Crowdfunding what you need to know about it?
What is crowdfunding
Like the name suggests, crowdfunding is funding a product, venture, business, idea or concept, via pledges from supporters (aka the crowd).
Often this is done as an exchange by way of a 'reward' for the pledge (eg: first release of the product you are offering, a ticket to a VIP function, etc).
Crowdfunding became increasingly popular thanks to the rise of platforms like Kickstarter which came onto the market in 2009. Thousands of ideas burst forth into the market and were hugely successful thanks to some very dedicated supporters. In fact, on March 3rd, 2014, Kickstarter had over $1Billion pledged in a single day.
Crowdfunding Benefits
The biggest advantage of crowdfunding is the ability to retain complete control over your idea and how it is presented to the world.
Crowdfunding can also be a fantastic opportunity to test your idea in the marketplace and to make adjustments before you have a warehouse full of products.
For you and your followers, it can also be the starting point for building a fantastic community. Your followers who pledge funds to support your idea, are showing their support and belief in you and your dream. Reach out to them, thank them, make them feel super special for showing their support.
What can I crowdfund?
Crowdfunding can be used for almost anything.
Artists, filmmakers, designers, developers and creators all have the opportunity now to reach out to the community and ask for their support to turn an idea into reality. A new creation. A new venture. New product. New Design - the sky really is the limit.
For those of us who own or aspire to own an online business, crowdfunding can be an exciting way to launch a new collection, extend your businesses capabilities, or even develop your very first product.
Now before you run off and set up your crowdfunding campaign page, a few things to remember:
1. It's not about you
A large number of crowdfunding campaigns fail. Why?
The number one reason is that the campaign was all about the creator, and not about the community.
A pledge is your supporters way of saying "yes, I believe in your product and I want to be part of your story" - so you need to make sure you are clear on who benefits from the campaign, why it's important, and why the supporter will care.
Campaigns that provide benefit to the betterment of the world, make peoples lives easier in some way, or contribute to a worthy cause have the best chance of success.
2. 10x your value
There are 1000s of crowdfunding campaigns in the world and almost all of them start with a great idea.
So how do you make yours stand out from the crowd? By providing obscene amounts of value!
Supporters are looking for an opportunity to connect and be part of your journey, but they are also looking to see where their $$$ will have the most impact and go the furthest. Value, value, value!
Take some time to think through and set up highly enticing rewards for your pledges.
The types of rewards you could consider are:
- The first release of the product they are investing in + some simple bonuses
- A ticket to a launch event
- A bundle or multiple copies of your product
- Their name included in the credits or acknowledged as a sponsor
It's worthwhile having a look at other crowdfunding campaigns to see what types of rewards have generated the most interest.
And don't forget, you are giving your supporters the chance to be THE FIRST people to experience your idea. This too is a value-add.
3. Warning: Build it and they will come...
Ah, no!
Just like launching a website, or setting up a Facebook page, developing a crowdfunding campaigns does not end when you hit "go live" - it's only just beginning.
You will need to create a plan that brings people to your crowdfunding campaign consistently and frequently for the duration of the campaign.
Treat your campaign like you would a landing page, sales page or a microsite. Consider all the channels you would usually harness to increase your website traffic (and if you need some tips, check out my free resource here!). Channels to consider are
- blogs
- social
- newsletters
- podcasts
- VLOGS
- interviews
- word of mouth!
And don't forget to make it easy for your supporters to share your campaign with their friends and family.
Generally, most of your campaign pledges will come from the traffic you send to your campaign page. Set up your traffic strategy and give your campaign the best chance of success.
