80% of All Crowdfunding Projects Fail to Raise the Funds Necessary to Launch...Why?
Statistically, only 20% of all #crowdfunding projects will raise the necessary funds to start their business, as per Entrepreneur.com, when reviewing 5 crowdfunding sites, in 2015, including the following:
Crowdfunder.co.uk - 19%
Fundrazr.com - 26%
Indiegogo.com - 13%
Kickstarter.com - 31%
Rockethub.com - 11%
So, why is the statistic so low? What creates a successful crowdfunding campaign?
There are several reasons for this. First, you have to think of your crowdfunding campaign as a marketing venture just like you would if your product were already on the market. If people do not know that you are seeking crowdfunding, they will likely not know that they can support it. Taking the same companies above and again according to Entrepreneur.com the number of backers matters. On average a project only attracts 41 backers with the highest being Kickstarter.com with 108 and the rest falling drastically behind.
Second, if there is no demand for your product on the market, it will more likely not be well supported in the funding phase. So, how do you find out if there is a demand? That is a great question. We call it crowdsourcing. Crowdsourcing is the practice of obtaining information or input into a task or project by enlisting the services of a large number of people, either paid or unpaid, typically via the Internet. You need to have people test your product and give you their honest opinion on all fronts. Including:
Does it solve a problem?
Is it unique?
What level of interest would they have in it?
Would they use it?
Do you need to improve design or quality?
Is it priced right?
Just like finding viable backers, it is hard to get testers without paying a crowdsourcing company up front or doing your own outreach to find testers. It is harder than you think.
Third, when you post your crowdfunding project, you have to build interest quickly, maintain the momentum, and keep the audience engaged. The biggest hoop you have to jump through is problem number one above. No one knows about your project and are not looking for it specifically. So, people have to be aware of it ahead of time to really get off to a quick start. Maintaining momentum and engaging the backers is done through a couple of different ways:
Coming in in a big way will draw attention to the project
Make your offering page convincing and professional by adding professional video, clear graphics, history of your invention, market research and probability that it will succeed, and a bit about you and your business experience.
Make sure the offerings are incentivizing and enticing (adding options during the campaign can be a good move as well). Keep some pledge amounts at a reasonable level to attract smaller investors and provide some larger ones for those with deeper pockets.
Posting updates about the company and progress or additional information that can be helpful. Posting the questions that people ask and their answers is a great strategy and will save you some time.
It sounds a bit overwhelming but the good thing is that there is a community of thousands of people that are already in place that can alleviate all of these problems.
The kulaBrands community has a 4-pronged approach to helping the great innovators of today to raise significantly more funds than their goal. This happens again and again and again.
Big-name entrepreneurs such as Jeff Hoffman, founder of Priceline.com, consult with you before crowdfunding. And, after funding they have big connections and lots of experience that they share with you.
We help you to test your product by providing a ready-made crowd of eager testers with definite opinions. If there is interest within the community, there will likely be interest when you go public. When we "pre-pledge" we are committing to actually crowdfund you. And, we have an incentive to do that within the first 24 hours which creates the momentum that you need.
Our members work on digitally pre-marketing you before you go to crowdfunding, during the campaign, and after you launch your product into the market.
And, our members help you to grow your business by connecting you with potential resellers, being resellers, and promoting their own online store.
We are the crowd for crowdsourcing and crowdfunding kickoff! Our model is tried and tested. Here are some of our statistics:
100% of our projects have outpaced their crowdfunding goal and have completely funded.
Example 1: Zip-n-store - Goal of $20,000, 1584 Backers, and $152,720 total funded. (Currently on Amazon, and working on contracts with large distributors)
Example 2: GunBaiL - Goal $25,000, 479 Backers, and $46,032 fully funded. (Currently working on getting pilots in large crime infested cities.)
So, here is why our community does it...
Whether you are interested in earning reverse royalties or in being an inventor, it is a win-win setup. Watch this short video for more information.