The Leading Edge
Crowdfund Your Next Product
Crowdfunding has been around awhile and it’s still going strong. It’s well worth looking at if you are wondering how to fund a new product line, get some advance sales, or even if you just want to do some market research.
What is crowdfunding? Well in its simplest form it’s where a company, or individual puts a video up on a crowdfunding platform and encourages people to support a product or a project in return for rewards, or pre-financing (usually in the form of pre-purchase).
Often you will also see equity investment, venture capital, charitable donation, and peer to peer (P2P) lending lumped in with crowdfunding, but in pure terms these are not what crowdfunding is all about. In this article we will focus on using crowdfunding to help launch a new product by offering rewards, or soliciting advance orders.
The Kickstarter crowdfunding platform is the most well-known and largest. It boasts over $3 billion in pledges to date funding 124,447 projects through 12.8 million backers, 4.1 million of whom were repeat backers. All this accounts for almost 38 million pledges. A word of warning – Kickstarter works best for people who create something new – if you have something innovative this might be a good place to start. There are lots of other platforms, so search around and see which one fits your needs best.
So, how do you get your share of this money to support your business? As with anything that seems too good to be true, crowdfunding is not easy, but it is possible to raise a lot of money if you do it right.
For instance, Flow Hive: Honey on Tap Directly from Your Beehive, a campaign on the Indiegogo platform raised over $13 million USD (17,380% over their target) for their unique method of extracting honey from beehives that was both easier on the bees and on the collector.
Now, stories like this attract media coverage but for every one of these there are several hundred that don’t even reach their revenue targets. All the same, if you do it right this can be an excellent way to raise money, get feedback, achieve advance sales and ensure your product launch gets noticed.
Launching a crowdfunding campaign requires a lot of work and books have been written on the topic, so in this article we’re simply going to provide an overview, give you some tips and urge you to research, research, research what other companies have done successfully, and not so successfully, on a bunch of crowdfunding platforms.
What are the benefits of Crowdfunding?
How does Crowdfunding work?
What people do wrong
As you can see, there’s a lot to consider when launching a Crowdfunding campaign. The overall key to a successful campaign lies in the planning. Research the various platforms extensively and understand how they work. Look at what types of campaign are successful with each. Look closely at successful campaigns and see how you can adapt what they did to suit your product or project.
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