Can You Launch A Crowdfunding Campaign?
Launching a crowdfunding campaign is now a mainstream channel of funding for a new startup or product line. Although it’s entirely possible to put a new product up on a crowdfunding platform like Kickstarter and to gain viral traction to the point of surpassing the campaign’s goal, many of us don’t want to hedge our bets on possibly going viral.
Viral is not a reliable strategy.
For those who want to know for sure if they can launch a successful crowdfunding campaign, here are the core requirements your startups must meet to even be eligible to use this channel.
You Need An Existing Audience
To start, there’s one pre-condition that’s required for a successful crowdfunding campaign and that’s an existing audience. It’s largely assumed that crowdfunding campaigns possess a low barrier to raise capital and that anyone can raise a ton of money through crowdfunding, but that’s the not the case at all.
Successful crowdfunding campaigns require an existing audience to broadcast to. The idea of “build it and they will come” does not work in crowdfunding. Every successful crowdfunding campaign you’ve ever witnessed understood this fundamental principle and built a strategy around engaging its existing audience.
Raising money withoutan existing audience is a serious gamble.
No matter how great your idea or product is, interest in the product/idea itself is not enough to get strangers to buy from you.
How many times have you come across a cool product on Kickstarter and not purchased it? Probably more than the times you’ve purchased a random product on Kickstarter.
If your startup does not have an existing audience, that’s ok.Thankfully, many of us possess an existing audience through friends and family. Whether this audience will help kick off the campaign by raising the first grand, or will join your campaign’s advocate network (see below), you need to rally an audience.
You will definitely have some strangers contribute to your campaign, but it’s much more likely for them to contribute when they see that others have already bought in, rather than when they see that $0 on the fundraising ticker.
Build An Advocate Network
Wouldn’t it be great if there were 20 of you fundraising for your crowdfunding campaign at the same time? If you alone can raise $1,000, you would easily hit $20,000 if there were 20 of you fundraising.
This is the concept behind building an advocate network and why it’s such an important strategy to drive fundraising for a crowdfunding campaign. Raising money for a crowdfunding campaign needs to be viewed as a tree where each dollar can be sourced back to a major branch of that tree, or in other words an advocate.
It’s hard to hit large numbers for a crowdfunding campaign unless there are multiple people asking for money. The less branches there are, the less fruit your tree will bear.
Again, your advocate network will have to be built from an existing audience. The audience members that would qualify to be an advocate are your superfans who absolutely love your brand and are excited to share it with people in their network.
Whether this is the customer that buys your product multiple times a year, or your mom who loves everything that you do — you need people who will sing your brand’s praises to their friends and family.
A fundamental truth is that when it comes to asking people for money, whois asking for that money is as important as (a lot of the times more important than) what they’re selling. If your best friend asked you for $20 so that she can hit her $1,000 crowdfunding campaign goal, would you give it? Most likely yes.
If a stranger asked you for $20 so that they can hit their $1,000 crowdfunding campaign goal, would you give it? Probably never.
An overarching strategy needs to exist to engage your existing audience and to find 20 advocates who will help you fundraise. Rallying this many people is not easy and requires strict timing and coordination.
There are plenty of resources out there that explain the psychology behind weekend-long vs. month-long campaigns to prompt fast action, and how to facilitate strategic courtships to bring advocates onboard for your campaign. To add to this, there is strategy also required to continuously motivate advocates during the rollout of the campaign, especially when you need a final push to the finish line.
To build a successful crowdfunding campaign, make sure that you possess an existing audience, can locate advocates, and have a strategy to string all of this together in a coordinated fashion. Study up on the best practices in crowdfunding timing and planning and get your campaign out there.