Kickstarter, Indiegogo, and other crowdfunding platforms continue to attract all kinds of attention from consumers and inventors alike. High-profile successes like Solar Roadways and the Pebble Time smartwatch have made a wildly popular Kickstarter campaign into a kind of Holy Grail: everyone wants it, but not that many people will achieve it.
However, you don’t have to achieve 500 percent funding in order to call your product funding campaign a success, right? There are many products that do meet their funding goals through crowdfunding, although they may not attract the media or consumer attention that others do.
In the end, crowdfunding is just like any other type of fundraising: you have to take a good look at yourself and your product in order to decide whether or not it’s for you. Here’s a brief rundown of a few of the pros and cons of crowdfunding.
It’s one of the most effective ways to reach a whole lot of people early in your product’s development.
The great thing about crowdfunding campaigns is that you can set them up at any point during your product’s lifecycle – including before you’ve even created a prototype (although we don’t really recommend this).
If you have a great idea that you think the world needs to know about, you can set up a campaign in a matter of days, share it with your social media followers, and suddenly you have a potential audience of thousands.
You can find out how many people want what you’re selling before you actually order the parts.
Estimating how many units of product you’ll sell can be one of the hardest parts of taking your product to market, especially for first-time product developers.
With a crowdfunding campaign, however, you can pre-sell units. This way, you know exactly how many people want to buy your product, allowing you to make a more accurate estimate of what your demand might be once the product is actually for sale to the wider public.
Avoid going into debt (or at least, as much debt) in order to create your product.
If your choices are funding your product yourself and trying a crowdfunding campaign, the answer looks pretty obvious: why not try crowdfunding? You don’t have anything to lose except time, and you’ll get helpful information about the market’s interest in your product either way. If the project fails, maybe your product needs tweaking. If it succeeds, then you’ve got the money to get to work. You’ll also have the money in your hands within a few weeks.
Not everyone, or every product, is made for a crowdfunding campaign.
Experts tend to agree that the most important part of a successful crowdfunding campaign is a great video. This is not something you can put together in a day, upload, and be done with.
If you’ve never made a video and decide to try your hand at it, the amount of time that it takes to create a good one will probably blow your mind. There’s a reason movies take years to complete. If you’re not comfortable on camera or you don’t have much in the way of a product that you can actually show people, the video portion can be pretty difficult to do well. And some products just simply don’t translate well to video.
But if you’re really committed, that’s no reason not to start a campaign. Just be aware that you may have to work on your on-screen presence, or perhaps wait until your product is a little further into its development to start that campaign.
You have to commit to your backers – and their questions, comments, etc.
Crowdfunding may seem like an incredible way to convince people to give you tons of money, no strings attached. And while it is, no doubt, a revolutionary concept, it’s not true that most people will give you their money without expecting something in return.
You can cover this to an extent with your perks and rewards, of course, but you also have to be ready to stay engaged with your backers. That means posting updates as often as there’s something to tell, staying active on social media, and just generally showing your backers that you appreciate their generosity.
Still deciding what kind of funding model is best for you and your product? Read our post “Three Ways to Fund Your Product Idea.”