TITLE TLDR: Essential Tips For Startups Thinking About Crowdfunding
- Crowdfunding platforms like Kickstarter can provide non-dilutive capital for startups
- Startups should establish a community before launching a crowdfunding campaign
If you’re serious about putting a product onto the market, you’re likely to start thinking about raising funding to get the ball rolling. But how do you go about doing this? External investment through venture capital firms is a common method. It works, but sometimes investors might be skeptical or not understand your product. This is hard to take, believe me, we’ve been there with the Flipper Zero. But luckily, there are other options.
Crowdfunding via platforms like Kickstarter provides non-dilutive capital without giving your precious equity away. It’s a particularly effective way of generating funds if you have a tangible hardware product. It’s perfect to gauge interest, estimate demand on the market and get buyers in immediately. The people of Kickstarter are geeks; they love new and experimental stuff.
Despite the name, don’t think of Kickstarter as the beginning of your business journey. Your preparation should start way earlier if your campaign is to gain the traction it deserves. Like with anything, the more time and effort you put into it, the more successful it will be. Before you Kickstart your project into action, here are some tips on how to lay some solid foundations to give your product the best chance:
- Establish your community first: There is a reason I’ve put this first: it’s by far the most important. It’s no secret that without an audience or buyers, your product will have very little chance of going anywhere. So, let the world know about your product and that you’re going to launch a Kickstarter campaign. Try developing a simple website, make some renders, write an engaging article and publish it on relevant platforms with thriving and engaged communities. This is a great way to gather a loyal audience and gauge their interest, willingness to pay, and potential areas for concern. You’ll also gain an idea of your production costs and minimum order quantity (MOQ). It’s a great way to test ideas out for your project and get any teething issues out of the way. It’s important to regularly update your growing community on what is going on. Try to get onto every platform and media outlet possible and always keep these updated. With regular and honest communication, people will become your fans; they will get excited and eagerly await news on your progress. We recommend also getting a more global audience, particularly through sites like Twitter, where micro-influencers can help spread the word. All this helps to establish and maintain a vibrant community and keep it engaged throughout the whole campaign.
- Keep your community engaged with transparency: When you start preparing for a campaign, the question of marketing soon enters the picture. You can either engage a Kickstarter commercial agency or use in-house production. This is vitally important for your campaign to raise interest and knowledge about your project. The agency is a safe and clear option; the whole thing will be organized for you. However, they might just pour money into advertising and then email leads. They usually have a low conversion rate because your audience won’t remember your company or who you are. So, it’s well worth putting in the effort yourself to build a loyal internal community and potential future fanbase. It’s better to keep your audience informed before the Kickstarter launch through regular updates, monthly newsletter posts, and transparently sharing the various stages of our journey, even failed prototypes! Another key thing is replying to all correspondences across the channels, which makes people loyal when it comes to setbacks. Remember the audience on Kickstarter- they love all the behind-the-scenes action.
