In today's fast paced technological world, people are no longer struggling with getting enough capital to start a business or develop a new product. With the growth of the internet and social media, it has become easier to start a business and change the world with new technology. Crowdfunding is a system that allows young entrepreneurs to get capital and start a business.
With crowdfunding, a large group of people donate various amounts of money to help attain the capital you need. Crowdfunding has been made easy using social media platforms and crowdfunding websites to bring investors and entrepreneurs together. Crowdfunding increases entrepreneurship by increasing investors from whom funds can be raised apart from the traditional circle of relatives, friends and business owners
Sounds like a good entrepreneurial step right? But without proper planning, you are doomed to fail. Having failed in my first crowdfunding attempt, I now understand why I failed. Using my experience, I have formulated some of the mistakes that can make your crowdfunding project a failure.
1. Not Understanding the Target Group
Well, I did not test my product and services to the community. A big mistake. If I had tested it before setting up my crowdfunding campaign, I would have evaluated the possible success of the business. Even if you have a good idea, it is wise to test it before starting a crowdfunding project. Create value and educate your potential customers and be sure that your product is something people are interested in.
2. Build a Social Media Crowd
When I started my crowdfunding campaign, I only had about 1000 friends on Facebook. I believe that was the main reason I didn't get enough funds from crowdfunding campaign. Make sure you have a huge crowd in all social media networks. A big social media will not only increase your financial funds but will also share your campaign with their followers. Twitter and Facebook Marketing makes it easy to identify and connect with supporters while building your target audience. It's also very important to engage in niche communities on places like Reddit and Linkedin.
3. Setting a Realistic Funding Goal
Don't set a very high funding goal that you know you can't get. Set a realistic funding goal that people can contribute. In crowdfunding, you can only get the money if you have reached the set goal. If the money contributed does not reach your set goal, then you will lose all the money.
4. Not Having a Deep Understanding of the Concept
Before starting your crowdfunding campaign, make sure that you totally understand your business idea. Most crowdfunding projects fail because the idea presented is vague, and the pitch comes across as a request for a handbook rather than an investment opportunity. Demonstrate the value of your business and its viability in the marketplace.
5. Be Authentic
The beauty of crowdfunding is that it's social, and one of the reasons that people invest is the emotional reward of helping an entrepreneur get started. Be true to who you are, be realistic with your claims and make trustworthy videos. By doing this, you will build a genuine trust in your potential customer thus guaranteeing your success.
I now know where I went wrong and I vowed to never repeat the mistakes again. Learn from my mistakes and you will have a successful crowdfunding project.