Click to rate this post!
[Total: 0 Your Rating: 0]You must sign in to vote
No two words bring as much joy to a founder’s heart as “venture capital” (VC). Whether you run a startup company or an established business, VC is the infusion almost every founder covets. A very small percentage of startups, however, will raise the capital they need to take their business ideas to the next level through VC. Blame it on pre-market concepts, patchy business plans or limited experience. Investors want low-risk, high-reward ventures and will rarely take a chance on untested leaders.
The entrepreneurial game, fortunately, changed over 10 years ago when crowdfunding portals like Kickstarter and Indiegogo began connecting founders with capital through the audiences who could become both the sponsors and test marketers. Peloton, Oculus and Exploding Kittens are just a few companies that have seen a meteoric rise thanks to crowdfunding.
The low cost of entry makes it attractive for founders to take a chance on their dreams. But as more entrants join the crowdfunding gold rush, the chances of creating a successful campaign are shrinking. With an agency that helps clients run campaigns, including for crowdfunding, I’ve seen some of the worst crowdfunding mistakes. You can maximize your crowdfunding success by avoiding the following.
1. Not Gathering Pre-Launch Feedback
You’re stoked about launching your crowdfunding idea. Your product solves a problem, it’s different and well-timed. But the first mistake many founders make is falling in love with an idea without gathering feedback before jumping into the campaign. Leveraging feedback from your network and community provides critical information to make necessary adjustments before the campaign rolls out.
It’s difficult to modify your campaign post-launch. Identify your audience, solidify your price point, make design choices and ensure product functionality beforehand. Ticking these essential boxes first allows you to grow your backer base with the right product at the right price and carry momentum throughout the campaign.
Crowe BRANDVOICE | Paid Program
Finding Work-Life Balance In A Remote World
Qatar Foundation BRANDVOICE | Paid Program
Qatar Foundation BrandVoice: 21st Century Learning: More Than Just Resiliency
Qatar Foundation BRANDVOICE | Paid Program
Reimagining Education: Grasping What ‘Change’ Really Means
2. Little To No Preparation
Oprah once said, “I believe luck is preparation meeting opportunity.” Don’t rely on blind luck; you have too much skin in the game. Carefully analyze each aspect of your campaign before you introduce it to the world.
Will you be shipping the product for free? Have production costs been calculated? Have you planned your marketing costs and rewards program accurately for the life of the campaign?
Underestimating your costs can be detrimental to your ability to deliver your product to backers. Get your financial models in place so you can create product, raise capital and deliver seamlessly. Determine the marketing investment you will make on page creation, video production, and direct and social marketing. You cannot rely on the crowdfunding portal audience alone. Lastly, consider affordable rewards programs, making sure you are offering real value to backers.
3. Poor Page Design
Great crowdfunding pages grab attention, create engagement and encourage action. Appeal to the emotional desires of your backers while showcasing your design functionality skills to close the deal.
With only seconds to capture backer interest, dynamic headlines and great videos can set the tone. Once you grab their attention, the functional direction of the page is paramount. This is where you deliver the rationale to justify how your amazing product will change their lives.
At the end of the user journey, the rewards program (e.g., “buy two get one free”) will give backers a value proposition to maximize the worth of their pledge.
4. Absentee Creator
Venture capitalists love companies with a great story. The idea is yours: Who better to tell potential backers about it than you?
People want to feel like they are a part of something great and thus will help bring your project to life. Establish a personal connection with them. Once people hear your story and understand why you are bringing your product to market, they will feel more compelled to not only back your product but hopefully become brand ambassadors.
5. Not Including Quality Videos
Don’t just tell; show. We are a visual society. According to Kickstarter, “A video is by far the best way to get a feel for the emotions, motivations, and character of a project.”
Your video doesn’t have to sport an amazing production value or be expensive. It just needs to tell the backer a compelling story of the founder’s vision, show them use cases of the product, and express the value proposition to gain their support. The platform also confirms that “Projects with videos succeed at a much higher rate than those without (50% vs. 30%).”
Once your campaign is live, monitor metrics that display views and average viewing time. This valuable feedback can help determine if modifications need to be made to better tell your story and increase pledges.
6. Losing Momentum After Launch
Avoid plateaus by targeting prospective new backers with social ads. Model your current supporters and test ads to find out who your product is going to resonate with the most. Then, keep scaling! The importance of A/B testing is crucial in finding a formula that will maximize conversion rates.
7. Not Aligning Strategy With Analytics
Campaigns do not run on autopilot. You must keep a close eye on performance and be ready to adjust if necessary. Slow response to poor results is deadly. You must be highly sensitive to both the positive and negative factors impacting your campaign goals.
Continuously answer these measurable questions: Are users engaged on your project page? Are ad campaigns producing traffic that converts? Do product information, incentives and videos need modification? Monitor campaign metrics daily and be willing to make any modifications possible to maximize traction and pledge conversions. The aim is to scale profitable initiatives and optimize underperformers.
There might be some snags along the way, but if you gather support, do your research and follow these stylistic and metrical guidelines, there’s no reason you can’t build a campaign to capture and thrill backers, securing the capital infusion you need to launch the company of your dreams.
Taken from https://www.forbes.com/sites/forbesagencycouncil/2019/09/25/seven-crowdfunding-mistakes-to-avoid/#a977d7619d12