Crowdfunding: Is it right for your business?

Stephen HarveySocial MediaLeave a Comment

crowdfundingCrowdfunding with platforms like Kickstarter (tech) or Indiegogo (arts) are all the rage with entrepreneurs trying to get funding for their business ideas. It’s a great concept where a business person solicits the masses for money to pay for a new concept or idea that can have real world benefit. But, putting together a successful crowdfunding campaign that meets a pre-determined goal is difficult and requires lots of work.


Organizing and managing a crowdsourcing based funding campaign can quickly turn into a monumental venture, especially if what you do well doesn’t include business concepts. I recently spoke with a gentleman who recently started a Kickstarter campaign to raise an initial round of funding for a home automation product that could revolutionize the ‘Internet of Things’ inside a home. Brett DeSilva is a mechanical engineer by trade and spends the majority of his time designing robots and technical interfaces that do things better and make life easier. So, when it came down to the business and marketing aspects of launching a new business via Kickstarter, he encountered issues that he never imagined when the project started.


Brett says the biggest challenge his project faced was “getting a feel for what a backer is looking for in a project.” One key point he mentions is knowing how to frame your vision in a way so that people can discover it on a crowdfunding platform. Using terms and concepts that are familiar to a target audience is a good way to get a campaign noticed, and ultimately funded. Brett says that not having a good plan to attract and woo the potential audience “actually stopped our campaign.”


However, he goes on to say that the most helpful thing was to know all the nuances of the crowdsourcing platform. Knowing these details will make it easier to connect with potential backers. Getting into the rules and regulations of the crowdfunding platform along with best practices is a huge benefit before and during the campaign. Brett said that “learning how they (the crowdsourcing platform) want you to do things will make life easier.”


Brett wants to leave readers with two helpful things he learned through the crowdfunding process. First, know your audience. Decide exactly who they are and how they want to communicate. Then decide on the exact message you want to say to them about the product or service you are trying to get funded. There might be more than one target audience, so determine this early and craft customized messages that will resonate with each individual market segment.


Second, once you have determined the ideal target audience(s), then concentrate on keeping the product or service message as simple as possible. Make the message super simple to understand because it will make explaining concepts easier and will also enable folks to understand the product or service that much faster. This will result in more people funding the project.


To get that simplified message, Brett explains that feedback is crucial. Putting the product or service idea in front of as many non-peers as possible is important to get honest feedback and observations. Friends and relatives tend to sugarcoat things which might be nice for feelings, but doesn’t help the development process. Solicit reviews and feedback to determine areas to work on and improve the project.


So, my advice would be to do as much research as possible. Dive into the market or industry you are wanting to venture into and try to determine as many variables as possible. Think about how you want to promote the “launch” of the crowdfunding campaign. Do this as an exercise for marketing the business because it will be helpful after it has taken off.


If you have any questions about crowdsourcing or want to get a kickstarter style campaign started, then please feel free to contact LTM Digital and we will be happy to help.


Switchform.net – Brett Silva project

 

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