There are a number of crowdfunding campaigns that have been successful over the years, but the verdict is still out as to whether or not the companies behind those campaigns are going to deliver results. Hardware is like the modern mousetrap of the tech industry. There have been thousands of new patents for mousetraps, but not all of them will pay off. The same is true with tech.
Here are 5 facts that we have learned about hardware crowdfunding from the successful campaigns that have been tracked over the years.
1. Crowdfunding Campaigns Don’t Run by Themselves
Even though it is something that everyone should know at this point in time, there is still a certain expectation that a crowdfunding campaign will run on autopilot. This just isn’t true. For a campaign to be successful, fundraising has to start several weeks before the campaign is launched. Most hardware campaigns have raised at least 50% of their overall goal before they ever go live.
2. The Scope of Many Projects is Just Not Realistic
The biggest problem in hardware crowdfunding is finding how to make a manufacturing process efficient. Many hardware projects haven’t even thought about manufacturing before they even hit the crowdfunding campaign. Some think that China is going to be the answer to their problems, but sometimes it just is not. The simple truth is that a funded hardware campaign might not ever ship. The $1.5 million failure of Kreyos is proof of this.
3. Most Projects Aren’t Very Original
People who like to back hardware crowdfunding campaigns call themselves “Early Adopters” or “Innovators,” but what they really are is a copycat. Most tech campaigns are actually copies of previous campaigns that have already been run. The only difference is that the company behind the campaign is trying a different crowdfunding strategy or there’s another business who thinks that they can create a similar project that has already proven to be successful.
4. A Failure to Fund Does Not Mean a Failed Concept
The Coolest campaign proves that an idea can have new life breathed into it. In 2013, Coolest attempted a crowdfunding campaign that raised some money, but it failed to meet its goal. The company looked at their concepts, decided to create a better prototype, and then launched a new campaign in 2014 that would become the largest crowdfunding amount ever raised at $13.3 million using what was essentially the same product.
5. The Niche Customer Base is the Most Important Consideration
Any product can find success if it can reach its target audience. The best way to do this is to use a polished, professional prototype that can give tangible evidence to a potential backer that the concept being proposed really works.
Just because a crowdfunding campaign is able to meet its goals doesn’t necessarily mean that a new startup business is about to be created. Sometimes crowdfunding is about idea validation only. With that consideration in mind, it relies on the backer to make smart choices that are based on tangible rewards instead of emotional donations.
Strong proponent of individual liberty and free speech. My goal is to present information that expands our awareness of crucial issues and exposes the manufactured illusion of freedom that we are sold in America. Question everything because nothing is what it seems.