Becky Center is the CEO of Indiegogo the crowdfunding platform that unites innovators with early adopters.
An entrepreneur’s journey is never easy. Taking the leap to start your own company is heightened by the fact that most are passion projects that have been in the ideation or dream stage for many years. Attracting funding is one of the most intimidating aspects of growing your startup, and traditional paths to funding, such as venture capital financing or small-business loans, are not always accessible. This is especially true for first-time founders and even more so for ideas that may be considered niche.
Crowdfunding was born to fill this gap but also as a nod to fandom and enthusiasts, giving the people who will use, watch or read the final product an opportunity to help bring it to life. And it’s on the rise, with the global crowdfunding market projected to reach $6.8 billion by 2031.
The genesis of online crowdfunding was anchored in music, an industry with millions of self-empowered, passionate fans who have a wealth of influence. According to the BBC, one of the first known instances of online crowdfunding was in 1997 when British rock band Marillion raised money directly from fans to finance their U.S. tour.
While crowdfunding has remained popular since it was first commercialized, the business model is seeing an increase in use across broad industries marked by a few driving factors. Since the pandemic, it has been well documented that burned-out workers are reprioritizing how they spend their time, resulting in new attitudes toward work. This burnout combined with massive Big Tech layoffs has reignited entrepreneurialism, whereby a new crop of entrepreneurs are pursuing their dream of starting their own business. Additionally, according to CB Insights, global investments into startups declined by a third in 2022, leading many creators and founders to crowdfunding to bring their ideas to life.
For those considering taking the leap into entrepreneurship, I’d like to share some insights on elements that make for the most successful crowdfunding campaigns. While the ideation, prototype and materials sourcing phases are their own beast (we’ll save those recommendations for another day), the success of a campaign can be boiled down to two essential elements: storytelling and tools.
Telling The Story
I encourage all founders to think of themselves as chief storytellers. While founders may not initially consider themselves this way, telling the story behind a product is perhaps the most powerful tool for product creators to connect with their audience and build a community. When it comes to successful creators, from what I’ve seen, some common elements in their storytelling include:
• Authenticity: Successful creators are often honest and genuine, which helps build trust with their audience.
• Emotional resonance: Stories that evoke strong emotions from the audience, such as empathy or inspiration, are more likely to be remembered and shared.
• Clear messaging: Successful creators are able to clearly communicate the unique features and benefits of their product, as well as their overall vision and mission.
• Compelling visuals: Visual elements such as photos, videos and infographics can help bring a product’s story to life and make it more engaging.
• Social proof: Sharing testimonials or endorsements from satisfied customers, industry experts or other influencers can help build credibility and trust with potential backers.
Leveraging Tools To Amplify The Story
Video is one of the most effective storytelling formats, as it allows creators to showcase their product in action and connect with their audience on a more personal level. Coupling that with compelling product photography, infographics and social media posts helps highlight the product’s key features and benefits. Ultimately, the most effective tools will depend on the product, the target audience and the creator’s own strengths and preferences. Gaining lifetime fans is underscored through regular campaign updates; it fuels engagement and keeps them excited about your project. And, of course, paid ads are a great way to reach backers for a “surround sound” push during the campaign.
Founders have a choice when embarking on their crowdfunding journey. There are many more crowdfunding platforms today than there were 10 to 15 years ago. My biggest piece of advice is to look at the resources each platform offers and understand that the goal goes well beyond raising a big number during the campaign itself.
There is a considerable amount of pre-, during- and post-campaign preparation, including message and collateral development, advertising and marketing plans, and supply chain and manufacturing leg work that will set founders up for success in the near and short term. Founders need support at every stage of product development, and it’s important to understand the kinds of resources available that will help make a campaign and subsequent product launch successful.
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