Crowdfunding is a great way to get funding for your project or idea and bring it to the real world. But this is not the only purpose of crowdfunding. This article will discuss some of those other advantages and provide an outlook for those that want to run a successful campaign.
Understanding Crowdfunding
Let’s start with what a crowdfunding platform has to offer. If you are not already aware of the different crowdfunding platforms, the most popular at the moment are Kickstarter and Indiegogo for rewards based crowdfunding. When it comes to only donations for charity campaigns, GoFundMe is the most popular for this niche. Before you begin crowdfunding, your first decision is to choose the platform. Be aware that the platform can help open your campaign up to their community, but this is not guaranteed. Many new campaign creators make the mistake of not doing enough pre launch marketing before they launch on the platform. It is only guaranteed for the most successful campaigns to be featured on the platform. This means that you need to acquire the majority of your backers from outside of the platform.
An Alternative Outlook on Crowdfunding
Try to think of crowdfunding as a test. The idea is that you are not only looking to raise funds for your project but, you are also understanding your market and who your customer really is. You might find, like with many campaigns, that it is not successful. This is not the worst thing in the world. What you are going to discover, is what the real world thinks of your idea.
Crowdfunding is basically a litmus test in the real world for your idea. It allows you to spend the most minimal amount of money in order to see if people will purchase the product or services that you would like to offer. The crowd will let you know what they believe is valuable by voting with their money. Even if the campaign does not work out, you can get a better understanding of what you are offering and gather a list of potential buyers in the process. You should seek to understand what the market wants. After all, this is basically a marketing campaign, and marketing campaigns are made to better understand the market. So even if you fail to raise the funds that you’re looking for, you can still gain insight from the crowd in order to make the necessary changes for a better business. The campaign can be better used as a way to collaborate with your audience.
If you can get your audience to feel as though they are helping with the overall product such as feature suggestions and others, this will allow you to build a loyal customer base. The more that people feel they are a part of a project, the more they will promote it for you.
How do you give your backers ownership without equity?
It is hard to find a balance between keeping the equity of your company, while also giving your customers the feeling of ownership. Campaigns on Kickstarter are only offering rewards to their backers. This should be enough if you do not want to give equity away. There are lots of perks you can provide to the backers that will give them a sense of ownership such as exclusive chats, dedicated pages on your website, exclusive merchandise, and more. What you want, is to harness the power of the crowd. You can give them a sense of ownership, and also ask what they would prefer to have, rather than just give them your idea. This way your idea can have something incorporated through the crowd or even pivot the product/service to something that is more useful for the crowd. This is ultimately what you should be looking for.
Keep these ideas in mind when you are building and promoting your crowdfunding campaign. Success does not come easy, so this may help provide an alternative outlook when you are running your campaign.