This important article about crowdfunding or very precisely the three big crowdfunding challenges, that should be the first things any aspiring entrepreneur should be aware of before deciding to launch his or her crowdfunding campaign on any crowdfunding site or crowdfunding platform . The scope of this article will be only about perks based crowdfunding , not investment crowdfunding , crowdfunding for real estate or equity crowdfunding and only perks in the form of physical products like gadgets , not music albums or video games . Perks based crowdfunding is the most common type of crowdfunding on the two well known crowdfunding platforms , kickstarter and indiegogo , it is also the crowdfunding type that has seen record breaking in funding raised reaching 8 figures , with Peak design travel tripod being the best example along with pebble smart watch raising more than 20 million $ in its third crowdfunding campaign .It seems that Perks based crowdfunding has immerged to be a new funding portal for small scale companies beyond banks and venture capital funding . This easy path of funding in its outside appearance hides three big challenges , that if not addressed before campaign launch , it would lead to a confirmed failure . Without making the introduction of this article too long , these three big crowdfunding challenges are : building and testing the physical Product prototype , Prelaunch marketing campaign and after the crowdfunding campaign success comes the third biggest challenge of fulfilling and shipping the perks to their backers . In this article you’re gonna explore how building a physical prototype would increase your crowd funding campaign success and how to afford building a minimal viable product prototype , how the prelaunch marketing campaign of your crowdfunding campaign will determine its success before its launch and finally how failing in fulfilling your backers orders can break your campaign success and even the future of the company .
1 building a physical prototype would increase your crowd funding campaign success and how to afford building a minimal viable product prototype
This section should be seriously taken into consideration , although i know that the majority of you would not skip this phase of product prototype building , but there is a minority of newbees who would still enquire whether they should build a product prototype or not .If the aspiring entrepreneur has a sufficient financial budget that would cover all the expenses of his crowdfunding campaign including building the prototype , if he decides skipping the prototype building phase for saving money , the money he will loose after the crowdfunding campaign would be more than what would be saved and in most cases it would be lost , because you will not show the potential backer that you have put your own time and money for building this prototype , so why this potential backer will give his money which is his time and efforts he puts to have this sum of money you are asking him to pledge for your crowdfunding campaign. I hope this analogy would be sufficient to highlight the importance of building a physical product prototype and even consider it as a manufactured product in the hands of an interested consumer and not only a product for shouting the video campaign . For those of you who find themselves stuck in this phase ,because they can not afford building the prototype , you can check this extensive detailed article that will answer all your questions or click on the infographic below
2 prelaunch marketing campaign of your crowdfunding campaign will determine its success before its launch
When taking a look at the cover image of this article , you will have the impression that this recent block buster crowdfunding campaign of Peak design travel tripod has been able to raise more than 12 million$ by adopting some unique innovative technological designs , in fact these elements ply an important role in the crowdfunding success , but the most important element is running a pre launch marketing campaign collecting email of potential backers who would support your campaign before sending them an email informing them that you your crowdfunding campaign is live on kickstarter or indiegogo and not just launch your campaign without any prior marketing the run advertising campaigns getting people to visit your crowdfunding campaign page for the first time . Launching pre launch advertising campaigns for building an email list is the unique effective pre launch marketing tactic used by all successful and even unsuccessful crowdfunding campaign , which you can observe after taking a thorough look at some successful crowdfunding campaigns ,the first thing to do is building a website ,that would be a future online store of the crowdfunded product , hosting a landing page similar to the crowdfunding page but this one having an email opt in asking for potential backer’s emails . The common rule of thumb in building the email list is to collect double the number of potential backers who would make the crowdfunding campaign reach its target .In the case of Peak design travel tripod , this is the company’s ninth crowdfunding campaign after nearly 8 years during which ,the company has built a huge email list and social media fan base , the average individual can observe on its facebook page , youtube channel and instagram page .
Timeline of the most funded kickstarter campaigns having crossed the 8 figures mark .
In addition to all that , the company has used the marketing service of Jellop advertising agency , the Tel Aviv agency having helped tens of kickstarter campaigns crossing the seven figures mark . I have gone deep in mentioning all these prelaunch marketing tactics to show you how important they are along with the innovative product technical features . By the way , Peak design founder , Peter dering ,has said in the campaign video that he was working on this gadget , peak design travel tripod , since 2008 , namely 11 years .The same thing can be said about some successful indiegogo crowdfunding campaigns that have crossed the 8 figures mark , the first one being Ubuntu edge which was also the first before any kickstarter campaign . This campaign has not reached its goal simply because it has asked for 32 million US $ , this case should not be taken seriously because asking for this huge funding goal required huge pre marketing efforts to build a huge email list that will determine the success of your campaign . As for the second most interesting case of flow hive ,this indiegogo crowdfunding campaign has achieved this massive success by a guy who had no background in entrepreneurship or internet marketing , but he was able to adapt and learn to use email marketing to build a list of more than 70 thousands leads before launching his crowdfunding campaign on indiegogo .
3 failing in fulfilling your backers orders can break your campaign success and even the future of the company .
After successfully overcoming the first two challenges , you have the right to give yourself a break to celebrate your success with your backers , but don’t forget that you still have to overcome the last third challenge ,that if not overcome successfully , it will for sure jeopardize your success , time and effort to get to this point . One should not worry to this point ,because almost all successful campaigns have turned into thriving online stores , the ones who should worry about fulfilling backers orders are those who have no prior experience with online selling and subcontracting manufacturers which are the two important tasks that should be taken care of before launching your crowdfunding campaign and not make the fatal mistake of postponing these two tasks after your campaign successfully gets funded , because you should already know if your campaign would succeed or fail before launch , so taking the decision to launch it , that presumes it will reach its goal . During the phase of preparation , after building the prototype , you should contact a trusted manufacturer who will determine the price range , if your budget can cover the expense of paying your contract manufacturer for making a high quality prototype for test and even for showcasing in your campaign video , this will save you time and hustle after the end of your crowdfunding campaign and will make you aware of the manufacturing costs that will be added to the shipping costs which will be determined by just measuring you prototype weight and volume and compare it to the shipping rates displayed on the websites of DHL and FEDex . All these measures will make you avoid the fate of some well known crowdfunding campaign like fidget cube , that after raising more than 6 million $ , the two brothers who launched the kickstarter campaign have found themselves unable of fulfilling their backers orders , the cause is a long story but is centered around the fact that the manufactured items were found to be defected and not functioning as expected like the first prototype .
This article has been written after following the news of tens of successful crowdfunding campaigns as well as their progress and development as companies after their crowd funding campaigns . The lessons learned about some fatal mistakes mentioned in this article should not only memorised but also avoided for avoiding failure , as its end result can be irreversible as in the case of fidget cube crowdfunding campaign , in which , failing in addressing the third challenge of fulfilling backers orders , has destroyed the company future . The best final lesson to learn is to check weather you would be legible to avoid making these mistakes before launching your crowdfunding campaign .