A year ago, Kickstarter launched in New Zealand, and with it came another opportunity for kiwi businesses to funnel our world-famous number 8 wire mentality towards developing new products. Experience has proven that crowdfunding is not just a fad – it’s here to stay!
No longer just for start-ups and entrepreneurs, crowdfunding is a proven and powerful way to introduce a new product or concept to a large audience and engage with them on a whole new level. Having ourselves been involved in both a successful and unsuccessful Kickstarter campaign, we have the unique perspective of knowing what does and doesn’t work.
But first, an explanation. In a nutshell, crowdfunding is about collecting funds online through small contributions from many parties in order to finance a particular project or venture.
Let’s face it; crowdfunding is about so much more than just money. Crowdfunding allows businesses to dream up new product concepts and find out if people are likely to buy them. If your product is desirable, you not only get pre-orders, you also get a group of customers who act as ambassadors and design advisors, thus helping you to produce a product with a perfect market fit.
Regardless of the type of crowdfunding (whether lending, donation, rewards or equity based), it’s essential to get the campaign right. This comes down to telling a great story and making sure you back that up with a few key components. With 43% of all crowdfunding being rewards based, it is the most popular and most applicable for physical new products. However, it does take some effort, so if all you’re looking to do is get a quick buck, you’re looking in the wrong place.
Here are my top tips to make your crowdfunding campaign a hit…
Marketing, marketing, marketing
Crowdfunding, despite what many people think, isn’t a magic cash machine. It’s a powerful marketing tool, pure and simple – if you can use it properly, you’ll reap the rewards.
Crowdfunding is essentially another way of getting your product in front of the market – except in this case; your product doesn’t even have to exist. It’s an investment to find out if your concept is desirable and validate your market – but of course, that does mean you need to make an investment. And what you should be investing in is marketing.
One of the biggest mistakes you can make is not putting enough of an emphasis on marketing and PR during the build-up to the campaign. You need eyeballs, so make sure you have a good following before you launch.
Know who you’re talking to
Like any advertising, you need to know who your target audience is. Be sure that your product’s potential audience lines up with the people who frequent crowdfunding sites.
Likewise, think about which site you should be using. Indiegogo and PledgeMe tend to be more generic, while Kickstarter seems to attract particularly tech-hungry people. It’s really about understanding the people who will buy your product, and figuring out the best way to reach them.
Get the metrics right
In my experience, getting your pricing and funding goal right is absolutely vital when it comes to crowdfunding success. Setting the right price and features for a completely new product is difficult, so it pays to do some preliminary testing of this before launching your campaign, by either using a landing page or running some surveys.
Likewise, you need to set the right funding goal. Ask for enough to ensure that the product gets made, but try not to aim too much above that. If people like the product, then you may receive more than expected, but set the target too high and you are essentially waving goodbye the money people do pledge.
There are huge benefits to crowdfunding – it’s not just a way to raise money, it’s a way to get smarter faster and really know your market.
You will acquire loyal fans who can provide you with hugely valuable insights before it goes fully to market. While crowdfunding may not be right for everyone, it’s another great option for getting new products off the drawing board.
Don’t be afraid to back yourself – do your research and get the word out there well before you launch your campaign. With the right idea and the right preparation you could be the next big NZ crowdfunding success.