Crowdfunding has a reputation as being a magic wand for inventors, startups, and entrepreneurs. But, those who have done it (and done it successfully) can tell you that there are many misconceptions about crowdfunding. Make sure you’re informed of the ins and outs of crowdfunding before you start a campaign.
Misconception #1: You’re going to get press
Getting press is an important part of a crowdfunding campaign. Even if you raise 30-40% of your funds from your friends, family, and other acquaintances, you still need a significant portion of money from others on the internet. The most common way those people will find out about your campaign is by getting press. However, getting press isn’t easy. You might think that if your campaign comes hot out of the gate that a journalist will be interested in picking it up, but that’s not always the case. Either way, you need to be prepared to pitch your story to many different journalists – local, niche, and mass media – for your product to have a chance of getting noticed.
Misconception #2: Your platform will bring the crowd
Kickstarter and Indiegogo are very popular websites. It’s true that some people browse them because they are interested in new trends, but more often than not, people don’t just randomly stumble upon your campaign, even if it’s on one of these popular sites. You, not the crowdfunding platform, are responsible for driving traffic to your campaign page.
Misconception #3: You need to set a strict launch date
Many crowdfunders are in a hurry to launch their campaigns, but then they spend the duration trying to generate hype around their product and spread the word. However, this is backwards. You should prepare for your campaign by generating excitement and getting people ready to donate and then when you’re 100% ready, preparing for launch a few days or weeks later. If you start preparing in June, don’t announce you’re going to launch November 19. Keep that goal date in mind but don’t announce until you’re on track to launch. Things can change and timelines can vary, so it’s better to make sure that all your ducks are in a row before committing to a strict date.
Misconception #4: Crowdfunding is free
Haven’t you heard the old saying “it takes money to make money”? Crowdfunding is no exception. To create a well-polished campaign, you’re going to need to spend money on video production, social media, advertising, and promotions. Once you factor in expenses for prototypes or the wages of assistants, you’re spending a considerable amount of money. However, the money you’re spending on crowdfunding can essentially count as a marketing budget because it’s helping to get your product’s name out there and find your audience and future buyers.
Misconception #5: The longer your campaign, the better
You would think that the longer a campaign runs, the better chance you have to get your campaign funded. Crowdfunding seems to go against that rule, however. Dragging it out is often not the best choice. You want to reach 30-40% right off the bat and ideally, in the days and couple of weeks that follow, people notice your early success and contribute to that. Some donors also like to wait until the end of a campaign and only contribute if you’re very close right before the deadline. Additionally, running a crowdfunding campaign is a full time job and you will get burnt out if you drag on the process.
Anyone who has done it will tell you – crowdfunding is hard! Before you start down the path, make sure you understand the processes and don’t buy into the hype and misconceptions. Understand what you’re getting into before you start a crowdfunding campaign.