This week, I’ve spent a lot of time trying to understand the best practices in crowdfunding. With so many platforms out there, it’s hard sometimes to decide which one is best for your campaign, as well as, what can you do to put yourself in the best position for success. From that research, I’ve decided that these are 3 important questions to ask before crowdfunding.
1. Is your service, product or program best funded through a crowdfunding marketing campaign?
As I’ve shared before in this blog, I’m personally gone this route because I was concerned that if I brought in private investors for the initial cost of production (over $200k), that I’d have to give up too much equity at this point. This puts my company’s social purpose at risk as the more equity I lose, the less likely I can control how we make the products (i.e. recycled plastic in Australia which costs more to do).
Furthermore, from the three products that I have designed, I chose to Product #3 – my Escape No More product for the campaign. This product creates a temporary barrier to prevent a pet from escaping through a door or passageway.
Even though it’s most expensive product for me to manufacturer, I specifically picked this product for this campaign because I thought that it was the easiest one to explain with the most potential uses for a pet owner.
For me, the crowdfunding platform is a way to pre-sell and market-test my product idea before investing anymore into it. If it succeeds, I could also be building great marketing momentum for the next order, as well as investor interest.
2. Do you have enough financial backers willing to support the campaign to at least start it properly?
I’ve probably browsed hundreds of unsuccessful campaigns in my research that didn’t even have $100 in pledges when they ended. Some of them had obviously spent a lot of money in creating the videos and product/service ideas though. How could they fail if they had a great product prototype and video?
Well, nobody will support a product they haven’t heard about. Furthermore, it makes you wonder if the product actually solved their problem or fulfill a need?
Too many times I’ve spoken with inventors, idea people or techies that don’t want to do the work to sell the product. They only want to make it. Therefore, I suspect that these particular campaigns with few or no backers are either bad ideas or the products were made by those that expected the platform to do the working of selling for them. In reality, the platform is only a tool.
3. Which crowdfunding platform best meets your needs?
This has been the most time consuming question for me. I know that I have the right kind of product, and I believe that I have a lot of people that are interested in backing it – at least I have a really large network that say they are interested at this point.
However, picking the right platform required a lot more research. If I think about a crowdfunding site as only a tool, then the bigger, more popular sites like Kickstarter and Indiegogo have the best set of tools as far as I can tell.
This includes the way you initially set up the campaign with embedded videos, pictures and links. Furthermore, they tend to have more ways to communicate with your donors. I especially like the extra set of tools that Indiegogo has to place add-ons during the checkout process, as well as a referral system that might be useful mid-way through my campaign.
One of the areas that I think is quite important is the way that it shows currency and shipping costs – especially if you plan to open the campaign to more than just your home country. A lot of people are turned-off of buying something that doesn’t easily translate into their local currency on the homepage, and even more will back away during the check-out process if the shipping cost comes as a surprise.
I’ve also found at least one site where there wasn’t a way to add shipping easily to the check-out process. The owner of that campaign will have to contact each backer individually afterwards if it’s successful. Seems too painful to me especially when it’s built into other platforms.
While I’m still a month away from launching my own campaign, I still think these early insights and 3 questions before crowdfunding are worth sharing now.