Kickstarter, an early crowdfunding platform founded in 2009, has been successful to say the least. According to Statistia researchbetween July 2012 and November 2022, the surrender value of committed loans was approximately $6.95 billion. It provided emerging entrepreneurs with an almost risk-free way to test the viability of their products before actually building them. This funding process also provided entrepreneurs with “no strings attached” capital if they reached their fundraising goal. What has changed in the past 14 years? Pretty.
For starters, you can now find other entrepreneurs who will really help you succeed on these crowdfunding platforms by doing market research and helping you build your marketing campaigns. One of these companies is Launch Boom, a crowdfunding marketing agency with over $100 million in funded campaigns. They use predictive analytics to evaluate your potential fundraising success; then, based on research and insights, they build the marketing campaign to launch the crowdfunding campaign on Kickstarter or Indiegogo.
We recently had the opportunity to chat with LaunchBoom Founder and CEO Mark Pecota, who shared his take on crowdfunding today through his answers to our questions below.
Why should an entrepreneur still use crowdfunding today? Crowdfunding is still a great way to reduce risk for product inventors/makers. With traditional product launches, you would have to invest a huge amount of money in building your product inventory before launching. But with crowdfunding, that investment can wait. All you need is a functional prototype. Because with crowdfunding you can pre-sell your product, collect the money and then produce it.
What entrepreneurs don’t understand about crowdfunding? Crowdfunding launches are actually won during the prelaunch phase of the campaign. Instead of investing in inventory, invest in marketing. By far the most important factor for success is whether or not you have a large enough email list before you launch the campaign.
How do you build a good email list? To build your email list, we recommend building a booking funnel and driving traffic with meta ads (Instagram and Facebook). This funnel allows you to collect email addresses, but more importantly, people can make a $1 deposit to reserve the best discount on your product when you launch it. We found that people who make a $1 deposit are 30x more likely to buy than someone who only provides their email address. Building a potential customer list this way can help you get financing faster.
What is the main purpose of crowdfunding? While achieving the overall goal of fundraising is great, getting funding through crowdfunding quickly is critical. This will put you higher in the rankings on the crowdfunding platforms, which will drive organic traffic to your campaign. Since the amount you’ve raised is public, it will give future visitors confidence that your campaign is popular and increase your overall conversion rates.
What comes after the fundraiser? Remember, crowdfunding is just the first step in your overall goal of getting a product to market. If you do this correctly, you can produce your first product with confidence that there will be customer demand. You can use your early success to move into building and selling e-commerce brands, which is where the real business journey begins.
What are the core things an entrepreneur needs to do to run a successful campaign?
– Develop a product that solves a big problem in a unique way.
– Position your product to stand out in the market.
– Generate traffic through paid media (Meta works best for lead generation).
– Collect emails and $1 deposits with a booking funnel.
– Use email marketing to reach your funding goal on day one.
– Make the product you said you would.
– Deliver your product on time.
“Since I started LaunchBoom, I’ve met many entrepreneurs who want to be successful with their crowdfunding campaign,” says Mark Pecota. “Whoever becomes successful is not always based on the best initial product, but perhaps on this underrated quote from Steve Job: ‘Half of what separates successful entrepreneurs from unsuccessful entrepreneurs is sheer perseverance.‘
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.