Crowdfunding: Six Lessons Learned from a Successful Business Project

Crowdfunding is no longer purely a means for new startups to get off the ground. Nowadays, already-established companies are taking to sites like Kickstarter to launch new products that, in turn, can produce tons of advantages -- including an intense learning experience -- beyond the up-front capital.

We recently spoke with Alison Grieve, CEO and founder of Scotland-based Safetray Products, to get first-hand insight into her successful recent Kickstarter campaign that raised funds to manufacture her new invention, the G-Hold (grips and cases for iPad, tablets, and iPhone).

She learned several valuable lessons from the Kickstarter venture:

Connections are Key 
Giving anyone a chance to be a part of a production process opens up the lines of communication between the producer and those interested in donating. That feedback can be essential. The key is in the connection with the backers.

"You can really lose that connection if you have a business model of selling through distribution, wholesale or even retail," Grieve tells us. "Crowdsourcing gives you invaluable insight into the wants, needs and desires of your ultimate end user. It really is an unparalleled method of funding."

Be Genuine and Receive Genuine Support 
Hearing someone's story firsthand can be the kicker. Think about it: who doesn't love to support the little guy? A crowdsourcing page can give businesses the chance to open up about their ambitions. It also can help potential backers understand businesses' perspectives and why they need the backers' support.

"I got the sense that many backers are actually motivated by the desire to help in somebody's journey toward achieving their dreams- not just in the product itself," Grieve says. "It was a hugely emotional experience, and both myself and the team felt such gratitude for the kindness extended by friends and strangers alike."

Build Social Media Power to Aid Your Launch 
Grieve also learned a lot about the social media monster. Were it not for the network of fans and friends on platforms like Facebook and Twitter, it would have been impossible to share the Kickstarter page with so many strangers; strangers as far away as Australia wanted to be a part of the project. She says, "I have a background in sales and in sales training, and I always used to emphasize the importance of customer referrals. Social media provides a huge opportunity for mass referrals, through both personal and business networks."

Customer Feedback is Insightful 
Backers were also friendly and quick to send Grieve the reasons for their support. And she was able to glean from the comments and private messages all about the many G-Hold uses she may not have imagined beforehand. "I learned that the G-Hold would be used in quite a number of professional applications," she says, "from teaching to script reading for actors, from pilots emailing on the move, to photographers checking their images as they go. It's so great to think of all the new homes, jobs and adventures that the G-Holds will find themselves traveling to."

The Possibility of Failure is Real 
Not at all for the faint of hearts, crowdfunding can certainly set your hopes high if the response is positive, but what if it turns sour? "You have to develop a thick skin and be open to criticism," Grieve says. "Kickstarter is, admittedly, a very public judgment of your product and it is very scary to put your invention out there on that level to be judged. But if the crowd had not taken to it, I would have had to accept that it just wasn't the right time, the right product or the right market."

The Rush is Remarkable 
Just as a marathon's finish line can generate euphoria, so does an accomplished Kickstarter goal. If deadlines, mystery and adrenaline aren't your forte, then maybe crowdfunding isn't for you. Nevertheless, the rush is worth it if you can stand the wait and are prepared for the fight.

"I am no stranger to startups and the intense ups and downs that you experience when fighting to get established," Grieve explains. "I would say that crowdsourcing is a condensed version of that crazy rollercoaster, and whilst my knuckles were chalk-white throughout the campaign, it leaves you feeling thoroughly buzzed, elated and humbled. But frankly, I'm relieved that it is all over!"

So whether you're putting yourself out there for the first time, launching a new product, or simply raising business funds for exposure, remember that the road may be scary but still so beneficial. Making connections, knowing your client-base and possessing an awareness of your own strengths are all lessons to be learned in any crowdfunding adventure. Hold on tight, and savor the rush.

What projects have you or someone you know backed recently?

Diana Gomez is the Marketing Coordinator at Lyoness America, where she is instrumental in the implementation of marketing and social media strategies for USA and Canada. Lyoness is an international shopping community and loyalty rewards program, where businesses and consumers benefit with free membership and money back with every purchase. Check out Lyoness on Facebook.

About the author

Diana Gomez, Marketing Coordinator at Lyoness America, is instrumental in the implementation of business marketing strategies for USA and Canada. Lyoness is an international shopping community and loyalty rewards program, where businesses and consumers benefit with free membership and money back with every purchase.


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