By Matthew Beck,
Start Up Consultant, Business Strategist , Author & Entrepreneur
What is Crowd funding ?
The concept of crowd-funding is easy.All you have to do is fund your project by going to the internet and asking large numbers of people for a small contribution.
It seems all you have to do is to register with a platform like Kickstarter or Indiegogo, fill in some simple screens, upload your video and wait for the cash to come in. The sad truth is 60 % of all campaigns do not reach their goal and are not funded.
In order to be successful, at least 6 months preparing for the launch is needed. Networks need to be developed with potential financiers who are enthusiastic about your project while being in a position to quickly back and accelerate the project throughout the crowd-funding campaign.
Backers and potential contributors will need meaningful updates to keep enthusiasm high.We recommend writing blogs ahead of time to have on hand, which can be inserted at low points in the campaign to boost morale, support and funding.
Stakeholders want to back a project that is going to be successful. Everyone likes a winner. When high numbers of backers pledge large dollar amounts sponsors are reassured the project will be funded.
The product must be of the highest quality. Benefits need to be clear. The audience has to be carefully chosen and social media has to be inspired in order to maximize the chances of success.
After careful analysis of the product and building a network of enthusiastic supporters perks should be offered to inspire and convince the audience to donate. In the film industry a perk may be that actors drink Coke or Pepsi if funds are provided for this right or the lead actor wears brand name clothing from a donor in exchange for support.
Other common perks include the naming rights or memorializing an important friend, supporter, backer, investor or family member. Corporations seeking brand awareness many benefit from naming rights and are an important source for funding.
Main Reasons For Lack of Success
There is no market for the goods and services on offer.The product has no demand.
Ignorance of regulatory environment. Issues of safety or legality.A legal threat is probable. Product has no longevity.
Design issues related to under resourced and over engineered.Issues of quality predominate.
A prototype was never created.Form and function are not gauged in conjunction with appeal.
The new product is commonplace with little added benefits for the wider population.
The features and benefits are not clearly explained in an engaging way that holds the listener’s attention.
The item can be readily found in the big box stores under competing labels.
Competition is fierce, established and strongly branded.
Success depends upon introducing new products that resonate with the target market using clear simple language in an engaging manner.The regulatory environment cannot be understated or ignored.
The creation of a successful prototype that is well designed will go along way to attract backers in the initial stages of the campaign.
Positive interactions with the new brand spurn new brand ambassadors to enlist supporters.
Nullify competition with niche marketing.
The price is too high and crushes interest upon review.
Lack of branding has not established a perceived value for the price offered.
Roll out is flawed.Pricing strategy has not covered costs.
Pricing strategy has derailed distribution.
Quality is an issue and the price is not competitive for the items on offer.
Pricing strategy has to be carefully thought out with keen attention to the competitive environment the business operates in. Price must be high enough to produce adequate margins to generate a profit before taxes.
- Failed to network and assemble a crowd.
- Project is not suitable for crowd funding.Promotion is amplifying a doomed product.
Goal was too high.A lack of backers is obvious and interest is severely waning.
Bad landing page.Titles are not eye-catching.
Boring pitch.A dry business format should be avoided.
Lack of creativity.Marketing efforts resemble a bootstrap campaign with no budget.
Lack of innovation,effort and dedication to the cause.
Audience is misunderstood.Demographics are not defined.Medium is poor for the target market.
Lack of excitement.Not enough supporters are on board with the campaign.
Backers are not engaged.A lack of updates is the hampering engagement.
Can’t set yourself apart from the others.
Perks are token and meaningless. The rewards are insignificant and not tangible,
A clear lack of planning is obvious.
In conclusion there are many failure points . The worst of which is lack of planning, poor product development and lack of crowd building.
Success depends upon careful research and a complete understanding of your target market.