We asked for short, snappy, helpful video for Crowdfunding Week 2015 and the shortest, snappiest and most helpful of these (so far anyway) is from management consultant and Crowdfunding expert Tim Wright of twintangibles. Here’s my summary of what he has to say:
Crowdfunding is great not just because it’s bringing more funding into entrepreneurship, projects and campaigns of all sort and that money can be a different character to traditional kinds of funding… but also:
- Validation: Running a successful campaign validates the nature of your project with the people who are likely to be the consumers of the goods or services you’re putting out there. They’re the people saying to you “this is a good idea”., supporting you, telling you something you didn’t know before.You can take that validation and say “look, it’s not just me that thinks this is a good idea, there’s a whole stack of people out there that say it’s a great idea”
- Advocacy: Amongst the people who are validating are those who’ll cleave to it, they think it’s a great idea and become advocates for you, they reach out for you. That’s how Crowdfunding works and it’s a really very powerful and useful asset to have.
- Price Points: If you’re taking a new product to market any circumstance one of the most difficult things to understand in any circumstance is what is the appropriate price-point. There are all sorts of ways of approaching this in the traditional manner but crowdfunding provides and extraordinarily powerful and quick way of establishing what the market will stand for your goods or services… which is incredibly useful, especially if this is innovative.
- Visibility: The process means that you have to get the message out there in all sorts of contexts and the visibility you gain is of immense value.
- Rigour, Self Scrutiny & Due-Diligence: If you run a crowdfunding campaign it is demanding and places tremendous expectations on you. You have to get this right so it makes you do the stuff that you keep putting off to another day: Looking at your business, looking at your project, understanding your market and marketing, getting your messaging right, structuring all your social and relationship capital. All the stuff that we think we should do but probably never get around to.
You are doing all this all at the same time as raising money – all in one operation or campaign. So the process of running a Crowdfunding campaign is an incredibly good thing to do – for your business, your project and for your entrepreneurship.
Tim provides an excellent summary and many of lessons apply equally to equity crowdfunding as to Kickstart/Indiegogo style rewards crowdfunding – which incidentally is a great preparation for an equity campaign validating all of the above as it does, as well as building a crowd of interested potential investors.
Barry James is a serial tech entrepreneur and technologist, founder, writer and conference creator Barry created TheCrowdfundingCentre, now a global resource for #Crowdfunding, and VentureFundingHubs an innovation to support entrepreneurs globally. He has a long history in #Fintech stretching back to the late 1970s. Founder of the UK’s first national conference, Crowdfunding:Deep Impact, he has been at the forefront of the development of Fintech and crowdfunding in the UK, and internationally, since its earliest days helping found the UK’s All-Party-Parliamentary-Group on the subject and influencing the nature and direction of regulation. As a pioneering systems and eco-system architect, he and his team remain active in creating new models and new technology, including the creation of more than 70 funding hubs worldwide.