Entrepreneurs with good product ideas are wondering if they should go out and seek crowdfunding with their idea sketched onto a sheet of paper or if they should develop a decent prototype to communicate their product idea.
PROTOTYPE OR CROWDFUNDING, WHICH COMES FIRST?
Fear not, the simple answer is that entrepreneurs need a prototype to maximize their chances of getting crowdfunding. A prototype increases investor trust, demonstrates your progress/commitment to your idea and builds you brand. An example of such success is Eric Jeffrey who launched Massage Track on Kickstarter by himself. Yes, you read that correctly. Massage Track met 184% of its goal and when asked what advice Eric would give others thinking of crowdfunding, here is what he had to say:
Massage Track-Eric Jeffrey
- Produce more samples and send them out for industry PR.
- Plan to spend money (not just sweat equity) marketing the Kickstarter project after it starts.
- It really is like having guests in your house every day. You will burn out (would’ve been nice to have a partner).
It is entirely possible to DIY smaller campaigns yourself. Eric wished for a partner, and spoke of the lack of PR along with ad spend. It takes a team to stay committed, refreshed and continually building momentum. So, do your homework and plan your campaign ahead of time and build many samples to generate PR, before, during and after your campaign.
A PROTOTYPE SHOWS YOU ARE TRULY INVESTED
If you truly believe in the product idea, you will inevitably use your own money to get as far as possible prior to receiving outside funding. Funders need to know you are committed to the project and spending your own money on a prototype will help convince them of that. Nothing is better than showing off your product idea with an aesthetically pleasing and functional prototype. One way to keep the prototyping costs as low as possible is to build a minimum viable prototype. Keep the crowdfunding prototype simple, otherwise you will spend more money than necessary and risk confusing the people who might fund your project.
YOUR PROTOTYPE IS AN EXTENSION OF YOUR BRAND
A prototype is an extension of you and your company. In other words, the quality of your prototype gives potential funders a first impression of you and your efforts. Create your prototype so that is demonstrates the important functions of the product and looks good. Based on the quality, functionality, and overall look of the prototype, people can easily gauge how prepared you are to take on the challenges ahead. Show them that you are prepared for the future challenges of product qualification, production, and manufacturing scale-up by demonstrating your prototype is the best possible embodiment of your product idea.
DON’T TAKE MONEY UNTIL YOU ARE READY TO EXECUTE
Once you receive funding from the crowdfunding sites, you will be required to fulfill the promises stated in your crowdfunding project. If you have demonstrated a functioning prototype in your project video (and hopefully a live demonstration), you will be best prepared to step into production and manufacturing and will not have taken people’s money without a clear vision for the funding.
BUILD IT AND THEY WILL COME: NOT NECESSARILY
The most essential part of bringing a product to market is the crowd. It isn’t a ‘build it and they will come world’ when it comes to fundraising. You must be your own brand (BYOB) and cultivate a following before launching a campaign. This can easily be achieved with making your community involved in the process of building and refining the product. Every step you take to before, during and after your campaign is for your backer community therefore public relations, ad spending and building an engaged community around your product/company is key.
TO KICKSTART OR NOT, THAT IS THE QUESTION
Many entrepreneurs’ wonder which platform to use when launching a crowdfunding campaign with a prototype. Kickstarter is the first and obvious choice. For products with functioning prototypes, Kickstarter offering a targeted audience, most successful gadget campaigns and Kickstarter Live. Kickstarter Live, which is their own live platform that allows a campaigner to engage with their community and more, helps build accountability and trust within your community for your brand.
Indiegogo should be considered strongly as well. Competition might be less when everyone is flocking to Kickstarter for product launches. You should choose a platform that works well for you and that you are comfortable using. It is beneficial to donate to other campaigns when you launch your own to experience what your investor will and it builds trust as well.
PROTOTYPE READY, CROWDFUNDING…NOT SO MUCH
If you have a functioning prototype that can demonstrate what your product can do for a few minutes and not the entire 100 hours, you are golden. But having a prototype doesn’t make you well versed in crowdfunding. Fear not, you have many options. The internet is full of articles and e-books on crowdfunding. Educate yourself so even if you hire a team to run your campaign, you know how to keep them accountable and be an informed consumer.
At Idiya Consulting, we tend to explain to clients that you should build your brand, engage a crowd and prepare months before launching a fundraising campaign. You can hire a crowdfunding specialist who has brought products to market from the prototype stage to share the workload or do it entirely for you. We have a FREE checklist for aspiring entrepreneurs seeking launching their crowdfunding campaign on Kickstarter or Indiegogo.
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