Unless you’ve been living under a rock recently you will have noticed a big shift in the world of funding for start-up ideas; Crowd Funding.
In 2012 alone, new projects, companies and inventions raised more than 2.7 Billion dollars. It’s free to sign up and if you have an awesome new idea then the world is truly your oyster. People can log in and pledge anything from just $3 to $10,000 to be a part of a start-up’s success. In return they can get a “reward” which can be anything from a thank you to a dinner with the team and first beta versions of the product. The crowd funding platform takes a commission of anything between 4% – 9% and the rest is for you to use to get off the ground.
Marketing Your Project
As with any online venture having a sound online marketing plan is crucial to the success of your project. While many projects exceed their financial target, over 43% still fail to reach the set budget and receive no cash. So don’t expect to open a Kickstarter or Indiegogo (or Bloom VC in the UK) account and suddenly become the next Amiigo or Pebble Watch, which raised $10.2 million despite only needing $100,000 to launch its product.
Do your Research
You get to pick the duration that people can pledge on your project. Project length can vary depending on the platform, whether its Kickstarter, Indiegogo or the UK versions Pleasefund.us and Bloom VC. That said this should be the final stage of your marketing plan for any of the above.
Research the category of your project and analyse in detail similar projects. Areas to look at include, but are not limited to:
1) Length of funding campaign.
2) Best performing platform.
3) Social media presence of successful projects prior to launch.
4) PR prior to launch.
5) Set your target too low and people won’t expect you to deliver something amazing. Set too high and people are put off to pledge as the target may not be achieved and thus they do not receive their reward.
6) Updating your campaign, keep it fresh and keep people informed. They are more likely to share your story if you make them a part of it.
7) Projects with a video and plenty of photos always get funded more than those who skimp through.
The number one key prior to launch is to do your best (or hire someone) to create a buzz online and build an audience who are already on-board with your idea. Utilize the best platform for your project from Facebook, Google + to Twitter or Instagram. Don’t waste your time trying to be a jack of all trades, pick one or two platforms and get social. Also, highly targeted social media adverts and sponsored stories work well in the early stages.
At Marwick Marketing we are about to launch Sensoria which aims to raise in excess of $87,000 to launch their new Smart Sock which tells runners how well they run (as well as the normal metrics of a fitness tracker).
Wearable technology is worth 4.6 billion dollars a year and is one of the fastest growing sectors on the planet. As three former employees of Microsoft they have decided to raise capital through crowd funding.
What do you think to crowd funding? Have you ever pledged on a project? Let us know below in the comments.