Top 10 Mistakes to Avoid When Launching a Crowdfunding Campaign
How to Dramatically Improve Your Chances of Funding Success
Having a business idea can be so exciting but transforming the idea into reality can sometimes be very disappointing. One of the challenges that turn world-changing business ideas into failures is lack of funding. However, in this Internet era, there are a number of ways through which one can raise capital for whatever venture they want to launch.
One of the ways you can raise money to jump start your business is by having a crowdfunding campaign.
This is a way through which an aspiring entrepreneur shares what they have on their minds on Internet platforms such as Kickstarter among many others with an aim of getting funded. In this case, the one in charge of the campaign promises potential investors some rewards after the business hits the ground running.
Not all crowdfunding campaigns are successful. In fact, the majority of them do fail terribly due to several reasons. Today, we would like to take you through the top 10 mistakes to avoid when launching a crowdfunding campaign and how to avoid them in order to have a successful campaign.
Not Choosing the Right Platform
One of the sure ways of burying your crowdfunding campaigns before they make it to the audience is by using the wrong Internet platform. How does this happen? We have some online platforms which have been successful in a certain line of ideas such as technology. This means that if your project is not related to technology, chances of failure are so high compared to chances of success.
This mistake has actually shattered many great business ideas since when an individual's idea fails on such a platform, they tend to give up without considering looking at other suitable platforms for their idea.
The only way to avoid this mistake is doing intensive research on crowdfunding platforms that are available and match one to your area of specialization.
You need to familiarize yourself with different platforms and finally choose the one that fully meets the scale of your project. Research and choose a project platform with a history of success in the same industry or category of idea that you are interested in. Once you do that, your crowdfunding campaign is just a step away.
Laying Too Much Focus on Money and Not Your Audience
When most of us want to launch our campaigns, we tend to lay more emphasis on money that we need raised and forget that it is the audience who give us the money. This is a very bad mistake which has in the past been associated with failures of crowdfunding. One of the basic rules of crowdfunding is that you have to make sure that the crowd or rather the audience is happy with you and when this is done, the money will automatically follow. The first aim of your campaign should be to build and engage a family of supporters who are in love with what you do and are eager to see you transform your dream into reality. When this is achieved, then you are allowed to start thinking about the money.
It is also good to make sure that even after the campaign is over, whether successful or not, you stay in touch with your followers or supporters.
This is the best way to keep your audience since you never know whether you might need them in the future or not. The rule of thumb is that you have to maintain loyalty to your supporters after the whole campaign is over.
Assuming the Existence of Crowd
As many individuals with ideas do, you are going to land onto a website with a huge number of customers who are willing to support any potential project. However, the number does not mean that they are going to support you in achieving your dreams. This is a big misconception that people do immediately after launching their crowdfunding campaign. In as much as you could have your campaign published on the best selling sites, remember that other people, who at times could have better ideas than you are also looking for investors. This means that you are going to face competition when it comes to getting your project financiers.
The crowdfunding platforms could give you a high chance to reach out to potential investors but that might not be enough. You need to create your own support base before you even think of launching your campaign on online platforms. The online people cannot be relied on entirely when it comes to raising funds. So what are you supposed to do? It is good to start by building a community of supporters beginning with your family members, relatives, and friends. This is a good way to have a secure audience that will stand by you and even spread the word about your campaign. When this is done, then it is time for you to launch the campaign on online platforms.
Not Involving Your Audience in the Course of the Campaign
It is good to know that during the crowdfunding campaign, you are the owner of the idea, in this case, you are like the sole proprietor of the business. This means that it is you and only you who can stay in touch with your audience and no one else. With this said, you need to train yourself how to communicate with your audience at a personal level. You need to talk to your audience directly so that they stay informed about the progress of the campaign. By doing so, some of them could even extend or go beyond their pledges just to see you achieve your goals.
