The world of entrepreneurship is an exciting one. It involves a roller coaster of emotions, more failures than successes, and the constant worry of whether or not you’re moving in the right direction. This world is definitely not for the faint of heart. But, it’s not without its rewards: the thrill of seeing your idea become something tangible, the satisfaction of bringing solutions to people’s problems, and the courage of overcoming great challenges. It’s a world of opportunities, risks, and challenges. But more important, it’s a world of passion, dreams, and creating.
Up until recently, this world was limited to only those who could afford it, while those with no access to capital could only keep their idea tucked away in the confines of their mind, with no chance of being realized. Fortunately, technology has an abundant ways of breaking barriers and leveling the playing field in several instances. Access to capital is now one of them. Rewards-based crowdfunding has become a major success these past few years, and the current trend is only going up. People who normally could not have access to money to jumpstart their business now have access to online platforms that give them the tools to raise the capital needed to make their idea a reality.
While speaking about Indiegogo, Richard Branson, co-founder of the Virgin Group, made a comment recently that applies to crowdfunding in general. He noted , “As a young entrepreneur, I had the same trouble getting funding that today’s innovators, artists, and humanitarians face—except they now have Indiegogo, which I certainly would have tried.” While crowdfunding is typically connected to raising capital, it has a couple of other perks as well.
Crowdfunding is a wonderful, low cost marketing experiment for your product or idea. It’s a great way to validate your product and potential market, while testing it in a safe environment. Danae Ringelmann, co-founder of Indiegogo made this comment: “There is not a better indication of the market than people actually voting with their dollars. It is so much stronger than any Facebook Like button or focus group could ever provide.”
Investing from customers has additional perks. MD3, a maker of 3D printers, attributes success in finding retailers to crowdfunding. “If we had raised that amount of money from investors, rather than customers, we could not have gotten major retailers to carry us, because their inventory requirements are prohibitively high. A small company would have to hope that the retailer wants the product so badly they would pre-order and invest to get it on their shelves,” said co-founder David Jones in an interview.
And if anything, crowdfunding becomes a great advertising tool. For example, Josh Wise went from an unknown NASCAR driver to internet fame because of crowdfunding. Same goes for Oculus Rift, as it gained a very large following due to its crowdfunding campaign, which ultimately led to its buyout by Facebook. Even the backlash that ensued from the events that took place attracted more publicity for the budding company.
Crowdfunding may not always be the go-to for everyone’s business idea. However, it has opened up the opportunity for many ideas to become a reality that may have never come to fruition otherwise. Even if you don’t have an idea you’d like to bring to market, you can still be involved by supporting others. There is something to be said of supporting someone else’s dreams and aspirations. It’s a wonderful feeling to contribute to a crowdfunding campaign you believe in. It’s great journey, as you receive updates from the campaign owner(s), get to share their excitement and enthusiasm, and hear them express their humble gratitude in realizing that they are reaching a larger audience than they realized because of you.
The entrepreneurial spirit is a spirit of creating, a spirit of overcoming. Crowdfunding helps capture that spirit. I recently came across a quote that summarizes crowdfunding appropriately: “It is a way for every creative person to control their destiny.”
Go capture that entrepreneurial spirit!