation than from Wikipedia. 

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