Crowdfunding is Marketing Pure and Simple
Crowdfunding is undoubtedly this year’s hottest topic and trend and with good reason.
The ability to publicly raise funds for your idea, product, or company, by gaining access to millions and millions of potential investors, gives anyone with an Internet connection access to a little or a lot of capital.
Now, anyone with a good idea and the ability to write a compelling description of that idea, can turn to services like Fundable, Kickstarter or Indiegogo to raise needed funds by offering incentives such as product, early access and even private receptions.
The recent passage of the Jumpstart Our Business Startups Act (JOBS) only accelerated the mainstream acceptance of crowdfunding and eased some of the restrictions placed on small businesses in need of capital. The JOBS Act opens the door to even more opportunities by allowing companies to offer stock and equity to individual investors much like they might by partnering with a venture capital firm.
Okay, enough with the backstory.
While the media covers the overnight successes and over the top fundraising sensations, such as Pebble, created through crowdfunding, the fact remains crowdfunding is simply a mechanism that marries a potential community with an accounting function.
The promise of “create a project” and “watch the funds come in” is in stark contrast to the reality of create a project, market like crazy and maybe the funds come in.
In a way, crowdfunding is simply preselling your idea or product and that takes a marketing mindset pure and simple. In fact, it may actually take an even more strategic approach because you may not have a track record, any proof you can actually pull your idea off or raving fans and success stories to rely on for referrals and testimonials – all essential marketing assets.
The other element that makes crowdfunding such a marketing play is the campaign nature of how most services operate. Generally your funding campaign is an all or nothing proposition on the clock.
In other words, if you want to raise $10,000 you’ll have a set amount of time to raise the money and if you come up even a little bit short, you don’t get anything.
One of the most intriguing marketing related aspects of crowdfunding is the public nature of the campaign. For some companies, ideas and products this is their public coming out and the buzz created in a properly executed crowdfunding campaign can carry a business swiftly into a phase of growth or momentum.
So, in many ways the actual money raised is only a part of the opportunity that exists in this approach.
Since this trend has so much to offer small businesses and entrepreneurs of all kinds and since I’m making a case for the element of marketing in this space, I thought it would interesting to create a series of posts going deep into the elements of a successful crowdfunding campaign and build a case study using a real and existing campaign.
To read the full article – Click Here – John Jantsch – Duct Tape Marketing – August 29, 2012