WTF is crowdfunding?

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WTF is crowdfunding?

You can’t swing a lightly inebriated jaguar by its tail without hitting half a dozen crowdfunding campaigns these days. Looking at some campaigns, it seems like it could be the ultimate get rich quick scheme: you dream up a harebrained idea, create a pretty video and BOOM. Make it rain. Except running a successful Kickstarter or Indiegogo campaign is a lot more complicated than that. In this video, we take a closer look at some of the common pitfalls.

Creating a campaign is only part of the battle – pressing the big red “go live” button is the culmination of a lot of work, but what not a lot of people realize, is that creating the campaign is only the start of a long process. In a way, crowdfunding campaigns are mini-startups in their own right.

Crowdfunding can be scary for startups. Instead of operating in the relative comfort blanket of being in “stealth” mode, you’ve shown your hand to the entire world. Your customers know what you’re planning to do, which limits how agile you’re able to be at that point. Your competitors will definitely be following the campaign carefully. Hell, they’ll often back your campaign with a single dollar, to get access to the backer-only updates further down the line. There’s a definite art to it.

You have to figure out a business model, including who your customers are, why they might want to back your campaign and how you are going to reach them. You have to figure out how you’re going to design, iterate and really sell your project.

The crowdfunding page itself is a pretty big project, especially if you want to create a video that really wakes people’s imaginations.

And finally, once the excitement of the campaign itself dies down, it’s time to deliver on your promises. At that point, you’re really hoping that all the math you did up front turns out to be correct. There is no shortage of crowdfunding campaigns that end up shipping $50 backer rewards that cost the company $60 to make.

We looked at hundreds of crowdfunding campaigns and, in the video above, highlighted some of the pitfalls that we see many startups make. But don’t worry; we won’t spoil it all for you. There are still plenty of mistakes left that you can make all by yourself. Hopefully, it’ll get you thinking in the right direction to make your crowdfunding a success.

So that’s a little bit about crowdfunding. If you want to know how to run a successful campaign, let TC teach you in the video below. Good luck!

Featured Image: Igor Samoilik/Shutterstock