Crowdfunding is not right for all businesses. Here are five questions for you to ask yourself:
Do you have a social and business network that will back you and be your evangelists during the campaign?
You need to have a wide circle of friends, associates and others that follow you and your project in place well ahead of launching a campaign. You must have at your disposal a social media network as well which means you should be active on Twitter, Facebook and other social media accounts.
These audiences are important in propagating messages about your campaign and creating a ground swell of marketing support that will be needed in getting the word out. If your network is small or non-existent, your campaign will struggle to succeed.
Is your product or offering directed to the consumer market or developers creating products for consumer markets?
If you study the many projects on various Crowdfunding platforms you will notice that the vast majority are business to consumer type projects. Very rarely will you see business to business companies launching a Crowdfunding campaign.
Remember that at the end of the day it is the Crowd represented by people that will make a decision to back a project not a company.
Is your product simple and not complicated – meaning is it simple to explain so the average person gets it?
Overly complex products or services will be a non-starter for a Crowdfunding campaign. If you cannot explain what your offering does in 30 seconds and the average person doesn’t understand what it is and what it does – your product is too complicated. Highly technical explanations or overly complicated products are difficult to get supporters on side.
A Crowdfunding project has to be shareable. If a supporter cannot easily explain your project, it will be difficult for them to spread the word about your project. This does not mean your project has to be simple, but the explanation and descriptions have to be.
Will your product development R&D cycle take months not years?
The tempo of a Crowdfunding campaign once launched is fast.
If done right a campaign can be over in as little as thirty days; therefore if you cannot provide your supporters with instant gratification or in demonstrating your ability to fulfill on the promise in delivering a product with the money raised you should not proceed with a Crowdfunding campaign. Long R&D cycles are a non-starter.
Do you have a working prototype?
If you have a prototype you will have a higher probability of having a successful Crowdfunding campaign. Having a prototype shows supporters that you have done a considerable amount of work developing a product and they can see it as well.
If you don’t have a working prototype than what you are likely offering is an experience to supporters. This could be in the form of an idea or cause. The limitation of experience based project is that they typically do not raise as much money as product based projects.
If you would like a copy of this portion of my Krush™ Campaign Planner please download this free questionnaire and see if Crowdfunding is right for you.