Crowdfunding Won't Work Unless You Prove Your Product Can Ease a Pain Point
Crowdfunding campaigns are becoming increasingly popular with entrepreneurs who are eager to get their idea into the marketplace. They’re a great alternative for people who find traditional methods (like finding investors or backers) more difficult, or for those who have products that may not be mainstream enough to garner the interest of a single large investor.
But how do you find success on what is essentially a social platform? Here’s the trick: Combine classic entrepreneurial skills with interpersonal ones.
1. Find a viable means to monetize your pain point.
Fundamentally, what is the point of creating something new? The purpose of creating a new product is to solve a problem and alleviate a pain point. The pain point can be something mildly annoying or something that moves someone to change the world. For a crowdfunded product to be successful -- and for any product to be successful -- people must believe that it can alleviate one of their pain points.
“You need to be able to convey the value of the product if you want them to support your crowdfunding project. If they don’t believe it will work, they won’t back it. You might have created the solution to clean energy, but if people don’t understand it or believe in it, you will never get the funding to make it happen,” says Chalmers Brown, a serial entrepreneur and the co-founder of Due.
While you can choose a project that solves a general pain point, tackling one of your own will help you easily forge an emotional connection with your backers. It’s American Press is a great example. The creator loved coffee but hated the mess, inefficiency and environmental impact of existing brewing alternatives. His personal quest to create a quick, easy-to-clean, environmentally friendly way to brew coffee resulted in a product he was truly passionate about.
2. Find a manufacturer you can work with.
When you begin your campaign, your investors are going to want to know when they can expect to receive the product you’ve made them crave. The only way you can provide them with a reliable answer is to have a manufacturer ready to produce your designs.
Several factors can contribute to the length of time it will take to pick the perfect manufacturer. You need to decide if you want your product built locally or overseas, then find a company with business goals that mesh well with your own. Be sure you can easily communicate with your chosen manufacturing outfit.
According to the phenomenally successful maker of The Core Wireless Speaker, one of the most important things you can do during a crowdfunding campaign is make sure you can deliver on shipping promises. This is only possible if you have a firm grasp of what the entire manufacturing process will entail from start to finish -- and that begins with finding the right manufacturer.
3. The perfect pitch
Most people make decisions from a feeling long before they have a rational reason to do so. This is why your pitch needs to encourage people to have an emotional investment in you and your product. This applies to crowdfunding for absolutely anything including, movies, products, services, music and fundraising. There are thousands upon thousands of other campaigns competing for the support of the very people you want to back your idea.
One of the best ways to do this is with a stunning video pitch. You need to take the time to make sure the video quality is crystal clear, that your story is compellin and that your product shines. Show that you are credible by speaking clearly, outlining the concept and the benefits and demonstrating exactly how it works.
Connect emotionally with a personal story in a way that a potential backer will be able to relate. Finally, talk about why the product is unique. People need to know what you’re solving that will be appealing to consumers.
According to Thomas Alvord of Funded.Today: “We often overlook that Kickstarter and Indiegogo are social networks. It's more than just the product. It's also about the creator, the creation process and being part of a sub-crowd that brings a product to life.
"In business generally, consumers can connect more with a person than with the brand (think Steve Jobs). This is even more true in crowdfunding. Consumers don't have a finished product to analyze in a crowdfunding campaign. Consequently, consumers are also evaluating who the creator is and what type of product a given creator is capable of making, whether they realize it or not.
"Many crowdfunding campaigns are for products that solve pain points that creators themselves experienced, then went and solved. When creators can share their personal story of pain and then their solution, consumers can see themselves in the creators’ shoes and are much more likely to pledge."
The video on the It’s American Coffee funding page clearly shows the journey, the benefits and the creator’s pride in solving his own problem. Anyone who loves coffee will instantly relate and become intrigued by the concept, which is obvious by the fact that the product was funded at 450 percent of its initial goal.
4. Make changes based on feedback.
One of the most important things you can do before you try to crowdfund your product is make sure you have taken the time to have people test and review your product. The Luuup Litter Box was first introduced via infomercial in the 1990s, and it was a huge success. However, as with many television campaigns, it eventually lost traction and went out of production. The original backer for the litter box took the feedback from the original product and, with the help of her son, made improvements to it before launching their Kickstarter campaign.
Having taken the time to examine what went right and what went wrong proved to be an excellent strategy for the Luuup inventor. The project’s initial goal was a modest $35,114, but she raised nearly $400,000 before the campaign ended. Then she and her son took their feedback lesson a step further to make their product even more awesome by adding a spill guard. The advice provided to them (and the extra money they raised) helped them to make the product more effective and in-sync with what their customer base wanted.
This highlights the importance of being flexible and taking consumer and backer feedback seriously. You may have an amazing product, but that doesn’t mean it can’t be even better with a little extra work.
Crowdfunding isn’t easy. It requires hard work and dedication in order to be successful. Case in point: 64 percent of Kickstarter campaigns ultimately fail to raise funding. Even among successfully funded projects, 9 percent will fail to deliver.
Make sure you do the research, learn from other’s experiences, and have a plan for everything. When you put in the work to ensure you can deliver your product, connect with users on an emotional level, solve one (or more) of their problems and are willing to change and improve, you can succeed. Now you just need to get started.