Until recently, attracting relatively small amounts of capital to start a business or develop a product had few realistic opportunities. Generally, unless you knew someone, had a revolutionary idea or were just lucky, obtaining the necessary capital was usually doomed to failure particularly for non-mainstream products. However, this process has changed dramatically in the past few years.
I recently spoke with a woman who is in the process of writing a series of illustrated children”™s books and I suggested that she look into crowdfunding. Crowdfunding is a method of collecting funds from a group of seemingly unrelated people for many different purposes including donations. When involving product development, many crowdfunding websites insist that the product creator maintain 100 percent ownership and instead offer certain rewards depending on the size of the donations. For their services, crowdfunding websites receive on average around 5 percent of the monies collected.
One popular crowdfunding site is Kickstarter. (It is also the site I recommended to the woman with her children”™s books.) Kickstarter claims, “Since our launch in 2009, 5.8 million people have pledged $1 billion, funding 57,000 creative projects” and attracted more than 1 million contributors. These are significant numbers.
Many people seeking funding make the mistake of believing that just providing a listing, description and possibly a video is sufficient. In the online world, it rarely is; you need to promote it. Powerful images, videos and text that are posted on social media sites and utilize email marketing are required to attract attention and drive people to the appropriate crowdfunding page.
These campaigns should also encourage communications. This serves two purposes. First, it allows you to maintain contact with your contributors. This might lead to additional contributions from them or the sharing of your listing with their friends. Second, it can also provide important feedback to you about what they like or don”™t like about your proposed product ”“ call it a built-in (but not impartial) focus group. This latter purpose can be amazingly valuable.
In crowdfunding, the importance of your pitch is often the make or break determiner in the success of your funding campaign. Essentially, it comes down to your proposed product, the quality of your content and the persuasiveness of your presentation. Does it solve a problem? What is its benefit? Do people see a need for this product and most importantly, were you able to clearly and concisely explain that need and your solution? Finally, is your presentation sufficiently convincing to induce your audience to donate money to you? Have you earned their confidence and trust? Even in crowdfunding, content is still king.
It”™s really interesting how a basic approach that utilizes great content and social sharing can take such different forms. An effective social media marketing campaign requires the creation of great content that is effectively marketed to a segmented target market. It requires consistency of posts, planning, and a clear a call to action that will motivate an audience to take action. Similarly, a successful crowdfunding campaign essentially requires many of the same steps to also achieve its goal of getting funded.
Or, to put it another way, the creation of terrific content that is paired with an effective social media marketing campaign will allow any business to take advantage of a rapidly increasing number of online opportunities that can spur its development and profitability.
Bruce Newman is the vice president at The Productivity Institute L.L.C. He specializes in content creation and digital marketing. Most of his time is spent in the creation of content for webinars and their promotion, email marketing, education and social media campaigns for clients. He is also the creator of the highly popular The Complete Webinar Training Course. He can be reached at bnewman@prodinst.com.
