Taking small amounts of capital from a large number of willing individuals in order to finance a business venture sums up crowdfunding. A simpler way to define crowdfunding is the gathering of potential investors to fund a business startup idea.
If you have a brilliant business or startup idea – such as a new mobile app – that you’d like to actualize, but lack the necessary funding, you ought to consider crowdfunding over other financing options such as secured and unsecured loans. Crowdfunding can help you achieve the entrepreneurship status that you’ve always dreamed of!
In order to organize a successful crowdfunding campaign for your business idea, here’s a quick checklist for all the essential steps involved:
- Have the right product
- Identify your audience
- Set your funding goals
- Develop and share your story
- Promote your campaign
- Execute your campaign
Step 1: Have the Right Product
The first step toward launching an unmatched crowdfunding campaign is to know the product inside and out.
If your product isn’t the right fit for crowdfunding, it will never make it to the finish line. Put your research skills to use and explore other mobile applications that have successfully managed to attract the required crowdfunding and are doing well in their market. This should give you an idea about whether or not your mobile app has potential.
During the initial stage, you have enough opportunity to tweak your idea with necessary amendments and avoid failing at a later stage of the process. Use a few of the following techniques to ensure that your mobile app is a perfect fit for crowdfunding:
- Market test your app through surveys, analytics gathering and user research to see if your app has sufficient potential.
- Research and understand your competition as deeply as you can. This will help you create a competitive advantage for your app.
- Prepare a sales pitch that will have investors longing to finance your app over others.
Step 2: Identify Your Audience
This is yet another paramount step in your campaign planning. Building an audience requires the identification of one. At this stage, if you are confused as to what your specific audience needs, ask yourself the following questions:
- Who are you targeting through this campaign?
- What does their profile look like?
- What is their story?
- Can they possibly relate to your application in any way?
- Why should they buy your idea?
If you have a definite answer to all these questions, you are sorted! If not, you ought to look for answers before going forward with this campaign. You could be targeting a wide pool of donors based on how extensive your financing requirement is, or a narrow pool with just enough donors to kickstart your idea.
While you are at it, decide on the possible rewards that you can offer to your prospects. People who give often appreciate something in return. Offer realistic rewards which you can actually deliver.
Step 3: Set Funding Goals
In this crucial stage of the process, you are required to set realistic and achievable funding goals. Each crowdfunding site has a unique funding model, so before you decide on one, be sure to read through the model and understand it adequately. This is where you are required to set a funding goal that you wish to achieve through this campaign.
The following few questions and their responses will set the pace for you at this particular stage of the campaign:
- How much money does your startup require?
- How many people are expected to pledge for your business idea?
- Do you have a backup plan in place if you don’t get the funding you need?
Setting goals is vital to the overall success of your crowdfunding campaign as it draws a clear picture of what you are trying to achieve. In case you don’t make it to the finish line, what contingency plan do you have in place?
Be mindful of that fact that a funding goal has to be decided now and cannot be altered at any later stage of the campaign, so take your time, think it through and make an informed decision.
Step 4: Develop and Share Your Story
Crowdfunding is heavily reliant on articulating the perfect story to impress your audience. People love a good story that has an inherent appeal to it. In a previous step, you have figured out your target audience’s story – so now it’s time to develop yours! Anyone considering giving you money would be fascinated to hear your story of turning a simple business idea into a reality.
Steve Jobs’ story was both reinforced and shared by Apple. You can have your business be the face of your story, and communicate it through visuals for maximum effect. Your pitch is the perfect moment for you to convey your story through a fun, interactive and compelling video describing the following:
- Main product idea
- Its potential benefits
- How it functions
- Its unique selling proposition
- Your passion behind the idea
A visual demonstration of your sales pitch can make all the difference. Just be original!
Step 5: Promote Your Campaign
Now, it’s time for the much-awaited PR outreach. The modern world is consumed by social media and the internet, making PR easier and quicker than ever.
A major misconception that most aspiring entrepreneurs have is their projects getting noticed without any proactive marketing efforts. You have to work on your project to acquire the attention of potential investors. Put in the work to get noticed.
Promoting your crowdfunding campaign is, thus, vital. You can make use of commonly used platforms to get the word out:
- Twitter, Facebook, LinkedIn and Instagram
- Look up media outlets through a Google image search (a similar campaign image is all you need to upload to find related blogs, news, and other social media posts)
- Reach out to bloggers to get coverage for your campaign
- Host a live event, either online or publicly, to engage investors and investor groups
Your commitment to this campaign matters the most. Find all possible venues—online or physical—to promote your campaign and spread the word. At this point, you can leverage all your contacts and networking skills to meet with people and get connected to potential investors. Use every marketing channel there is and create awareness. Communication is essential to a crowdfunding campaign.
All essential updates regarding the campaign must be circulated among all those backing your project. Keep all parties informed on where you’re headed and what to expect in the campaign process. If you are using crowdfunding platforms, they come with built-in tools to help you keep everyone updated and on the same page at any given time.
Step 6: Execute The Campaign
Now, this is the step that you’ve been working towards: the execution of your crowdfunding campaign. At this stage, you can look up pre-launch ideas in order to create a buzz before the big launch. This works well for getting people hyped up for what’s to come. A pre-launch could be done through a campaign website or through a landing page.
Moreover, you can have your family members on board and connect with their respective networks to create awareness regarding this pre-launch. This would be the perfect time to engage with online community groups and make an appearance on forums, news sites and blogs.
You ought to make yourself visible to the industry to present your business idea and be the face of your product. This may be achieved by making appearances at special events and on social media. The more accessible you are, the higher your chances of coming into contact with potential investors and interested parties.
On the actual launch date, use your social media to officially announce the campaign’s big launch. Use emails to reach out to personal and professional contacts, asking them to pledge for your campaign. Bear in mind that your campaign success depends on how well you can communicate with people, so people skills are crucial.
It’s a Wrap!
If you follow this 6-step guide to organize your crowdfunding campaign for your mobile app, you have a greater shot of standing out.
Know that your business idea needs to be strong, appealing and conveyed through a structured process in order to gain acceptance from potential investors. If you keep a focused approach and make use of the precious time you have on this campaign, you’ll meet and exceed your funding goals in no time.
Guest Post Written By Taylor Ryan
A mentor, startup junkie, technical marketer, presenter, and a growth hacker. Taylor grew up in Washington DC, but he has been living in Denmark, Copenhagen, for the last 2.5 years, where he is currently CMO of the venture-backed 70+ employee Ai company Valuer.ai. In the startup scene for 11+ years, he co-founded 5 startups. Taylor has also published a few marketing ebooks and consulted independently on startups and growth for 4+ years. You can follow him on LinkedIn.