The startup environment is buzzing with crowdfunding success stories, making many people interested in utilizing this method of raising capital. We live in a world where everyone is encouraged to take chances and experiment more, which results in thousands of budding entrepreneurs posting their projects on crowdfunding platforms each day. Unfortunately, many of them do not even pass the application stage, let alone the approval and publishing stage.
There are many roadblocks that campaigners come across while crowdfunding. To better prepare yourself, we’ve come up with a list of of things to keep in mind before you launch a crowdfunding campaign.
1) It’s all work, no play
Whether you like it or not, crowdfunding requires a lot of your attention and time. You will constantly need to be around your product and project. If you have a full time job and plan on this project being a side gig, you will need to have really good time management skills and learn to work smarter, not harder. From designing your prototype to delivering your product to each backer’s doorstep, you will be on your toes at every stage.
2) Offer the Minimum Viable Product (MVP) version first
We know you have big dreams for your project and you’ve already imagined how you will make it happen. However, it’s possible that your final product with all the bells and whistles could come at a cost that potential backers might not be ready to pay upfront. You can win the hearts and minds of the crowd with your idea, but if a complicated product takes more time to deliver than the initially promised time frame, it’s a definite turn off. There are endless stories of campaigners who failed miserably at the manufacturing stage, such as Zano, Asylum Playing Cards, and Crystal Wash 2.0.
That being said, it’s best to cut down on the fancy features that you would like to incorporate and instead concentrate on designing a minimum viable product that can deliver enough value and attract masses to vouch for it.
3) Figure out how much you really need
If you have a working prototype, you must have a good estimate on how much it will cost you to make. It’s best to keep a margin on the total anticipated costs so you can factor in any unexpected expenses that may pop up. You can take a look at our article on pricing strategies to get a better idea on how to determine your crowdfunding goal.
4) Your story is very powerful. Make sure you tell it well.
Your campaign page is the ultimate marketing tool that will earn support from the crowd. Your page must be compelling and answer most of the obvious questions about the project. Your images and video should be engaging. Also, create rewards that represent the true value of what you are asking for. Do not forget to introduce your team and talk about the skills and expertise of each member.
5) Launching on the correct platform is crucial
Do in-depth research on all the possible options you have with each crowdfunding platform. You could apply to generalists like Kickstarter and Indiegogo, or go to a niche platform (if there is one for your industry.) There are also platforms like woomentum and plum alley that are dedicated to female entrepreneurs.
Find out if there are similar projects within your industry that are posted on your platform of choice, because if there are enough backers and repeat backers, this can help you decide if your idea has a chance. No matter which platform you choose, always make sure you are aware of the rules of the platform, as not following them will lead to your application getting rejected. Don’t get disqualified before you even start.
6) We know you’re awesome but without marketing you will get nowhere
Marketing is the lifeline your campaign will survive on. Without it, your crowdfunding can die a slow and painful death. No matter how useful and valuable your idea is, you will need to get the word out to ensure you get enough traffic and backers. Make sure you have an official website, landing page, relevant social media pages, blogs, and PR coverage. It’s also beneficial to attend events and competitions to network and spread the word.
7) Hit the ground running, and take advantage of the herd mentality
Make sure your initial investors (friends, family, partners) pledge their support to your project immediately after you’ve launched. A campaign that trends faster at the beginning is definitely going to mobilize other backers in a positive way, attracting more supporters for your campaign. A campaign that does not get enough attention in the first week of its launch has a greater chance of failure.
8) Your idea can get stolen as soon as you launch
Once you share your idea on a public platform, keep in mind that it can get stolen and copied sooner than you think. It would be smart to file for a patent or a copyright for your product to protect yourself before you go public.
9) A successful crowdfunding campaign will result in even more work
The real work begins after you’ve successfully completed your crowdfunding campaign. There will be sourcing, hiring, researching, consulting, vendor selection, manufacturing, packaging, and shipping, followed by rounds of feedback. Consider using a crowdfunding tool like Backerkit to help you collect surveys, increase pledge amounts, handle email support, and directly integrate with Easyship for seamless fulfillment.
10) Be prepared to invest your own money into your project.
There is always a possibility that you could use up all your funds halfway to fulfillment. Be prepared to have enough savings to cover potential shortages to ensure the success of your campaign.