“You might think you have the best product going but the open market decides that.” – Robert Herjavec, Multimillionaire and Shark Tank Investor
We all know the numbers by now – roughly 65% of all crowdfunding campaigns fail.
According to Kickstarter the day I wrote this article – their published success rate is just 36.65%
Indiegogo doesn’t publish their stats but it’s commonly accepted that their success rate is 10% for flexible funding campaigns and 17% for fixed funding. That’s even worse, right?
Numbers don’t lie; Achieving crowdfunding success is harder than trying to climb a greased-up flagpole.
There are lots of determining factors behind why some crowdfunding projects succeed while most fail. Let’s focus on the single most important factor:
A sufficient number of people like what you’re doing and want to help you make it.
How does one go about attracting backers to a crowdfunding campaign in sufficient numbers?
Crowdfunding promotion services.
When you advertise a crowdfunding campaign you give that crowdfunding project a chance. That’s because your crowdfunding campaign has no chance to succeed if nobody hears about it.
With effective crowdfunding PR and powerful crowdfunding campaign promotion people get the news. The word spreads. Buzz is created (pun intended).
And when enough people hear about a crowdfunding campaign they get curious. Some of them get curious enough to go see what all the fuss is about and check out the project for themselves. That’s how you get crowdfunding campaign traffic.
Once you get lots of eyes on your crowdfunding project, enough of those eyes needs to tell the brain that what they’re looking at is something cool. Something interesting. Something they want or need.
That’s when you get crowdfunding campaign backers…
They want that pair of Oculus 3D glasses. Or that Pebble Watch.
They WANT a smart kitchen appliance that automatically sends an alert to their phone when they’re running low on rice.
They want the best darned BBQ sauce ever to grace a slab of ribs.
And that’s also why potential crowdfunding backers DON’T back a particular crowdfunding campaign; they don’t want it.
Bloggers and journalists who decide to pass on your press release have a similar feeling; they aren’t interested and don’t think their audience will be either.
This is perhaps one of the harshest realities any entrepreneur can face and we’re often given the thankless task of explaining this bad news to some of our clients.
We touched on this precise topic in this crowdfunding blog back on October 21st (See Crowdfunding Tips: Reaching a Crowdfunding Audience) The crowdfunder I’m describing here is the category one crowdfunder – as explained in the article.
The category one crowdfunder just can’t accept the facts of life with crowdfunding failure. They’ll blame the platform (Indiegogo isn’t popular enough, Kickstarter ignored me), they’ll blame the PR firm or crowdfunding digital agency (my marketing sucked – I’m gonna KILL Howard over at Crowdfund Buzz) or they blame the public at large (too many people are too stupid to understand how cool this is…) They’ll look for blame for their crowdfunding campaign failure everywhere except where they need to; in the mirror.
Some products really do need a second chance and sometimes that second shot at success works and works well (See our podcast How to Turn a $15,000 Crowdfunding Goal Into $500,000+)
That’s why we’re happy to provide free crowdfunding project promotion and crowdfunding campaign PR to our clients on the second try for free. We’ve seen lots of our crowdfunding promotion clients achieve crowdfunding success the second time around.
However, if your project has not achieved the elusive status of being a crowdfunding campaign success story after two failed attempts it’s time to accept the fact your product or service is not making the cut with crowdfunders.
Here’s a prime example of someone who has earned all my respect for trying again — but needs to have a serious talk with herself and her future plans for her invention Add a Handle:
Tara mixed things up a lot in terms of funding goal, project presentation and even the platform. She also spent an impressive amount of money on Facebook Ads…
… and she also did some serious social media outreach — that’s apart from our social media crowdfunding promotion that we’re giving her for free with our “second shot” policy for our clients.
Did you notice her Facebook ad was seen over 11,000 times?
It’s clear that despite all of the time, effort and money she poured into Add a Handle – it’s just not being embraced by the public. Not nearly enough consumers are being persuaded into becoming crowdfunding backers because they just aren’t interested. Crowdfunding success for her creation is just not in the cards.
That’s when it’s time to move on. Tara and everyone else in this disappointing position needs to evolve. They need to become a category two crowdfunder and accept the facts, go back to the garage or the basement or the drawing board and cook up something else that the public might be more interested in.
Tim Ferriss, the wildly popular author and entrepreneur has shared what is perhaps one of the most humblest product fails of his own – and what he learned from it – in the wildly popular 4 Hour Work Week. You can read a super-brief summary of his hard-won wisdom here.
We opened this blog post with a Shark Tank quote and we’ll close it with a full Shark Tank episode. While every episode of Shark Tank is as entertaining as it is educational, Season 6 Episode 7 gives entrepreneurs a crash course on how consumer demand drives product sales. Hitting a crowdfunding goal can be viewed through the same lens; crowdfunding campaign success is decided by the people who ultimately decide to devote their dollars and becoming backers. While you should watch the entire show below you’ll definitely want to zero-in on the episode starting 27:28 in (That’s 27 minutes, 28 seconds into the show)