September 26th, 2018
3 Ways to Use CrowdFunding for Market Research
An unsuccessful crowdfunding campaign may seem devastating. Ostensibly, if you didn't reach or exceed your funding goal, you can safely assume that what you offered didn't fit a specific need or wasn't good enough to warrant public funding; or simply that your campaign didn't spread to enough pockets.
And of course, many entrepreneurs might see an underfunded campaign as a failure; it didn't succeed, so there is no other way of looking at it, right? Not exactly. While an unsuccessful crowdfunding campaign may preclude you from achieving your original goal, it may in fact offer you deep insight into the market you intend on reaching, as well as why exactly you didn't meet your expectations. If you are unsure of how a failed crowdfunding campaign can be of use, consider the following three ways that a soured attempt may really be viewed as vital research.
1. Your Offer Doesn't Fit the Market - Yet
This is perhaps the most important aspect about an unsuccessful crowdfunding campaign. An unsuccessful campaign doesn't necessarily mean that your offer has no place in the market; instead, it could signify that your product or service has qualities, but in its current form the public doesn't need it. But how could you have known this before you started? One artist and film producer compares crowdfunding to the chicken and the egg theory, positing that entrepreneurs want to use crowdfunding to spread awareness of an idea, but won't know about demand for the idea until they begin funding.
If funding goals aren't met, this may simply help you identify the public's opinion on your offer, and what you can do to make it better. An example crowdfunding campaign called the Pink Energy Project by Sarah Hamer intends to create "The world's first Pink Wind Turbine with a portion of the proceeds going to breast cancer research."
2. Your Content Didn't Match Your Offer
Are you hoping to fund the creation of a new piece of video game technology? Or is your goal to help launch a financial startup business? Whatever your objective is, it is necessary to support it with the right form of content; failing to do so may hurt your campaign.
What exactly does this mean? If you are funding a product, then photographs, video demonstrations, and even offers to test the new project may draw funders. Similarly, if you hope to acquire capital to start a business, detailed images of a plan will appease potential donors before the funding period ends.
A previous campaign may help you understand what content is necessary to advertise your offer.
3. You Targeted the Wrong Group
At the outset of your crowdfunding campaign, you may be confident that your project will win the hearts of a certain demographic. In light of this, you target this group, only to find out that there was no demand after all.
Before you call it quits, though, understand that you may simply have been aiming your efforts in the wrong direction. By interacting with the donors and discovering their preferences, you may begin to realize that, while your product has a spot in the market, you simply need to shift your strategies to find the right place. An initial unsuccessful campaign can help you sift through a larger group of individuals in order to find a smaller cadre to whom you should cater.
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Learn more About Us | Support Canadian Crowdfunding.