Cost is cheap
When creating a campaign to showcase your idea to the world, your out-of-pocket costs are nothing. Crowdfunding platforms make money when you make money, so there are no upfront costs. In fact they want you to be successful because the more you raise, the more they make and the better their reputation (so more future users). Most crowdfunding platforms even supply you with a template to fill out helping you create a compelling story for potential backers.
If you have a small budget, then there are plenty of third-party services that can help you create your pitch video, advertise, create your story, take product photos--really anything that you can think of. In a future post I will explain some of the resources available to you.
Fees are applied to the back-end of the campaign normally a 4-6% fee if successful. Some will even charge a higher percentage if you are unsuccessful. But these fees are easily managed as you bake them into your forecasting figures and fundraising goal.
View pricing details on top two crowdfunding sites
So what are you waiting for? Get started. Your only cost is to not move forward with your campaign.
Exposure is high
Crowdfunding is simple and powerful when it comes to exposure. It used to be that you had to present to a small group of individuals (bank managers and investors) to be awarded financial backing. The presentation may go well or it may not depending on your energy and the enthusiasm of those listening. Worse the presentation would have to be presented over and over and over again to various parties of interest.
Today crowdfunding has replaced the PowerPoint. In fact it has completely rejuvenated the business plan. Your elevator pitch is the campaign tagline and the executive summary is the video. The rest of the page takes the viewer along your journey from idea to prototype to current state requiring their help. You are poised to drive traffic to your campaign and convert them into backers. For large crowdfunding platforms you can benefit from large amounts of traffic browsing the site's projects, especially if that site features your campaign on it's homepage.
Niche or mass marketing
You specify the community that best fits your project such as photography, design, education, publishing, etc. It is important for you to accurately categorize your project as some platforms only allow you to select one. You want to make sure that your campaign is relevant to the people viewing it. Crowdfunding places your idea in front of a niche market (or at least a focused area of interest). However, with the rise in crowdfunding popularity entrepreneurs are finding it increasingly difficult for their campaign to stand out from the thousands of others--even within a category.
This is where you will need to choose the proper crowdfunding platform. The big platforms, Kickstarter and Indiegogo, are very large but don't cater to one specific genre like charities or startups for example. The more specific platforms will have less overall traffic however they are more likely to be enthusiasts and subject matter experts.
Find the right crowdfunding platform for your product launch or idea
Crowdfunding is a fantastic way to test your ideas. As discussed above the cost is low and the exposure high and you can even place your product or idea in front of a targeted audience. At this point two outcomes are possible: you meet your goal with a successful crowdfunding campaign or you don't. Both of these are successful outcomes.
If you reach your goal you can make the case that there is a certain market for your idea. If you exceed your goal then you may be on to something really valuable to your market. Your communication to backers does not expire with the 30 day campaign. You continually send updates several months post-campaign. This is an excellent way to gather feedback and tweak your strategy and improve your product. And again all of this is at no cost to you.
For those who do not meet their goal amount don't worry because you probably just learned a lot about yourself, your network and most importantly your idea. At this point you need to ask yourself why. If you had trouble getting the word out revisit your networking strategy. If the product just didn't generate interest don't take it personally but do look into why. It may need to be remarketed or even altered.
Three things to do before you launch your crowdfunding campaign
After you identify the root cause of each setback plan a way to address it. Then relaunch your campaign. I have spoken to many entrepreneurs who were successful only after a failed first attempt. When crowdfunding your product launch you really don't have much to lose only much to gain.