You’ve probably heard of them: Kickstarter, IndieGoGo and GoFundMe. In the past few years, these websites have become huge proponents of getting those who have good ideas and no money the capital to get their products and services off the ground. This phenomenon is known as “crowdfunding” because the money raised is from a number of different investors. Products that have been launched using these sites run the gamut from map-creation software to a device that can fill a hundred water balloons at a time, and everything in between.
So, what can crowdfunding do for your business ventures? Successful crowdfunding campaigns don’t just happen, so it’s important to know what you’re going to have to invest to make one profitable.
Do It Right, and Take Your Time
Crowdfunding isn’t something you can learn all about overnight and make successful the next day. One of the first things you have to do is research, research, research. There’s some powerful information out there about which tactics are best when it comes to raising tons of money, and which have flopped in the past for many companies.
Secondly, it’s important to have a long list of people who might support your campaign. Even if you haven’t spoken to someone since high school, they’re still a potential for your list. Friends, family and business connections can all help make your campaign successful by not only contributing, but by sharing through email and social media. In addition, if some of the contacts on your list are bloggers, even better; word-of-mouth advertising is very powerful and, in many cases, entirely free.
Thirdly, don’t skimp on the updates. Most crowdfunding platforms have a way to update your supporters en masse, and it’s important to use that tool to make sure everyone’s on the same page. Plus, being in someone’s inbox every week creates top-of-mind awareness, furthering your reach. When someone asks one of your supporters about a cool new product or service, and they saw your email that morning, they’ll probably think of you.
Make Sure Your Product/Service and Your Goals are Clearly Defined
It seems obvious to a lot of people, but not having clear goals and definitions of what you’re offering is a serious offense. You have to tell your audience exactly what you want to do, and you have to know yourself. Is this just a side project where you need a few thousand dollars, or is it a full-blown life-changer that needs more funding, but which you’re willing to devote your life to for the next two years? Those things matter, and they’re important to communicate so everyone knows what to expect. This is especially important when telling your potential investors what a product can do for them and how it can make their lives better, as this is what will get them to contribute to your campaign.
Finally, Don’t Be Afraid to Spend a Little
Spending money to raise money seems a little counterintuitive. However, your campaign is an investment, and sometimes it’s critical to throw down a little cash to make it successful. Sometimes this means spending money on ads, and sometimes it means hiring a professional video editor to ensure that the highlight of your campaign—displaying how your product or service works—is appealing to your target audience. Hiring someone who can develop the brand or help with PR work is also worth the money, if you think you can afford it.
Crowdfunding doesn’t have to be complicated, but it does require a little research, clear goals (for you and your audience) and a little investment on your part, whether that’s time or money. However, you can successfully launch a product with crowdfunding as thousands have over the past few years, so don’t be afraid to give it a shot.