How To Make A Startup Explainer Video On A Budget

Written by
Kevin Alster
Published on
July 2, 2024
Table of contents

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One good explainer video can launch your startup into a multi-million dollar business.

Don’t believe that statement?

In March 2016, a tiny New Zealand shoe startup named Allbirds launched with an explainer video and a prolific marketing campaign. And in just five days, they blew past their maximum sales target of just under $120,000.  

In 2022, Allbirds is set to hit a 2 billion dollar valuation.

Yep, an empire started with one catchy explainer video starring the founder, his mom, and many, many sheep... 🐑 🐑 🐑

Meet The Wool Runners

If that’s not enough evidence for you on the power of explainer videos, let’s not forget Kickstarter. On this crowdfunding site, explainer videos bring in billions of funding and have launched more than 200,000 individual startups as of 2022.

If creating explainer videos is already sounding expensive to you, don’t worry, it’s possible. In this post, we’ll walk you through step-by-step on how to create a startup explainer video on a budget.

What are startup explainer videos?

Explainer videos are short promotional videos that pitch a business's product, service, or in rare cases, founding concept.

They are short, snappy, informative, and often use humor or inspiring facts. In practical terms, you can think of an explainer video as a hyped-up version of your elevator pitch.

While an explainer video can exist simply to “explain” something, they are most often used to pitch investors or sell directly to customers. Over 85% of startups have created a video; most can be considered explainer videos.

How should I use my startup explainer video to boost revenue?

There are three main categories that your explainer video can fall under

  1. Sales & marketing content
  2. Educational content (e.g., how-tos),
  3. Investor pitches.

Which category you choose depends entirely on your current developmental stage.

Sales and marketing content is typically helpful if you’re bootstrapping and trying to attract new customers on your own.

Investor pitches can be highly similar to marketing videos but might also include industry statistics and projections.

You can create how-to and tutorial startup explainer videos if you’re focused on onboarding new users more effectively.

How to attract new users with explainer videos

Startup videos can be used in plenty of ways and are easy to repurpose for multiple platforms.

You can use explainer videos as marketing tools to get more users:

  • On your website’s homepage or feature page
  • On all forms of social media, including Twitter, YouTube, Instagram, and Tiktok
  • From emails that you send to subscribers who are not active customers

How to get funded using explainer videos

Indiegogo reckons that pitch videos help you raise as much as 4x more than you would without them.

In a startup explainer video that doubles up as an investor pitch, explain what your product does, how it improves someone’s day-to-day, how it works, why you’re trustworthy, and why someone would want to buy your product over any other options.

Why startup explainer videos perform so well for indie and bootstrapped founders

Often, founders and teams are in the trenches working so hard on developing the product that they struggle to explain its purpose without diving into details that overwhelm the listener.

A good startup explainer video can instantly overcome that barrier.

A comprehensive explainer video gives people an excellent introduction to your features, benefits, and use cases in a clear, concise manner that’s far more efficient than you talking.

From there, you’ve got a great platform to jump into a deeper conversation with copywriting or in person.

Tip 💡

If you plan on using your startup explainer video also to pitch investors, it’s a safe way to reduce some pressure, pique interest, and mitigate any concerns over your own ability to communicate the idea.

Finally, some people are just visual learners 🤷.

A great explainer video will get them to the “aha” moment faster than any wall of text. And that “aha” moment is exactly what you need to improve conversions and make sales.

How to make a startup video and keep your budget under control

A startup explainer video production budget can range anywhere from $0 to $50,000. It all depends on your team’s bandwidth, skill, and desired startup video style:

  • Full-service explainer video companies can handle the entire video production process but will charge you for the convenience.
  • Making something by yourself can be cheaper, but you need to, at least, have a good idea of the messages you want to get across.

1. Use an automated video-making tool

There are hundreds of startups with a myriad of software and tools that can help you with creating explainer videos. Synthesia, for example, can take your written script and turn it into natural-sounding speech and an AI-generated presenter.

Check out the video below to see how it works.

Discover Synthesia in 4 minutes | Product Tour

This means you can cut down on the cost of cameras, actors, microphones, and other expensive equipment.

Companies like Animatron can also automate steps for 2D animation videos by providing pre-cut templates and premade graphical assets. Other tools offer even more rudimentary solutions to help create slide-show-style animations. Whiteboard explainer videos are also a popular way to make static images more interesting to the viewer.

Using a tool that can do the heavy lifting for you will make it much cheaper to produce professional video content.

Tip 💡

If AI-generated presenters sound like the perfect solution for you, check out this in-depth webinar.

It breaks down three explainer video examples, gives you an easy-to-follow script template, and shows you exactly how to create your own how-to video from start to finish.

