In this episode, host Nalin talks about if your project is right for crowdfunding and how to decide if your project is right for crowdfunding. She shares her tips to determine if your project is right for crowdfunding!
– [01:14] Crowdfunding is one model to get your product to market, but it’s not really suited for everything out there.
– [2:30] You must first decide which crowdfunding you’re looking to launch on. Is it rewards based? Is it a personal expense type of crowdfunding? Etc.
-[3:46] Another thing you need to consider determining if your product is right for crowdfunding, is what the main demographic is for your audience.
-[7:50] People who come to crowdfunding are early adopters. They are looking for things that are new and novel. They want things that help solve their problems and pain points.
– [9:50] Usually when someone orders online they expect to receive their product soon, with crowdfunding people are bringing their disposable income to buy things before they even exist.
-[12:01] You must also consider that people are usually expecting to get a tangible reward from your crowdfunding project.
-[13:35] The last thing you must consider is if your goal is realistic in the constraints that you are working on.
-[14:50] Just remember, crowdfunding is really tailored towards the individual customer not businesses.
Thanks for listening! Now go out there and figure out what the best way is to launch a project and if it’s right for crowdfunding!
You can also check it out on Stitcher, Castbox, and Podbean!
Speaker 2 (00:03):
This is the crush crowdfunding podcast, the number one place for people who want to launch on Kickstarter and Indiegogo. My name is Nalin and I invite you to join me for tips, hacks and insights to get you launched and fully funded.
Speaker 2 (00:20):
Hey everyone. Welcome to another session of the crash crowdfunding podcast. I'm so excited to be here today to talk to you about another really important topic in terms of crowdfunding. I really want to talk about if your project is right for crowdfunding or how you can decide if your project is right for crowd funding or not. Because a lot of people who come to me, they have really good ideas,you know? They have really incredible ideas, but the ideas themselves probably aren't the best suited for launching on crowdfunding itself. They're probably suited for, you know, other types of launches right now. How funding is a pretty popular idea like, like I always say, it's a really democratic way to raise funds for your project. You really don't have to go to a VC, you know, and just beg for money. You don't have to go to angel investors and lose out on a ton of equity.
Speaker 2 (01:14):
You don't have to grovel for a loan from a bank. It's really all about how good your ideas are and how well you execute your launch plan. This entails everything from doing your graphics to collecting your audiences and collecting your leads and building your email list. Right? So since crowdfunding is really popular right now, you know a lot of people come to me and a lot of people really want to use it as a means to launch. They're like, wow, crowdfunding, there's a lot of horrah about it. There's a lot of articles being written about it. People are using it. And I've seen people get tons of success getting millions of dollars raised, get thousands of backers, tens of thousands of backers. So they themselves want to use crowdfunding, right? So before you decide to go down the crowdfunding route, you know, there's some things that I would really, really strongly urge you to consider it because let's be honest, here, crowdfunding is a channel for launching a product.
Speaker 2 (02:10):
You know crowdfunding is one model to get your product to market, but it's not really suited for every single thing out there, right? If every single thing was suited for a launch on crowdfunding, then everything probably would launch on crowdfunding just because it's so kind of democratic and it's just easy to get started with. Let's talk about some of the things that you have to consider before you even launch on crowdfunding. Right before you start, you have to figure out first like what type of crowdfunding you're looking to to launch on. Is it, you know, equity crowdfunding? Is it rewards based crowdfunding? Is it like a personal expense type of crowdfunding? Like what type of crowdfunding are you looking to launch? Because each of these different types of crowdfunding have their own little nuances. They have their own websites, they have their own ways of functioning that are very different from one another.
Speaker 2 (03:03):
Right? So with Kickstarter and Indiegogo, that's considered rewards-based crowdfunding. What that means is that you should have a reward for people. At the end of the day you have to be there to say, Hey, support me, support my project. And by contributing and supporting your funds, you'll get something in return. Right? So if your project is pretty much something like, Hey, um, I have this health expense or I have a family member with this health expense and where I would love for you to contribute to this cause this is actually not rewards based crowdfunding. And you shouldn't be using Kickstarter or Indiegogo for this, you should be using a different platform. So again, really making sure what type of crowdfunding you're looking to do is really important. Before you get started too. Another thing you should consider to kind of determine if your product is right for crowdfunding is kind of what the main demographic is for your audience.
Speaker 2 (03:59):
Right? So the day, the main demographic for Kickstarter and Indiegogo, you know for crowdfunding, for these rewards based crowdfunding projects, you don't really skew towards men. There's probably about 70% males who are backers of crowdfunding to like a 30% group of women who back on crowdfunding. But the majority of backers are around the ages of 25 to 35 years old. When you're looking at this just really general, broad overview of a demographic for crowdfunding, you need to see if this actually meshes well with who your target market is for your product, for your idea, for the thing that you want to launch, right? It's like for example, if you're marketing, if you have a product that is awesome for kids in high school or you have a product for people who are living in nursing homes, or if you have products that are great, great, great, great for people in middle school, then you're probably not going to be launching on crowdfunding because the demographic that you're going after, the demographic that is core for your product and your launch doesn't really mesh well with that core demographic for crowdfunding, right?
