On paper, crowdfunding campaigns seem easy enough to launch: think up a great idea, put it on a crowdfunding platform – and boom – watch the funding flow into your project’s coffers.
On paper, that is. In the real world, a good amount of crowdfunding campaigns fail. And yes, a good deal of them are fantastic ideas that could have enriched many lives or revolutionized entire industries. How come they failed, you ask? There are a lot of factors to consider, but there are five mistakes that almost all failed crowdfunding campaigns have in common:
1. Unrealistic Expectations
There is nothing wrong with believing in your idea and hoping to see it realised through the power of the crowd. Everyone’s heard of successful campaigns like Pebble, after all, which raised over 4000% of its target and was eventually bought out by its mainline competitor, FitBit. The problem is that when people hear about success stories like these, they tend to assume that crowdfunding is easy and throw all caution to the wind.
While crowdfunding certainly is the easier way to raise funding for your project, it’s not a free pass to seeing your vision come true. As with every business endeavour, you have to put in the work: properly marketing your product, communicating with your backers, and, most importantly, setting realistic, achievable targets that you can follow through in the long run.
2. Leaving it All to Hype
When it comes to crowdfunding campaigns, it’s always go big or go home: you have to see your project gain traction and take off early into your campaign. And the only way to get that done is to market before launch. In fact, a good percentage of campaigns fail because of no or poor planning pre-launch.
Part of setting realistic expectations for your campaign is realizing that not all campaigns gain hype. And even if yours does, it can only do so much for your campaign. Truth be told, the majority of campaigns only receive support from friends and family, which is an extremely limited pool of backers. If you wish to see your project get off the ground, make sure to cover your bases and market, market, market!
3. Misjudging the Scale of Your Project
Alright, so you have realistic expectations and covered your bases with some good, old-fashioned marketing. Great! But are you sure you’re able to deliver on your promise to your backers?
A proper knowledge of the scale of your project can mean the difference between a successful campaign and a botched one. Are you over-rewarding your backers that it affects your bottom-line? Have you considered your overhead and marketing costs?
Remember that there’s a good portion of campaigns out there that do reach their targets but fail to deliver on time – if at all – because of some unforeseen production “hiccups” down the road.
4. Overlooking Potential Conversions
There’s the “how” element of marketing your product or service, and then there’s the “where.” Where you market your campaign is also a vital consideration if you want to gain traction. Many campaigns fail because they rely solely on their platform’s users to support their projects.
This is a mistake, however, as this leaves out opportunities for potential sales from social media users like Facebook and the like.
5. Picking the Wrong Platform
Speaking of missed opportunities, launching your campaign on the wrong platform can mean the difference between success and failure. Most people launch their campaigns on big platforms like Kickstarter due to their popularity, hoping to get a slice out of the big crowdfunding communities there. As such, they miss out on gaining opportunities for quicker growth in niche platforms which have a smaller but more focused community that is more or less in line with their target audiences.
The right platform not only grants you exposure to the audience you need to help you secure that initial boom that you need, it also gives you access to particular features and campaign structures that are better attuned to your fundraising campaign and goals.
As an idea, crowdfunding is a fun, new concept that revolutionises funding and makes securing funds for your project easier. But it’s a grave mistake to treat it as some gravy train to success. Strategizing and marketing is key to any successful crowdfunding campaign, and – as with all things – foresight, market insight, and careful planning will prove to be indispensable traits in your arsenal.