Crowdfunding is hitting the popularity charts with more and more people applying the thought in their projects. Latest in the list are Dr.Phil Windley and Stephen Fulling, serial entrepreneurs who launched an online campaign at Kickstarter for a project called Fuse. Fuse is a device with in-built GPS and cellular modem for channeling data from the vehicle to a personal cloud. It may be applied to map the car route or to ping a rider if you are near to him. It manages fuel economy by alerting the fuel fill-in time and location. It also apprises the owner of the maintenance needs by accessing the engine code.
But, for Dr. Windley and Fulling, crowdfunding is not just about a funding the project. In fact, Kickstarter also turns out to be a medium for marketing and public relations to popularize company’s technology component. Although the funds raised through sites like Kickstarter are trivial, when compared with the traditional means, the attitude of the people regarding the product is exposed. It gives them a feel of the market they are trying to enter into.
According to Social Media Today, Kickstarter raised $786 million for different campaigns (September, 2013 figures). As of today, many entrepreneurs depend on crowdfunding without taking into account the risks involved. To that effect, while 56% of the projects failed to get funded as they fail to attain the goals; another 10% did not receive even a single contribution pledge. But, what these campaigns still produced was some useful market research and insights from the general public about why these ideas didn’t click!
What all should you take care of while facing the crowd? Below are some of the expert suggestions to muscle the marketing quotient in your crowdfunding campaign –
- Keep the project description vivid, concise and affable
- Highlight the potential success attained through market research study or by past sales
- Offer compelling gifts to the investors and donors
- Remember that some crowdfunding websites, do not allow you to retrieve funds unless you succeed in your goal
- Note that if your ideas can be easily duplicated by others, then crowdfunding may not be a good idea. As a counter-measure, you may register a provisional patent for your product.
- Know your target customer. If you target other businesses [i.e. a B2B product], then the likelihood is that the crowd may not be excited about your product. Crowdfunding may not work here as most products or ideas suited to mass interest are a hit.
- Crowd prefers to fund relatively lesser complicated and low capital projects. Even for projects not requiring prolonged R&D, crowdfunding seems to hit off well.
[Do you too intend to or suggest use of crowdfunding as a part of the Marketing and PR campaign? Comments invited.]