Selling a product before it exists
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount. The Internet is a perfect medium to reach individual investors from all over the world. And it has truly taken off. Successful platforms like Kickstarter and Indiegogo already account for thousands of successfully funded projects. While they focus on individuals who want to invest in products that do not exist yet, others focus on entrepreneurs by offering loans with attractive interest rates, like the Dutch initiative Geld voor elkaar. Some also offer the possibility to invest in company shares, like Symbid. Like these varied approaches, the amount of initiatives continue to grow as well.
Desirable and feasible
If you're considering crowdfunding as an option to realize your dream product, there are a few things to keep in mind.
First of all, you need to make sure to present your idea - your dream - in the most appealing way possible. Attractiveness as a factor, hugely impacts the level of appreciation for the idea or product you’re trying to launch. But, in the end, the product design has to drive home the story behind your product or idea.
"Make sure to maximize attractiveness, and minimize feasibility risks. If you do your homework, you've got a better chance at successfully funding your project and its realization will be a smoother ride."Maarten Wilming, director Spark design & innovation
Besides creating an offer the crowd can't refuse, you need to make sure that it's an offer that you can actually bring to fruition: that it is more than just a dream. It has to be feasible, technically and economically. You will need to perform some preliminary product development work to make sure your product idea can actually be realized.
When you're certain your idea is both desirable and feasible: go for it! If your funding has been successful, you're left with what may be the biggest challenge: actually turning your plans into reality. Don't underestimate the complexities of this phase. It may not be as sexy as the first step, but it's at least as important. Setting up the supply chain, taking care of up-front investment costs, meeting certification requirements, managing production cost and a whole set of other things. Organize the support you need and make sure to select the right partners.
More information on crowdfunding:
If you have a great product idea but you don’t have the money to get it into production and onto the market, consider getting your funds from the crowd. There’s less risk compared to a bank loan. Also, it’s free publicity and a real consumer acceptance test.
In order to win the hearts of the crowd, you will have to make an effort presenting your idea and project plan in an appealing way. The do’s and don’ts for this are thoroughly explained on some of the crowdsourcing platforms.