Going for crowdfunding to turn your project ideas into actual projects is one of the fastest growing trends in the world of technology today. Projects funded by sites like Kickstarter and Indiegogo have gone on to become big successes in the consumer market, with more ideas appearing on the site every day.
There are, however, a number of things you should be doing before you launch your project on one of these sites. Often, the difference between a successful project and a complete failure is in the details. Things so small many people forget about prior to hitting the submit button can cause unexpected delays and lead to falling short of your funding goals.
If you can execute one crowdfunding project successfully, then people will be more inclined to back you in the future. This is why making a great first impression is so important on these sites. Not only will your project’s success impact you in the short term, but the long-term ramifications a badly executed project can have on your ability to generate revenue can last for years.
Here are five things to do before you launch a Kickstarter project. To help with this piece I reached out to Randy Ganacias, the creator of the MilliMount, to get his thoughts having recently completed a successful funding round on Kickstarter.
Get Licensing Fees and Expectations in Writing
You might have a brilliant idea on your hands that includes plugs and ports for every device known to man, but the idea amounts to nothing if you can’t get the company that patented the plug’s design to grant you license to develop your product.
This is one lesson the creators of the portable power project POP learned the hard way when they had to return over $130,000 to backers after Apple rejected a licensing request for its power station.
Randy Ganacias added, “Be sure to get an NDA for those that you’d like to share your project and/or prototype with.” Indeed, there’s nothing quite like having a great idea and having someone go to market with it first because you simply forgot to have them sign an NDA.
Check and Double-Check Cost Projections
If you hit your goal amount, then you owe it to the backers to deliver on the promises made throughout your project. This means that you have no excuse for suddenly realizing that things are a lot more expensive than you predicted when you launched the campaign.
You have to take into account that manufacturing, patenting, licensing, and processing fees for the project funding itself will take out of your bottom line. Don’t even get me started on taxes. That’s a whole new issue entirely.
Ganacias advises, “Get at least three quotes from different vendors/suppliers and plan to pay the highest.” These words are quite true, especially when you calculate the hidden fees you’ll encounter during the process. A project based on a low bid looks great on paper, but the real world fact of the matter is quite different.
Spend Time Planning Your Campaign
Don’t launch right into your campaign from the concept stage. Take time to build up a history with the idea so that you can create a more compelling story and come to the project with a clear idea of where you want the project to go. Unknown surprises during and after the campaign has completed will upset backers. You can’t make everyone happy, but you can at least come to the table with the answers people will ask.
Think strategically about your approach to the campaign. How will you promote it? How will you reach out to media and/or bloggers to generate the buzz you need to kick things off? What are your real challenges? All of these questions need to be answered before launching the page.
Do Market Research
I can’t tell you how many times I’ve seen a product on Kickstarter or Indiegogo that claims to be the first of its kind only to discover that similar products have been on the market for years. It happens a lot, and this is typically the result of lackluster market research.
Randy said, “The main question I ask is, ‘What sets your project apart?’ If that can’t be answered, get ready for competition and spend more time planning the campaign with precise market targets where aspects of your idea exceeds competitors.” The best projects are the ones that redefine how people think about a problem. If you’re the first person to solve an issue plaguing consumers, then you’re in a good place. If you take too long to come up with a prototype and deliver your idea to the world, a competitor will likely pop up and do it.
Prepare to Man Company Social Accounts and Websites
If this is your first project, then you’re going to face a swarm of questions and comments the likes of which you’ve never seen before. Being on top of the social media buzz surrounding your project means being active and engaged almost around the clock. This may mean bringing in additional help.
Randy Ganacias advised that project founders consider bringing family and friends into the fun. Meet with them over dinner and discuss strategy. Create a Facebook page and make them admins or set up a HootSuite account they can use to answer questions from Twitter. You never know when a quick response can translate into a major donation.
With these tips in mind, you should be better prepared to host a successful Kickstarter or Indiegogo campaign. What are your tips?
Image: 401(K) 2012