How to Use AI-Avatars in Marketing: Create a Product Explainer with Synthesia

2. Decide on live-action, animation, or a hybrid combo style

It’s easy to get distracted by all the potential of your explainer video, and you can end up wasting budget writing scripts that aren’t possible to achieve in your chosen style.

For example, if you’re selling a physical product, it’s a good idea to have some live-action footage to showcase it. If you’re talking about software or services, then animation or a hybrid combo of the two styles would work best.

Don’t get caught up in the fancy features of the tool you’ll use. Rather focus on the best possible way to explain your startup’s value proposition.

3. Humor can overcome even the tightest budget constraints

It’s no surprise that most startups have a tight budget when they’re getting off the ground. And that’s why humor is such a strong theme in most successful explainer videos. Even if you don’t have the funds for a big production, invest in a decent scriptwriter who can use humor to win people over.  

Warby Parker did just that by using only a few actors and props. Check out the explainer below for some inspiration.

1,000 Pieces of Candy

4. Calculate your ROI by having a foolproof promotion plan

Anything feels expensive if you don’t know what the return on investment might be. At the very least, you should take the time to run some numbers.

First, you want to calculate how many people will watch your video. You can do this by estimating the reach of your subsequent marketing campaigns and/or current traffic over the next quarter. Next, calculate what percentage of viewers are likely to convert after watching the explainer. Now you should have a fairly reliable number to work from. Ideally, you’re looking for an ROI that’s 2-5 times higher than the cost of production.

5 Tips on how to make a great explainer video for your startup

Tip 1: Aim for sweet and simple explanations

Simple is the name of the game. Most startups have complex systems behind their seemingly simple solution, and founders quickly fall into the trap of over-explaining the tech.

Rather than diving into the nitty gritty details, focus your video on:

  • The problem that exists
  • How your startup solves it
  • Your benefits and value proposition
  • How you’ll ultimately make your prospect’s life better

Tip 2: Keep it short and snappy

According to industry experts, explainer videos are best kept between 30 seconds and 2 minutes. But it’s not a hard and fast rule. What’s more important than the time it takes for you to explain is the flow of your video. If the flow is slow, your video is too long. If it feels frantic, your video is too fast. When the flow is just right, the video should feel “snappy” and engaging.

Did you know? 🤔

How to plan the perfectly paced 90-second video explainer:

  • The problem that exists (5-10 seconds)
  • Your solution/value proposition to solve the problem (5-10 seconds)
  • How it works, benefits, and how customer’s lives will improve (30-50 seconds)
  • Call to action (10 seconds)

Tip 3: Plan out your script as a storyboard

It can be really tricky to visualize a written script. It’s a great idea to draw the key scenes in your video as a storyboard to better understand if it will all fit together. While there are plenty of apps out there that can help you make a storyboard, drawing it out on a piece of paper or an app like Miro is often sufficient.

An example of a visual storyboard.

Tip 4: Use high-quality visuals

At no point should your video look low-quality. If you’re using generated or stock media, make sure you check for pixelation and aspect ratio issues. If you’re recording yourself, invest in good recording equipment. Your audio and image quality needs to be crystal clear.

Use AI for consistent quality 🤖

If you’re using AI video generators to make your explainer video, you don’t need to worry about video and audio quality.

AI tools like Synthesia consistently generate great quality content without any need for expensive recording equipment.

Tip 5: Don’t forget the call to action!

A startup’s explainer video isn’t there to educate. It’s there to sell. So make sure you don’t forget to give the watcher the next steps at the end of the video!

3 Explainer video examples that have helped launch startups

1. Animated explainer video for Xangle

This animated video explainer follows an easy-to-understand video script on the complicated topic of understanding crypto and provides a simple solution to potential customers.

2. Dollar Shave Club’s extremely popular launch video

When Dollar Shave Club launched, they had one of the most innovative marketing strategies around. And while this short video didn’t break the bank in terms of production costs, it built a rock-solid emotional connection with the audience. - Our Blades Are F***ing Great

3. Warby Parker’s 17 second explainer ad

Earlier we looked at Warby Parker’s 40-second explainer video. Since then, the company has worked hard to create brand awareness. And thanks to that awareness, they no longer have to develop long explainer videos. Instead, they use humor and short stories to engage the viewer and deliver an ultra-optimized call to action.

Warby Parker | Put It On

Want to get your startup’s explainer video done today?

Synthesia will help you transform simple text into professional-looking explainer videos. You can create videos in 130+ languages, choose from 160+ AI avatars, add in screen capture, and easily update your videos as your startup grows.

Want to see it in action? Try this free AI video maker.


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