The Culture of Crowdfunding
Nearly 10 years ago, the thought of raising startup funds through an online consumer campaign that doubled as a marketing and PR tool was absurd...
Yet here we are. Today, that is exactly what is occurring with crowdfunding. Crowdfunding was and remains a simple but innovative method of alternative funding in which modern day startups, consumers and even small scale investors are utilizing to achieve more and collectively benefit, together.
The crowdfunding concept is based on three types of entities: the project initiator, often a startup or small scale organization, who proposes the idea, product, or even service to be funded; individuals or groups who support the idea; and a moderating organization, otherwise know as the platform, that brings the parties together to launch the idea. With an abundance of platforms to choose, each internet-based organization offer different risk-reward options for the project initiator and supporters. Some are equity, debt or even charity based, but the two largest platforms, Kickstarter and Indiegogo offer supporters something more tangible and in many cases exclusive: rewards. Reward based tiers offer an assortment of products and services, often available exclusively on Kickstarter and Indiegogo, at a reduced price or limited quantity to jump-start support.
Reward-based platforms demonstrate the driving factor in the growth of internet crowdfunding: the formation of a unique community culture. Searching for innovative ideas and unique products and services, the interested community found on each platform form a culture that defines the style, tone, and originality found in successful projects and campaigns.
Through the creative tiers, both tangible and non-tangible, reward-based crowdfunding campaigns support the possibilities of investing in something unique while benefiting from the exclusive tiers. Every aspect of the campaign strategy- from company branding, community updates and comments, to the video (campaign videos are a necessity for success) must be a conscious representation of transparency and fit the style of the campaign culture.
Done correctly, a campaign can often spark a FOMO (fear of missing out) for may who are interested. The crowdfunding culture supports the trend of an idea going "viral" thereby increasing exposure across multiple channels and in turn forming an organic marketing campaign for the project initiator and overall business. Even if the campaign may not meet its funding goal, if a company is properly exposed through social media channels it can greatly benefits from the newly reached markets.
Throughout my experience as both a crowdfunding campaign manager, supporter of multiple projects, and an aspiring marketing and business student I have experienced the first hand benefit of crowdfunding from all sides. Projects I have successfully campaigned include the Vidonn PulseBand A6.
The future growth of this concept will be interesting. The way I see it, so long as their continues to be a community driven by inspiration, innovation and creative solutions it is clear that crowdfunding it here to stay!
