Ask any entrepreneur what the biggest challenge is that he/she has faced, and the answer will unanimously be funding. Getting capital from investors is not easy. Which is why some startups go the crowdfunding way.
What is Crowdfunding?
Crowdfunding is a capital raising approach where you raise initial capital from not just one source like an angel investor, but a large number of people. Basically, instead of taking a huge debt from one person, you take small amounts of debt from money people. These are the people who are interested in your product or in your niche for certain reasons and are excited to help you because they will get access to the product first and at a cheaper rate. These days a lot of dedicated sites are available to help entrepreneurs with crowdfunding. It can even be plugged through social media.
What crowdfunding is not, is a desperate last attempt to collect capital. It should always be approached with strategy regarding whom to approach and why.
With a targeted marketing strategy, crowdfunding should not be very challenging. Brands like Pebble E-Paper watch, Ouya and Pono Music have raised millions in days through crowdfunding and are live proof of how a good marketing campaign can take you places in a crowdfunded campaign.
Know your target audience: Like all other marketing campaigns, you need to understand who you want to reach out to before you start the process of researching out at all. Understand who would be interested in your product, and then figure out how best to reach them. For example, if your product is a protein supplements for gaining lean muscle mass, you can reach out to gym owners, fitness enthusiasts, athletes, trainers and fitness influencers for your campaign. Once you have zeroed in on the target audience, you can look at similar campaigns for inspiration.
Timing is everything: In order to get the maximum amount of mileage for your campaign, it is important to launch at the right time. For example, after the holiday season, a lot of people are looking to reduce weight. So, if your product is a weight loss supplement, it is good to launch the crowdfunding campaign mid-January when it will get maximum attention from the right kind of people.
Funding goals: set realistic goals about how much capital you are looking at raising within how much time. This goal will help you schedule other activities like designing the prototype, production etc successfully. Follow through on your targets to give your followers a sense of confidence in your project.
With the help of sites like Indigogo, GoFundMe, Kickstarter, Fundable, it is very easy to start crowdfunding campaign. All you need is research, timing and a positive attitude.