As a word, “crowdfunding” is part of the vernacular at this point. As a thing you do when you’re trying to launch a product, much mystery remains.
At the Smart Kitchen Summit this afternoon, Cheryl Clements of Pieshell and David Rabie of Tovala spoke to Ashely Daigneault and clarified some of the murkier details about crowdfunding. The panelists went on to discuss how a company — especially an early-stage startup — can successfully follow through on a campaign. Here what companies should be thinking about long before they hit the launch button on a crowdfunding endeavor:
1. Think of it as marketing, not raising money.
In some ways, “crowdfunding” is a misnomer. “It should be more focused on marketing because if you come to the table [just] trying to raise money you’ll have problems,” said Rabie, whose own company raised over $255,000 for its smart oven and corresponding food delivery service.
Clements agreed, reminding people they shouldn’t expect any crowdfunding platform to bring the audience to them. Normally, it works the other way around, and that starts with good, thorough marketing.
2. Expect to do a lot of pre-launch marketing prep.
One that note, Rabie outlined a very specific set of tasks the Tovala team did around marketing long before launch ever happened. That included getting specific people to use the product and collecting feedback; building up an email list; building up a relationship with the press, so that at launch, Tovala wouldn’t land on the internet as a complete unknown.
“That pre-marketing is really what’s going to separate you from the masses,” said Clements. Her own food- and bev-focused crowdfunding platform, Pieshell, requires companies to raise $25 percent of their goal privately before the campaign launches to the public. They do this, she explained, because it’s the best way to tell if a company has put in the muscle needed to do effective crowdfunding.
3. Be honest with your audience about delays and other glitches.
One common issue with crowdfunded products is that their release dates are often delayed. The reasons this happens are less important than how you as the company respond to those delays. Both Rabie and Clements agreed honesty and transparency are the two key words here.
“[Companies] have to be brutally honest and transparent,” said Clements. Even when a product is delayed or experiencing some other operational glitch, explaining that to an audience and asking for their support is far more effective than three months of silence. Ghosting them does nothing beyond ruining your company and your product’s reputation.
4. Keep Iterating.
One thing both Rabie and Clements emphasized was that crowdfunding anything is a process, not just a one-off campaign. Rabie in particular left us with some solid advice that would apply to pretty much any product, food or otherwise: “Companies that win are the ones that survive the longest. They keep iterating until they’re really able to find their product-market fit.”
That may not happen with the first campaign, or even the second. But if you’re willing to keep building, marketing, and communicating with your supporters, that product-market fit is bound to surface eventually.