So you have an idea that could make a lot of money. You don’t have millions sitting in the bank ready to invest into your creation, you know the bank manager will laugh you all the way out to the car park and you have even considered presenting it to the Shark Tank panel on Channel 10. If you’re that committed, perhaps crowdfunding is the answer.
Before getting excited about the prospect of funds pouring in from a bunch of unknowns who may have an interest and belief in your idea, consider the old analogy ‘sounds too good to be true’ before envisaging yourself atop the BRW Richest 200 list.
Like everything in life that dangles a get-rich carrot, there is plenty to be aware of and much homework to be done. It is hard to determine whether crowdfunding is ‘a technology, an industry, or a fad’ (Younkin and Kashkooli 2016, p. 21). Today’s popular social networking craze could become tomorrow’s Myspace. R.I.P. However, if crowdfunding is more than just the latest buzzword, then consider researching beyond the success stories and learn from other people’s mistakes.
Jeremy Losaw (2015) endeavored to obtain crowdfunding through Kickstarter for an aerodynamic car kit he created. Whilst being extremely enthusiastic about his product, he learned some valuable lessons from his first attempt. After testing his product, he discovered it didn’t work as well as he thought it would. Cars fitted with his invention weren’t any faster. Lesson number 1: Will you be able to test your idea before going to market?
The video he presented as part of the sell wasn’t convincing or engaging enough. Lesson number 2: What is the message you want to get out there? Do you seem professional enough and worth giving money to? You are a salesperson and you will have to sell your dream to others if crowdfunding is to be a viable option.
Finally think about a media campaign that can spread the word about your big idea. Don’t just rely on hitting up a crowdfunding site without using all available outlets to find your potential audience. Lesson number 3: Online presence and the capability to network through these outlets are just as important as building a bank of enthusiastic investors.
After all this, if crowdfunding is still something worth considering, remember the mantra of many successful business people. Before success, comes failure. Stay positive, be prepared, be well researched, avoid the Shark Tank, they are already rich and leave my idea of the self-buttering toast alone. It’s going to make millions, who wants to sign up?
Losaw, J 2015, How to Fail at a Kickstarter Campaign, Inventors’ Digest, 31, 4, p. 22, EBSCOhost, viewed 15 May 2016.
Younkin, P, & Kashkooli, K 2016, What Problems Does Crowdfunding Solve?, California Management Review, 58, 2, pp. 20-43, EBSCOhost, viewed 15 May 2016.