Speaker 2 (05:19):
If you're, again, if you're marketing to high school kids, it's, it's, that's not the main demographic for crowdfunding, so they probably won't be there looking for stuff to contribute to, to buy, to preorder, to help bring to life. Right? And not only that, when you're thinking about your particular project and your particular market and your particular audience, you have to make sure that there are actually people who are willing and able to spend their disposable income on something that doesn't already exist. Right. So when you, when you think of it this way, not everyone has disposable income. Right? Again, if we're looking, if we're looking at people like middle school kids, if you have a product that's great for middle school kids, they probably don't have a lot of disposable income, if any, to spend on a product that they can't get right away.
Speaker 2 (06:16):
Sure. They might get, have some pocket money to order something on Amazon and get it the next day, like a little like gadget or a little mug or something, but they probably won't have hundreds of dollars to spend on something and have that willingness to wait for six months, wait for a year in order to get the product to them. So again, make sure that the demographic that you have for your product and your audience is the crowd funding model because there's too often, I see projects that are really cool. It's a really great idea and definitely deserves to be in the market and definitely should be in the market because it solves a problem, it solves a pain point. It solves a really, really key issue for a very specific group of people. But that group of people is just not found on a crowdfunding platform. It's not found on Kickstarter and it's not found on an Indiegogo.
Speaker 2 (07:12):
So that's a really, really, really key point, right? Make sure that your demographic for your product, for your market, for your idea actually fits in with those who are actually on crowdfunding. Yes. There's like 60 million people who come to crowdfunding websites like Kickstarter and Indiegogo every single month, but still it's a very particular group and you have to make sure that they're going to be interested and they're going to be excited about your project too. Another thing I would really encourage you to consider is the fact that people who come to crowdfunding are really early adopters, they really are looking for things that are new and novel and kind of out of this world, right? Things I haven't seen before. Things that solve their pain points, things that are able to kind of be a solution for a problem. They had. Things that are off are able to offer a benefit they haven't seen before or in a way they haven't seen before.
Speaker 2 (08:10):
They're like super early adopters in a product adoption curve. There's, you know, the super early adopters, there's a mass market people and then there's people on the other end where they kind of lag in adopting a new technology. Right? When you think about thinking about it this way, when the iPhone first came out, there were people who were like hardcore. They were like, I'm going to get it. I don't really know what this does yet. Oh my gosh, it's a phone with a touchscreen. That's pretty cool. And they went out and they got it immediately and then the rest of the market kind of followed, right? The big chunk of people are like, Oh, this is actually pretty cool. And everyone else started getting it and then there were those people all the way to the end, the quote unquote laggards who are like, eh, I'm still not sure about it.
Speaker 2 (08:57):
I really like my, like little flip phone and I don't think I need something that's a touchscreen, yada yada. So again, there's so many types of people and how they approach getting a product and you have to know that people in the crowdfunding scene are the really, really early adopters and yet when the iPhone launched, they were probably the people who are out there lining up getting ready to get the cool new thing right? They bring in their disposable income and they're buying things even before they're on the market. They don't expect it to happen overnight either. They don't expect to come online and shop like a normal quote unquote normal eCommerce experience would allow for. For example, if you're going to shop online, you usually go to a store, you say, Hey, this thing ships in five business days, or Hey, this thing ships in two days, or Hey, this thing ships in a week, right?
Speaker 2 (09:50):
That's the normal eCommerce experience. Someone goes online, they get, they look at something and they want to get it pretty soon. But with crowdfunding, it's completely different when people will come on here, REM, early adopters, they're able to bring in their disposable income and they're buying things before they even exist. They're buying things and waiting six months, a year, two years down the line to get something that they're contributing to folk. So that's a really, really core mindset to think about because it affects the type of pricing that you can do for your crowdfunding project. If you're trying to price your project higher or price your award higher than what your real retail price is going to be, that's not gonna work for crowd funding because these guys are again, contributing their funds to a product that doesn't exist yet. So they're probably going to be able to pay, willing to pay lower than what your retail price is because of that increased risk of the product not even coming to fruition at all.
Speaker 2 (10:52):
Another thing I want you to think about too is these people, these early adopters, they don't expect something to arrive the next day. That's completely true, but they do kind of expect a tangible reward, right? If you scroll through the most successful crowdfunding projects on Kickstarter or Indiegogo, you'll see that the ones that have a tangible reward to provide to backers, you know, whether it's a product, whether it's a book, whether it's an album, whether it's just like I get gadget or a doodad or something, the physical product, those are the ones that really just do the best on rewards based crowdfunding because again, it's kind of people coming to a change their funds. There's disposable incomes for something in return, right? And the best things that they want to get in return to something tangible, something they can receive in the mail, something they can actually open, unpack on box use, experience, feel and make the best of right to solve whatever problem that they were experiencing prior to backing the project and prior to getting their award.
