26 Jun Factors to Consider Before Crowdfunding
Crowdfunding is rarely easy. There are those campaigns that make it easy, but there are typically more mechanical turks running the show behind the scene than most realize. Before jumping in, it would behoove you to consider the following:
- Is your idea that good? Really? Are you sure? Sometimes you might have a really good idea, but everyone thinks it’s crap. Sometimes, you might have a crap idea that turns out to be really good. I suggest you try getting a second or third opinion on it, from people you really trust (who will tell you straight) to see if they think it is a great idea, because at the end of the day, it’s the public who really matter when it comes to monetizing your idea.
- What value will your product add to the consumer? You need to be able to explain to your audience how your product will change their lives or the lives of the people in your community. Backers like to be associated with “feel-good” initiatives, and this are, more often than not, ideas which have the potential to make people’s lives better, to improve general well being of mankind. If your product or project won’t change anyone’s life, then, you won’t get any change for it (pun intended).
- How well do you know your target market? Who is most likely to buy into your idea? Who is most likely to benefit from your product? If you can assertively answer this, then you will know who exactly to advertise to and how to do it.
- Do you have a strategy for reaching out to your sponsors? Oh, really? Let’s hear it? After identifying your target market, you must connect with them and engage them in a way they will be interested in investing in your idea. If you don’t know how to do this, get an expert, a marketing, tech savvy, social media genius. This will work.
- How much money do you REALLY need? It is easy to get greedy and ask for a lot more than you need. Especially, if you are surrounded by people who love you and who love the idea of giving you money. Setting your funding goal way above your limit only increases the chances of not reaching your goal. Also, it could ruin your campaign if their comments begin to challenge the amount of money you’re asking for. It also discourages backers from contributing if the money asked for is too much, because they might feel as though their contribution won’t really help much. Avoid greed, just ask for what you need and be open about what you really need it for.
- Can you fulfill ALL your promises?No? Then do NOT make them. Making promises you can’t keep will only lead to you being vilified online, which is very bad for your brand. Only give timelines you know for certain you can stick to. Production timelines, reward timelines and product launch timelines are very important. If you said you would do it, then do it, or face the consequences.
- How different is your idea from others? Newsflash: You did not re-invent the wheel. So what makes your idea so much better than the ones who came before you and the ones who will come after you? They will ask you this question; you must be ready to knock their socks off with your response. Be different. Be unique. Stand out. Follow what others have done: secure your crowdfunding model and target a niche.
- What impact will Crowdfunding have on you and your idea if you fail? There is (based on serious research) a 60% chance that you will fail. I am not a naysayer, these are just facts. Evaluate what this will do to you. Will you become depressed? Stressed? Get panic attacks or worse still, die? If the answer to any of the above is yes, then please avoid Crowdfunding. The risks are too high. Another thing, what happens to your idea after you fail? Will this sink your company for good? Will it hurt your other projects? If yes, then avoid Crowdfunding like the plague. Protect yourself and your company. No publicity is better than bad publicity.
- Do you have a team of disciples that fully believes in your product? You cannot do it alone. Every cause or project needs an evangelist. Crowdfunding requires you to leverage your relationships to gain footing in a very competitive market. Your followers, or disciples, will also leverage their relationships, ie. Friends and relatives to help you reach your target. If you do not have a team, pack up, leave the gym.
- How great are your rewards? A lot of backers have said they have, at one point or the other, contributed to an idea they didn’t really get or that didn’t affect them, because the rewards we cool. If you can pique your audiences interests with extremely nice rewards for their donation, then you’re are most likely to yield high results on your funding campaign. Be careful of promising things you can’t deliver. It will hurt your campaign a great deal.
- Have you checked out the attributes of projects that failed? What about the attributes of those that succeeded? No? Do that NOW
- Write On Track http://Writeontrack.ie/Crowdfunding
- Steinberg, Scott. 2012. “The Crowdfunding Bible.”