Why Crowdfunding Isn't Just For Novice Entrepreneurs

 

 

Crowdfunding isn't necessarily your first order of business when starting up.

 

But sites like Kickstarter can help get your company off the ground, in more ways than one.

 

Having played ice hockey in college, Ministry of Supply co-founder Kit Hickey imagined clothes that could blend the airiness of sports jerseys with the professionalism of dress shirts.

 

After meeting with two like-minded students at Massachusetts Institute of Technology, they created a dress shirt that uses NASA material to regulate body temperature and prevent unsightly sweat stains.

 

Intent on starting a business around the innovative business clothing, the co-founders launched a Kickstarter campaign in 2012 and raised more than $400,000 in a month, becoming one of the most successful fashion projects on Kickstarter at the time. Investors who were initially on the fence about funding the fashion-tech company then wanted in--helping raise about $5 million for the business, according to Hickey. 

 

"We went on Kickstarter with the idea of it being the first step to build a business, says Hickey. "It was cool seeing an amazing community support it."

 

It's not just a funding vehicle, however.

 

Entrepreneurs often use Kickstarter to test if their products will have market appeal.

 

After launching its first Apollo dress shirt on Kickstarter, Ministry of Supply created more than 25 products on its own including dress shirts, v-necks and chinos. But in 2013 when the company wanted to market anew coffee-infused sock, which absorbs odors, it once again turned to Kickstarter.

 

Hickey says the site is a great way to gauge market demand for a product, allowing entrepreneurs to "test the waters" before taking the plunge.

 

As Ministry of Supply continues to grow, Hickey credits Kickstarter with helping her quickly learn the ropes of starting a company from the ground up--from building a reliable supply chain to providing timely customer support.

 

Hickey and Kickstarter's Community Manager Julio Terra offered up their top insights for building a successful crowdfunding campaign below:

 

 

 

1. Have a business plan.

Hickey says her team used Kickstarter knowing they wanted to start a business.

 

That long-term mindset helped them look beyond the immediate concerns of fulfilling the wishes of project supporters and focus on creating a sustainable business model.

 

Kickstarter owners who map out their financial plan before starting a campaign are more likely to continue operating regardless of whether they successfully reach their goal, according a 2014 study of project creators.

 

2. Make it unique.

Although your product's brand may look great on its Kickstarter page, you want to make sure it can stand on its own.

 

One way to do this is to imagine whether your product will resonate with customers in a storefront. "If you see it on a shelf of Nordstrom... are [customers] still going to know that it is unique, are they going to understand the product story and quickly grasp how it fits into their lives?" She adds that her company used its Kickstarter video to strengthen the Ministry of Supply brand, creating a narrative around its clothing.  

 

3. Proceed with passion.

People are putting down money for your project, and as such, they want to know that you care about it as much as they do.

 

Terra says project owners should think of their backers as collaborators instead of consumers.

 

That said, it's important to clearly and quickly tell a Kickstarter user what a project is about using the project page's video and description.

 

Terra says Kickstarter's favorite videos use a do-it-yourself approach and get to the point quickly.

 

4. Involve the community.

Sometimes, community input can be essential to the project's design itself.

 

When Kawamura-Ganjavian created the Ostrich Pillow, the portable pillow that wraps around your head took off really fast.

 

But people wanted something that they could easily wear in public. With the user input, Ostrich Pillow came out with a pillow that can wrap your neck and covers your eyes like a bandana.

 

Terra says, "Our whole system is really optimized to help creators build community around what they are doing, because you are going on this journey with your backers."

 

5. If you succeed, try again.

Project creators who come back to Kickstarter after successfully funding a project are more likely to repeat their success, according to Kickstarter's own research.

 

Like Ministry of Supply, a backer who returns to Kickstarter after successfully funding a project has a 73 percent chance of reaching his or her funding goal the second time around.

 

After smartwatch company Pebble Technology raised $10 million it seemed outlandish to think it could raise more in a second funding bout.

 

But Pebble did just that, and more than doubled its initial pledges with the release of Pebble Time and Pebble Time Steel, which has an even longer-lasting battery life.  

 

http://www.inc.com/edward-cox/five-ways-kickstarter-can-help-your-small-business.html