Speaker 2 (12:01):
And so if your project is like a software platform or if your product is an app, it's not, I'm not saying that it won't succeed, but I'm just saying that the potential for the success is probably a little smaller or a little lower because there's not really that tangible reward that people can, can get. And also Kickstarter and Indiegogo is really, really just tailored towards just hardware products, things like hardware, tangible products. A lot of the marketing and the promotion that they do is really geared towards those types of projects in terms of the promotional aspects of your campaign. You probably will get a little less loving from their own marketing team if you're launching that type of project. So again, I'm not saying that only only, only physical, you know, rewards or only tangible rewards that people can receive in the mail will succeed.
Speaker 2 (13:01):
I'm not saying that at all. There are tons and tons and tons and tons of examples of software awards or software things or apps that are successful. There's a lot of examples out there. I'm just saying that the majority of projects that are successful are this type of project. So before you consider if your project is right up for crowd funding or not, you know, make sure that it fits in with this mold of what people expect when they come to our crowdfunding platform. And the last thing I want to really talk about is who is like, is your goal realistic in the constraints that you're working with? Is your goal realistic for crowdfunding in every project that you work on? There's scope, there's budget, and there's time. There's those three things in everything in life that you do. And again, there's trade offs in life. There's trade offs, there's always trade offs, right?
Speaker 2 (13:53):
You can't come into a crowdfunding campaign wanting or needing, you know, $1 million in one month with zero budget to put into marketing. It just doesn't work that way. You know, and I'm, I'm a practical person and I want you to take a hard look at your project. Take a hard look at your idea. Think through your idea again, like what do you really need to race? How much time and how much effort do you have to spend on it and what budget do you have to actually contribute to marketing it to success, right? Cause honestly, like if you have a zero budget, you can't want $1 million, you know, eat PR, virality, buzz. It can't take you from zero to a million if you're not putting time or money into it. So when you're looking at your project and you're looking at the goal that you're looking to raise, you're the goal you're looking to get to for crowdfunding.
Speaker 2 (14:50):
Is it realistic in the constraints that you're working on? Because again, everything involves a scope, a budget and a time. There are those few things. One of the other things I want to talk about is crowdfunding is really tailored towards the individual customer and not businesses, right? So when it comes to selling, you can either sell B to C business to customer, or you can sell a B2B business to business. A lot of people don't really make this distinction for crowdfunding, and they come to a crowdfunding space and say, Hey, this product that I'm creating is tailored towards every small business owner out there. It's tailored towards bettering the checkout process for a muffin bakery store, right? So that's kind of selling to other businesses. The best crowdfunding campaigns or the crowdfunding campaigns are the most successful, are actually B to C rather than B2B.
Speaker 2 (15:46):
They're tailored towards selling to the individual customer. They're tailored towards selling to the individual person. So for example, if you're looking to target Jim's right gym owners or target a product that will make gyms a lot better, it's, it's kind of like you're selling to a business. You're trying to sell to all these gyms out there rather than a person. So you either have to pivot your messaging, pivot your marketing, or pivot something in your product so that you're selling towards the person you're selling towards. That one individual who will be using the product rather than the gym as a whole. Crowdfunding is really for that individual person. You have to be able to talk to the person, understand their problems, understand what they value, understand the issues that they're experiencing so that you're able to talk about the solution, the benefits, and pretty much kind of the the other side that your product brings to the table when it comes to the problems that people are facing, right?
Speaker 2 (16:42):
It's the, it's the, it's the customer, it's the one off customer rather than the business that your crowdfunding campaign should be focusing on. So when you're looking through all these, when you're thinking through all this with your crowdfunding project, you know, if your product doesn't truly fit the crowd funding model, like just don't lose hope, don't, don't lose hope. Remember that crowdfunding is really not the end all be all of launches. It really isn't. It's just one channel. Crowd funding is just one channel. Kickstarter and Indiegogo is just one of many ways to launch your project and launch your idea and really if crowdfunding doesn't work for you, if you go through all these types of things, you know that the types of crowdfunding now checking out your demographic, making sure that your demographic fits or doesn't fit, checking out, understanding if they're early adopters and not understanding that, Hey, my project doesn't really have a tangible reward.
Speaker 2 (17:34):
Maybe crowdfunding is not the best way to go. Hey, looking at your goals and seeing that if they're, they might not fit the crowdfunding model, how realistic it is in the crowd funding model. You know, if crowdfunding doesn't work for you, there's still a multitude of other ways and channels to launch your project. So don't be deterred. There's so many other ways and so many things out there that can help you launch your idea to market, help you launch your project to market. And I know, I know that when there's a will, there's a way. So I encourage you to get out there and figure out what the best way is to launch a project and if it's crowdfunding, continue listening because I will be dropping some more information for you in that podcast next week. Thank you so much for listening and I will see you guys next week. Thanks for listening to the crushed crowdfunding podcast at crushcrowdfunding.com. Tune in the same time next week for more ways to crush your launch.
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