When most people think of crowdfunding, they think of raising money for small charity organizations, funding an indie movie, or maybe even raising a little capital for a startup business venture. However, when it comes to establishing your brand and creating enthusiasm for what you’re offering, crowdfunding may not be the first thing that comes to mind.
But maybe it should be. If you’re a startup looking to put your brand in front of millions and generate real excitement about what you’re offering, crowdfunding just might be the answer. Roughly 1 in 5 Americans has contributed to crowdfunding efforts on sites like Kickstarter, Fundable, and IndieGoGo; 34% of those have helped fund new products and inventions, 10% have helped fund a new business.
With millions of people looking to help businesses get off the ground, these sites are not just a great way to connect with potential investors but to create passionate advocates and enthusiasts for your brand. Paul Farago, founder of Miami-based crowdfunded men’s shoe startup AceMarks, said, “In the digital age, there’s so much noise and competition out there. Simply letting people know about us isn’t enough. Crowdfunding is a great platform to create brand enthusiasts; it has allowed us to develop momentum for our products, hammer out our processes, and nurture people who will be excited about our brand and invested in our success.”
AceMarks holds the distinction of being the most-funded shoe startup in Kickstarter history. In February 2016, the company garnered more than 2,000 backers in less than a month by offering handcrafted Italian dress shoes for men, using the Kickstarter platform to accept pledges as small as five dollars. This has allowed the company to not only raise more than half a million dollars in seed money, but to prove the appeal of its business model and create brand enthusiasts.
According to Farago, here are five ways crowdfunding can help you create brand enthusiasts for your startup..
Meaningful Human Interactions - Crowdfunding sites are all about small scale investors and backers coming together with entrepreneurs to support ideas they’re excited about; they help those businesses gain momentum and get off the ground. Unlike working with a venture capital firm or a bank, startups can take their ideas straight to millions of smaller backers and investors and interact directly with them at a human level, developing a relationship that goes beyond the typical customer relationship to something more like a partnership. Creating this kind of relationship means keeping in close communication with your backers. Crowdfunding sites are able to facilitate this. Most allow backers to engage directly with the company; founders can also provide frequent updates about the status of their venture, their progress toward proof of concept delivery, and eventual launch.
Engaging and Authentic Content - The crowdfunding world runs the gamut from kids’ fundraisers to highly professional launch campaigns and everything in between. However, it’s understood that most brands involved in the crowdfunding space are just getting started, so the marketing content and user experience may not be totally polished and professional yet (not that you shouldn’t do your best!). What backers and contributors are looking for, rather than a totally polished presentation, is frequent and direct communication that lets them understand your ideas and progress, and why they should be excited about them. In this case, it’s not the quality of your marketing that matters so much, as the authenticity, frequency and excitement that you are able to generate about your progress.
Concept Validation and Feedback - In the past, startup entrepreneurs had to take big risks and make plenty of assumptions when trying to determine if their idea had broad appeal. With crowdfunding, startups can validate their concepts directly with investors, backers and the eventual buyers of their product or service to determine if they have what it takes to go forward. This validation can come in a variety of ways - polls asking backers which ideas, products or features they prefer, sample delivery and requests for feedback about product quality and customer service. Tracking the success of your crowdfunding campaign itself and comparing it to similar ideas and campaigns also provides validation that your ideas are sound.
Generate Excitement and Enthusiasm - Customers are skeptical of new ventures. For a startup that doesn’t yet have a track record of success, overcoming this hurdle can be a challenge. With crowdfunding, your backers want to see you succeed because it means their investment in you will pay off. If they’re excited enough to back you, they’re often also excited enough to spread the word and help you succeed in other ways once your idea goes into production.
Turning Backers Into Buyers - in the crowdfunding space, backers don’t just invest in ideas that they find conceptually interesting; they invest in ideas that they themselves would be interested in buying. So, as you’re working on your crowdfunding campaign, it’s important to work hard to ensure that your future backers have a positive experience. Your team needs to be knowledgeable and empowered to make customer-friendly decisions. Any feedback you get from your backers and early customers - about quality, service or any other aspect of your brand experience - must be taken seriously.
According to Farago, “In crowdfunding, it’s not a one-sided customer relationship. Backers want to be seen as more than just customers, they want to feel an authentic connection with your brand. They’re partners with a stake in your success.”
The startup space is highly competitive; it’s no longer enough to simply make customers aware of your brand. With marketing messages coming at them 24/7 from social media, television and elsewhere, you’ve got to get customers past the stage of awareness to actual enthusiasm and excitement about buying your product. For a startup that hasn’t brought a product or service to market yet, this can be a real challenge. Crowdfunding allows you to meet the challenge and create a foundation that turns backers into brand enthusiasts who are partners in your success.