If you’ve had the word ‘Crowdfunding’ stuck in the corners of your mind, then the chances are you’ve seen more than a few success stories in the last few months. It always happens like that, doesn’t it? You caught on to an idea or a concept and you see it everywhere. You notice all the six-figure tales of entrepreneurial success, all the have-a-go Charlie’s who actually pulled it off. But, what if the next great Crowdfunding Success Story was yours?
The 5 ‘Whys’ of Successful Campaigns
If you’re going to be a success, you need to work out WHY someone, anyone would donate their hard earned cash to help your dreams come true.
Business has shown us pretty succinctly that people only act when they have incentives to do so. So what incentives can you offer? Why should I give my five dollars to you and not the guy behind the checkout at MacDonalds? What can you offer that’s better than that burger?
There’s one incentive that’s guaranteed to drive folks to your crowdfunding project time and time again:
1. You’ve Just Solved A Problem
Leave the silver bullets at the door and find a solution that means something to the man on the street. It can be a simple product — revolutionize the humble bottle-opener, devise a nifty changing mat, invent a jacket that folds into a chair that folds into a bed (I’m still working out the finer points of that one). It can be a service, a novelty — a cat-lovers cafe or a barber shop for beards (hipster’s ahoy). Whatever you can dream, you can crowdfund.
2. You’re Kind of Likable
This Golden Rule is as applicable to venture capitalists as crowdfunding success stories. PEOPLE FUND PEOPLE; not ideas, projects, or services. If they don’t like you, if they don’t have confidence in you, then they’ll never part with their cash — even if you create a holographic phone or the coolest jacket that transforms into a chair that transforms into bed If you’re not likable, you’re not fundable. So, use all your charm and charisma and make people like you!
3. You’ve Nailed Social Benefits
You are feeding the undernourished, helping the poor or fixing earthquake damage. You are providing a community with social benefits, and igniting the interest of backers while you’re about it. People are kind (well, mostly), and they want to invest in good causes that make a difference.
4. You’re a Story Worth Being Part Of
So this is where friends and family come in, but they’re not the only ones with a part to play. Make your campaign personal and you’ll be inundated by strangers willing to help, to play a part in someone’s (maybe your) success story.
5. There’s Something in it for Backers
People want something tangible for their money. Provide some great perks at great prices, make sure they can’t get them anywhere else, and watch the backers roll in.
Most crowdfunders make discount quotas instead. They’ll offer the first 100 backers a 60% discount of the market price, the next 200 a 45% discount, the next 300 backers 30% discount etc. In this way they incentivize their backers and reach 30-40% of their funding goal quickly. After that things go much better.
What Type of Projects Work Best in Crowdfunding?
Projects that do contain these features are far more likely to boast a crowdfunding success. Of course, that’s not all they have:
1. Actual Benefits
Remember, you’re solving a problem for people just like you. Stress the benefits to your target audience. This means you actually need to have a few benefits knocking about. If you have decided to enlarge your business, because you want to become the richest person of your neighbourhood then that’s on you, but what will your backers get out of it?
The campaigns that fail are most commonly the ones that focus on the benefits to the campaigner.
“I have decided…”
“I need the money…”
If you don’t add a BIG WHY to all these statements, and clearly speak about benefits people will get, you have a pretty good chance of closing your campaign on $15 (we all make this mistake to begin with).
2. Target Audience
You can have the greatest product, but you have to know it well enough to target the people who actually want to buy it. Clearly define who is your target audience and what they have in common (age, gender, hobbies…etc). The clearer and more specific you are in defining your audience, the better your chances of gaining their trust and, of course, their money.
Try to connect with as many like-minded individuals and organizations as you can, because that will be your support team. Try to become part of their community and ask them about your idea. Collect as many responses as you can, it will help you to have feedback directly from your consumers and to position your project from the right angle.
3. Solve Problems
The more explicit is the problem that you are talking about, the better your chances. Your target audience needs to have experienced the same problem as you did. If there is no actual problem, then there is no benefit either.
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