For every crowdfunding success story, there are many failed projects. Follow these 10 top tips to give yourself the best chance of success
For every crowdfunding success story, there are many failed projects. Follow these 10 top tips to give yourself the best chance of success
The first and most important consideration is whether your product is actually suited to crowdfunding at all. It should be a consumer-facing product with a price range which does not put people off, while your business should benefit from having its customers as shareholders.
The price will obviously depend on what you are selling, but it is imperative that you don’t undercut yourself and end up failing to fulfil your orders as a result. For physical products, find out exactly how much it will cost to achieve your design – then engage with your manufacturer to ask for a ‘design for manufacture’ price. Ideally the price should also include a buffer to cover the fee charged by the crowdfunding platform as well as credit card fees.
From Kickstarter to Indiegogo, Seedrs and Crowdcube, there are many platforms to choose from. Look at where successful projects similar to yours have been hosted and read up in the media on how they found the experience. Check out specialist platforms: for example, SeedInvest connects startups with investors while Patreon is excellent for creative professionals and GoFundMe is targeted at individuals.
If you have a compelling business idea or product, tell your story in great detail. The old adage of a picture being worth a thousand words rings true here – in the case of products – while a video of you delivering your pitch is the ultimate way to engage with potential investors. Approach it like an elevator pitch.
If you have the means to raise funds from interested investors prior to launch, grab the opportunity with both hands – especially if you have a lofty target. Aim for 30% of your target: if people see you already have backing, they’ll be attracted to it. However these investors should be treated the same as joining investors from an ethical standpoint.
Before you hit the button, spend time crafting your campaign and briefing media contacts. Coverage outside the crowdfunding page itself gives your project validity and pushes it out to a wider network of potential customers. Also warm up your existing network of contacts, for example in preparation for a LinkedIn campaign or so they can instantly invest once the campaign goes live.
Thorough preparation will not be enough if you take your foot off the pedal after going live. People often underestimate the effort they must put in during this period.
One of the great benefits of crowdfunding is that you can receive immediate feedback from your target market before launch – and it won’t cost you anything extra. Deciphering what they are looking for rather than forcing your own ideas wholesale onto them is crucial.
Active engagement with the community is essential to getting them onside. They are more likely to back someone who responds to their questions and feedback – and in the event of delays or other hiccups, an active line of communication rather than radio silence could be the difference between ultimate success and failure.
A bit leftfield, this one: a huge study conducted by major universities found that while describing a product as novel or useful in isolation has a large positive effect on backing, claiming both had a negative effect as users view them as incongruent.