Crowdfunding…… it’s the very latest catchphrase that promises to “make your dream a reality.”
Got a great idea? You’re in business.
Whack it up on one of the many crowdfunding platforms, make your pitch, sit back and watch the dollars roll in, right? Wrong.
While there are many inspiring success stories, there are equally as many if not more crowdfunding campaigns that simply fall short of the mark. That is, they fail to meet their monetary goal.
The grand business plan is then left to drift off into the sunset…usually never to be heard of again, becoming nothing more than someone’s pipe dream.
You don’t have to be Einstein to understand that no matter how big or small your project, crowdfunding is risky business. One of the biggest platforms, Kickstarter admits 56 per cent of crowdfunding campaigns fail.
So, what goes wrong when campaigns don’t make their target?
Who’s to blame? What’s to blame?
While most of the online crowdfunding platforms usually offer plenty of advice and support, that doesn’t mean campaigners don’t have their work cut out for them.
A quick Google search will soon tell you the most popular reasons campaigns fail:
#1. People underestimate the time they need to invest – they don’t lay the groundwork. Every project needs a carefully thought out preparation and execution plan.
#2. An unpersuasive or uninformative video pitch, or no video at all!
#3. The failure to build relationships. It seems to be successful you need a crowd and you need to work that crowd really hard.
#4. And who would think it, but there are campaigners who simply fail to research their market thoroughly enough.
Desima launched her campaign ‘Connect a Pot’ – a low maintenance self watering pot on Kickstarter. While she managed to get 85 backers, she only made a quarter of her $22,000 goal. She says, with hindsight she should have lengthened her fundraising duration from 30 days to 60 days. “From a psychological view it would have given more people who viewed my project the view that it still had plenty of time to reach its goal.”
She also says she could’ve made her video more entertaining as well as lowering her funding goal. “Even though I would have lost money at this point, I would now have a product to sell.”
“Overall I’m glad she went through the process. I learnt so much about marketing and PR.”
Doris Leung who runs Diamond Cabs in Hong Kong (cabs for people with disabilities) launched a campaign to replace these cabs with newer versions. She was 58 percent funded but not enough to complete her long held dream. She says while platform Indiegogo gave very good guidance, perhaps her product wasn’t right for the platform. “I think tech, eco, affordable household or living products are more popular in crowd funding.”
Co Founder and CEO of Ambi Labs, Julian Lee launched a crowdfunding campaign for Ambi Climate – a connected device that automatically controls your air conditioner. His first campaign on platform Crowdtivate failed spectacularly. It was a different story altogether though when he relaunched with platform Kickstarter, reaching their funding goal in just nine hours.
Julian said the biggest change was the platform itself although they admittedly put in more effort in the second campaign.
“One point of comparison was in terms of our video views. In our first campaign, we had only 100 backers for 12k+ video views, but for KS, we had 700 backers for 20k video views. Of course, it still hard to say – perhaps we were just so much better at pitching our story in the 2nd!”
Joseli Cheung launched Dressing Dreams on Fringebacker, a platform for artists, musicians, designers and the like. She believes her product – a multi-function cape — was simply too unusual. “The product is not a common garment and the style is not common and we didn’t have a large market.”
Cheung said “If I joined crowdfunding again I would like to create more simple design products and improve the packing.”
“Crowd funding provided a good platform for me to show my design to the public.”
George launched the campaign Hong Kong Temple Map using Fringebacker – a project to protect Hong Kong’s temples with a photo shoot list to build awareness and appreciation.
He said, a crowdfunder in Hong Kong needs to have a solid Cantonese presence (at least for this kind of topic) whereas we tried to do it only in English, and secondly the reach of Facebook was actually quite limited even with paid advertising.” “Fringebacker were helpful in setup but don’t provide any marketing or automatic audience in themselves.”
Don’t forget, even if you defy the odds and meet or exceed your campaign goal, the real fun is only just beginning. Many successfully funded reward campaigns run into serious hurdles in manufacturing and shipping a successful product. A great idea and cash is simply not enough. You need business, supply chain, and manufacturing skills to really succeed!
Former Reporter/Producer and News Reader for Sky News Australia, Nicole decided to step outside the box (literally) in 2010 and move to Hong Kong with her hotelier husband (and bump). There she began her media business as a freelance journalist, copywriter, feature writer, media trainer, presenter, MC and social media consultant. Now on her second expat posting in Xi’an, China, Nicole is also founder and writer of entertainment expat blog – Mint Mocha Musings: The Hotelier’s Wife, An Expat Affair in Asia (http://www.mintmochamusings.