When it comes to crowd funding, there is no faster or more exciting way to earn money for your startup.
A popular campaign on Kickstarter on Indiegogo can generate the awareness and funding your idea needs practically overnight, but many newcomers to the game find there are some unanticipated extras that come along with a crowd funding campaign. While the goal may be to raise money, by engaging your customers in a campaign you’re able to increase awareness in ways previously not possible for early stage startups. But it isn’t for everyone and every idea. And while they may not have the same allure as crowdfunding, more traditional means of capital raising are still viable – and commonplace – as pointed out by this piece of research from AXA. Still interested? Then let’s take a deeper look into what you can expect.
Less Risk Involved
According to Forbes, crowdfunding is a great way to reduce your overall risk. When you run a crowdfunding campaign, you can get a sense for your market and whether people are actually going to be interested in your product or service. During a campaign, you’ll likely interact with potential customers, ask questions you might not have thought of previously, and find new avenues to explore within your business. Crowdfunding serves as a sort of test pilot for your business, and it lets you run a no-risk campaign to see your true market potential.
It Builds a Base
One of the most difficult aspects of starting a new business is getting the word out and gaining a customer base, one of the most common reasons why startups fail. While most crowdfunding donations initially come from friends, family and people you know, as the campaign grows this close-knit group expands into other areas. Highly connected people from outside your own network may come into contact with and have a chance to learn about your idea and contribute to your success. In the process, you build an initial customer-base of influential, socially active early adopters with no overhead or concerns about business failure.
Conduct Market Research
According to MassiveMov, One of the worst mistakes a business can make is the inability to anticipate issues that might crop up during the early stages. When a company is just starting out it is vulnerable to a wide array of potential mistakes. Running a crowdfunding campaign gives you the proof of concept you need to determine whether you have a sound business model. If your campaign fails, you can tweak it with nothing lost other than a bit of time. The customer feedback you receive is critical in helping you create a sound, effective business model.
Embracing the Unknown
When you start a crowdfunding campaign, you never know what new idea you may come across to help your business grow. Customers will ask questions about your business, and you can take these questions and identify recurring themes. This can reveal more insight into what your customers want before you put the first product up for sale. By vetting your ideas through the marketplace, you can be certain that your crowdfunding will result in a viable and lucrative business.
Ultimately, crowdfunding is a great way to test your business model and find out the level of interest from customers. A good crowdfunding campaign helps to raise capital and awareness simultaneously. Engage your customers and you’ll come out of your campaign a step ahead of your competition.