There has been an explosion of crowdfunding websites over the last few years. When exploring the surface of this topic, some natural questions come to mind; such as, are all of these crowdfunding platforms really necessary?
Crowd Unite compiled a list of the top 10 crowdfunding platforms based on user reviews. Niche market platforms took the top four spots with Kickstarter ranked fifth. When digging deeper into the services offered by many of the niche crowdfunding platforms it becomes quite evident what the benefits are.
Tailored Service
Crowdfunding platforms that concentrate on an industry or niche market have the ability to tailor their service for a specific group. Cruzu is an excellent example of how an industry specific crowdfunding site has tailored its service to meet the needs of funders and contributors. Cruzu connects wine makers with consumers in a way that is beneficial to both parties.
“It is time that wine got its own platform – a network & logistics service that directly connects winemakers and wine buyers to create a new type of wine experience that enables winemakers to not just sell directly to consumers, but also to share their world in a way where we can know them. Bonds are created, trust is created, and over time we just want to buy wines from people we know. And here’s the kicker: consumers pay 25% to 50% less than they do now.” ~ cruzu.com
Niche crowdfunding platforms like Cruzu are not only disrupting the industries and markets in which they operate, they are also disrupting crowdfunding as a whole.
Close Knit Communities
There is a reason that New York City, (population: 8.5 million) has been described as one of the loneliest cities on earth and just two hundred miles away, Hamilton NY, (population: 6.6 thousand) has been voted as one of the friendliest towns in the United States. Small towns can offer a kind of community that does not exist in larger cities. Kickstarter is the New York City of crowdfunding platforms. Kickstarter supports a diverse number of industries and has been visited by millions of people; however, Kickstarter does not have the same community support that many other smaller more focus crowdfunding platforms do.
Niche crowdfunding platforms tend to focus on a common interest that their users share. As a result users tend to be very supportive and contribute to more campaigns. Campaigns are able to feed off of the popularity of one another rather than just competing head on.
Campaign Funding Success Rates
It turns out that many niche market crowdfunding sites have a much higher campaign success rate when compared with Kickstarter. Pubslush for instance is a crowdfunding site that is dedicated to connecting the writing world to readers. An independent third party found that 58.89% of publishing campaigns are able to reach their funding goal on Pubslush. When you compare this to Kickstarter’s publishing campaign success rate of just 32.12% the difference becomes clear.
Seed&Spark is a niche platform that is focused on crowdfunding for films. On Seed&Spark film campaigns have a success rate of 69% and raise an average of $14,700. Now compare that to Kickstarter’s campaign success rate for film of just 40.2% and average funds raised of $12,878.
Tailored user experience and the strength of the community support on niche market and industry specific crowdfunding platforms increases the success rate for campaigns. White label crowdfunding SaaS that is offered by companies like Thrinacia have made it simple for anyone to make a unique and flexible crowdfunding platform with no web development experience required. Given the simple but powerful arguments for why niche platforms are so successful there seems to be ample opportunity to capitalize on different crowdfunding markets.