Do not keep quiet. Your audience needs to be updated with the progress of the business. In this case, the progress means how far you have gone with the funding, how far the number of investors has reached and so on. Get personal with them and engage them via emails and even social media. Use the first person while addressing them. Instead of saying the project needs’, say My project needs’ and so on. This is very key as it enables you to air out your issues as if you are talking to them directly.
Not Having an Effective Campaign Video
According to research, pictures and videos speak louder than just reading content on a page. This means that when you want to launch your campaign, the first thing that you need to ensure is that your video is very clear and describes what your project is all about. The video should describe who you are, what your crowdfunding is about and what you need or rather how much you need to make your ideas a reality. Furthermore, it is also good to state the type of rewards that your potential investors will get after funding you. One thing you should not forget is the fact that your video has to be short, clear and straight to the point.
You also need to use simple language that can be understood by a layman. This will make it easy for you to reach a wide range of crowdfunders. It is good to have in mind that your video acts as a summary of the content that you post on your page and since many people do not have the whole day to read your content, most will go straight to the video and listen to you. Another thing is that a video can easily be shared through social media and thus will reach out to many people at once. Have a catchy video that is well edited, clear, loud and short as short as five minutes.
Failing to Have an Intensive Pre-launch Campaign
According to crowdfunding experts, a good crowdfunding campaign is funded before it gets launched. This is the best strategy you can ever adopt. There is no single project that can publicize itself. Before you even launch your campaign, it is good to have an effective pre-launch campaign that can move people and make them interested in whatever that you want to do. Create interest months before the launch so that they will be anxious about what you want to do.
You need to make sure that you create a network and keep them aware that something exciting is in the pipeline. This is what is referred to as the creation of anticipation. This can be achieved in different ways; giving little details about your project, dishing out new written content every day or even writing press releases. This will actually make you have a greater audience for your project before the official launch of the campaign. Having a good pre-launch campaign makes it that much more possible for your project to get funded.
Not Having a Clear Call to Action
This is one of the common mistakes that many crowdfunding campaigners do. They concentrate too much on the amount of money they need to get but go ahead and forget that they need to inform their backers that all they need is financial support so as to make them achieve their dreams. You have to ask for support and financial contributions.
After making sure that the audience is fully engaged, it is very crucial for you to go deeper and tell them that their support is very much needed especially the financial part. Your call to action should be geared towards moving people to action. Be very clear why you are crowdfunding and state clearly how much money you need. If you can make your audience understand why you are crowdfunding, they will obviously back you up. You should also go ahead and explain how the money being crowdfunded will be used.
Having Unrealistic Goals
Many of the individuals with great ideas don't actually achieve them because of setting unrealistic goals. The same applies to crowdfunding campaigns that are run on different platforms. Some of us are either under ambitious or over ambitious. That is what it means by being unrealistic. Before launching your campaign, you need to do thorough intensive research about your project and how much money is needed. You should not quote a very low or extremely high amount of money. Doing so will shy away backers since most of them can actually detect projects which are not realistic.
So, what are you supposed to do? Do your research and mathematically come up with a figure that is realistic and people can believe in. Beware that if you ask too little, you might end up delivering very low-quality products contrary to the expectations. On the other hand, setting too much money might appear unrealistic and even scare away backers. During your calculation, you need to factor in the cost of running the campaign, the percentage of cash the crowdfunding platform will take away and the rewards that you will offer.
Not Updating the Backers
It's good to remember that crowdfunding is not a one-time thing but rather a journey. If someone backs your campaign, it is advisable to keep in touch with them even after the campaign is over. This is important because you may need them in the future for another campaign for a new product. You should be able to thank them for their generous contributions after the campaign is over too.
In the course of the campaign, it's also good for you to update the backers about the point at which the campaign has reached. If you do not update your backers, most will assume that you are only interested in their money and nothing else.
Rewards That Don't Appeal to Your Audience
When launching your campaign, it's vital for you to promise rewards which can appeal to your backers. Give out something that can make someone remove their hard earned cash for your campaign. Try to be original and creative in your rewards. If you are offering the same type of rewards like everyone else, then no one will be moved to fund you.