Most of us have some type of dream swimming around in our heads. Whether it’s an entrepreneurial pursuit or a new book idea, you might find yourself caught in the frustrating limbo of having big plans, but no foreseen vehicle to launch those plans. Without funding, you either can’t get your idea launched at all, or if you can, a great deal of quality gets sacrificed in the process.
The sad reality is so many go their whole lives without attempting to make their dreams happen. How can you focus on dreams when your current life requires every bit of your time and financial resources? What’s the best way to build support and funding before you have anything to sell?
Increasingly, people are turning to crowdfunding as the first critical step to get their product or idea off the ground and running. Crowdfunding is a financial campaign that is run mostly by using social media. It’s been utilized frequently in the music industry, for example, by bands who already have a fan base but want to release music while maintaining full creative control.
Turning their backs on the big music companies, and more specifically, the big music companies’ money, they are engaging their fans in new ways and using them as investors in their upcoming projects. By engaging their fan base to act as a multitude of mini-investors, they have the freedom to create their music without swimming in a sea of red tape and contract obligations. It creates string-free artistry.
Crowdfunding is also how movies like Veronica Mars are made, getting its cult following to open their wallets and financially back the film. When it’s done well, it creates a mutually beneficial relationship—movies get the funding they need for production and fans revel in the idea they made it happen. Both parties leave the table with something they want.
What Are the Benefits of Crowdfunding?
One of the biggest benefits of a crowdfunding campaign is having full control over the scope of your idea and campaign. You have the freedom to build a platform around your dream so that you can gain followers, pitch your ideas, and eventually convert your fans into investors.
It’s a bold departure from the stuffy board room presentations where potential investors are thoughtfully selected and meetings obtained in the hopes of convincing a few people to give you a lot of startup money. In fact, crowdfunding is built on the exact opposite strategy. Rather than asking a few people for a lot of money, you are now targeting a lot of people for smaller investments. And you aren’t reaching out to the financial and business elite, you are using the power of social media to build your following from literally anyone who is interested. The results can be amazing.
Can Anybody Launch a Crowdfunding Campaign?
Absolutely! But before you recklessly launch a campaign asking people for money (and cross your fingers that they do), there are some things to thoughtfully plan out. The stark reality is about 60 percent of crowdfunding launches fail to meet their goals. So just like anything in marketing, crafting a robust plan of action—one that engages people and keeps them engaged—is an absolute must.
You also might not realize that there are techniques and seemingly small choices that can alter the effectiveness of your campaign. For example, the length of your campaign can suffer if it is too short or even too long. These algorithms are important details to factor into your campaign equation.
Why Choose Crowdfunding?
Well, there’s the obvious one: money. Crowdfunding builds that important startup account allowing you to launch an idea, and to launch it well. It also allows you to craft your own brand and image before you take a giant risk. Further, it allows you to have an audience with which you can engage, and where interested people can share their feedback and preferences.
You are building your own focus group and these people can have an invaluable impact on your finished product. The people you engage with—the ones who have a sincere interest in what you’re creating—become your crowd; you can’t crowdfund without a crowd, after all.
Will People Really Donate Money to Just an Idea?
They will, and they have. It is important to note that money isn’t the first ask in a crowdfunding campaign. Your goal is longer term engagement, not a one time donation.
When the movie Veronica Mars was in production, there were levels of support that allowed fans to interact with the cast, receive prizes, and even make appearances in the final film. The campaign was run with the fans in mind, and by incentivizing fans, the relationship went from a simple exchange of money to fund a project to a relationship where the fans felt like they were part of the movie.
Likewise, you want to build this same type of engagement, but this will take a good bit of work and thoughtful planning. As you grow a following through your idea, come up with creative ways to keep people involved. People give because they want to be a part of something good. With skin in the game, they convert from money givers to full-on supporters who can help get the word out even more about what you are creating. They will first show their support through engagement, and then eventually through financial backing.
How to Get Started
Check out the research! There are a lot of helpful books available on the subject. Search for “crowdfunding” on Amazon and see what’s out there.
Build your platforms. Build your social media platforms, website, etc., and start getting followers. Campaigns that reach 30 percent of their goal within the first week are much more likely to succeed; that means you need to have committed, eager supporters lined up on day one.
Plan. There are a lot of pieces involved in a successful campaign, and you’ll need a solid, step-by-step plan for all the items you’ll need (videos, rewards, website) as well as daily activities during the campaign. With preparation, you’ll be ready on launch day to kick off a successful campaign!
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