The landscape of crowdfunding is quickly changing. New industry specific and niche crowdfunding platforms are entering the market to fulfil the demands of various groups. With ample opportunity to create the next great platform, there remains one question: how does one go about building, scaling and marketing a crowdfunding website?
Identifying the Market
Finding a Niche – Currently there are hundreds of crowdfunding sites in existence and more entering the market every week. There are still thousands of gaps in service throughout the industry and companies are rushing to fill them. To effectively identify niche market opportunities a bit of research is required to understand what the competition is currently offering. New platforms attract campaign creators and contributors by offering powerful features, great design and tailored services.
There are plenty of great examples of crowdfunding sites that offer tailored services to specific groups and completely avoid direct competition with the biggest platforms, (i.e. Kickstarter, Indiegogo, etc.). Cruzu is a excellent example of a crowdfunding website that has been able to corner a specific market and provide an amazing service. This platform provides winemakers with a direct path to the market through crowdfunding and offers contributors with the opportunity to purchase excellent wines at wholesale prices.
Self Hosted Crowdfunding Campaigns – Many crowdfunding websites are set up for the purposes of running self hosted campaigns. If a project has a high funding goal or funding is ongoing then the benefits of building a crowdfunding website to self host a campaign become clear. Some noteworthy advantages of running self hosted crowdfunding campaigns include: control of branding, no middle man service fees*, and the ability to continuously fund projects. I detail some of the benefits of self hosting campaigns in this blog post: Crowdfunding 2.0 (beyond Kickstarter).
Selecting the Software
There are a few options to consider when deciding on how to build and manage a crowdfunding platform. The major options include: custom built solutions, open source frameworks, WordPress plugins, and white label SaaS.
Custom built and open source framework solutions will both take a lot of web development hours to build a customized crowdfunding platform. These options will ultimately end up being pretty expensive endeavors. WordPress plugin solutions will also require web development experience to build and most will have difficulty scaling.
I have discussed the advantages of white label SaaS over some of the options in this blog post: 4 Major Benefits of White Label SaaS. Some worthy benefits to mention are: significantly lower upfront costs, ability to quickly adapt, flexible tools, little to no web development experience required, strong administrative tools, and access to detailed reports.
Marketing
It is important to spread the word about new platforms to the target user base and the crowdfunding community as a whole. There are plenty of effective and affordable ways to advertise a new platform, here is a list of a few popular avenues:
- Google Ad Words
- Create social media profiles, (ex. Facebook, Twitter, LinkedIn, etc.) for the company or organization and actively attract followers
- Purchase ads on social media sites
- Purchase ads on crowdfunding news sites
- Create Youtube videos that advertise the platform
- Interact on Reddit and crowdfunding/industry/niche interest forums
- Promote campaigns that have been successfully funded through the platform
Create a Plan, Budget Accordingly and Adapt Quickly
Most crowdfunding platforms will take a couple years before they have a steady stream of campaigns being submitted and funded. Effective marketing campaigns can even take some time to attract project creators and contributors to the website.
It is important to anticipate the work and time needed to run a successful crowdfunding platform. Building a crowdfunding platform with a white label SaaS; like the one offered by Thrinacia, provides the site owner the ability to bootstrap the affordable monthly subscription payments until campaign funding fees start bringing in a sufficient revenue.
It is important for platform owners to pay close attention to both reporting analytics and industry trends to make effective decisions. Website owners need to know the wants and needs of their user base. There are a few ways to go about gathering accurate information. Site administrator can use analytic reporting tools available in the backend to get a detailed overview of active and finished campaigns, funds being sought, funds raised, user sign up, and so on. Platform owners can also take advantage of the services offered by companies like SurveyMonkey to gain an understanding about which features are working well and which are not by surveying their user base.
Crowdfunding is a young, growing and quickly changing market. It is essential that platform owners stay on top of industry trends. Having the ability to adapt quickly to changes in the market and specific user needs is vital to success of a crowdfunding platform.
*Payment management service provider fees will still apply, (e.x. Stripe charges 2.9% plus 30¢ per transaction).