Like many marketing speakers have noted, crowdfunding is quickly getting labeled as the future of investment, especially by top innovators. The coming years will bring a flood of new products, online fundraising platforms, and clever alternatives to courting venture capital. However, it bears remembering that not all products and projects are well-suited to the crowdfunding format – some projects are better developed in the dark or over a good number of years, before they’re ready for their moment of fame. Even as competition and consumer expectation continue to rise for businesses and individuals, new opportunities will be accompanied by growing challenges. Below are five ways to successfully meet these challenges head-on and, in doing so, win.
- Partner to Win. While a rising tide might lift all ships, as marketing speakers and experts know, an effective marketing campaign will demonstrate that some ships are more seaworthy than others. As the crowdfunding industry rapidly grows, there will be that many more competitors clamoring for attention. Also, for every successful campaign that makes national headlines after raising a million dollars on Kickstarter, there are also currently dozens of lesser-known or less-fortunate projects that fail to meet their minimum financial goals, and fade gently away into obscurity. To increase your chances of standing out, team with other seasoned project creators and start-ups who have a track record of successful crowdfunding, and strong following. All can help support the cause, and help you raise awareness.
- Build a Pipeline of Successful Rewards. Using sites such as RocketHub, Crowdfunder, MicroVentures (and an ever-expanding host of alternatives), business owners and garage tinkers alike can publicly showcase projects via text descriptions and video pitches, and solicit Internet users for donations, without asking for the moon. As an example, as early as 2010, TikTok+Luna successfully solicited a large number of $25 donations from their 13,000 backers. Whether offering investors a share of profits (note: SEC regulations must be observed), or simply trading product preorders or personalized rewards (i.e. hand-signed collector’s editions) in exchange for pledges, such vehicles don’t just provide businesses the upside of connecting directly with customers. They also let individuals and market leaders create greater empathy with end-users; right-size projects and better forecast market demand; focus test feature sets, messaging and marketing; cultivate community; generate positive cash flow; and begin building brand awareness all from day one.
- Find Influencers Who Can Provide Support. Functioning as both product showrooms and project incubators/testing labs, crowdfunding sites allow you more freedom to accurately gauge consumer interest, position supporting promotional activities, and craft production scope and pipelines. Moreover, they also democratize the world of product development and distribution, by allowing the public to determine projects’ ultimate viability, by directly voting with their wallets. At the same time, shortcutting traditional publishing methods doesn’t mean that you’re not utilizing influencers – they just don’t have to be wealthy speculators on current and future market needs. Find and connect with ordinary people with extraordinary influence, followings or talents who can help support your projects the world over.
- Keep it Simple. Challenging the status quo is great, and potentially saves project creators from wasting time building projects, products or services for which little demand exists. At the same time, this concept ratchets up the need to present a clear and compelling value proposition. Current crowdfunding efforts are primarily consumer marketing campaigns at heart, based around projects whose values must be easily communicated and visually demonstrated, with an appeal to either a broad cross-section of viewers or small but loyal niche. Whereas B2B plays and commercial enterprises with formalized business plans will surely gain more traction in the growing wake of equity-driven crowdfunding platforms, again, clearly demonstrating projects’ value proposition will be a crucial facet of most campaigns going forward.
- Use Your Selling Points to Fuel Viral Pass-Along. Competition continues to rise in terms of project scope, quality and production values. At the same time, audience attention and appetite becomes growingly indifferent and fractured, as dollars and eyeballs continue to flood into the crowdfunding space. With every campaign creator worth their weight in ideas contemplating the field’s upsides, donor fatigue continues to grow in the wake of a rising parade of hopeful new sites and projects. Tomorrow’s most successful projects will go beyond simply asking for reasonable sums relative to their respective industries, and gaining traction by using social, online and other forms of marketing and PR campaigns to secure contributor buy-in. The key question that they’ll answer for everyday end-users: How this project will positively impact them, or change their lives at this present time. Once you convincingly answer the questions “why?” and “why now?”, you’ll put yourself in a much better position to succeed.
Getting ahead of current and future competitors can be simple, if you keep in mind that your project’s upsides and points of differentiation must resonate with backers, and be clearly differentiated. Not only will you have to provide value at the end of the process, but also at every step along the way. As many marketing speakers and experts note, keeping a constant eye on campaigns as they evolve, adding eye-catching updates, revising tepid bonuses and improving communications strategies or rewards is a time commitment that can pay off. Successfully address these tasks, and you’ll have already begun building a sizable consumer or subscriber base and stream of capital.
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