When you launch your product on Kickstarter or Indiegogo, the hope is always to raise a lot of money. The more the better. Of course.
However, your crowdfunding campaign might not do as well as you’d hope. Consumers may not buy your product in droves, and you might not hit your crowdfunding goal.
Here are three critical lessons to understand if your crowdfunding campaign doesn’t go as well as you had hoped.
1. View Kickstarter Not Just As A Platform For Fundraising, But Also For Product Validation
When we think of crowdfunding, we readily think of raising funds for a new product idea. The word “funding” is in the very name of “crowdfunding.”
Yet, if you view crowdfunding as simply a platform for raising funds, you miss half the picture.
Crowdfunding is like a two-sided coin. One side of the coin is money. On the other side of the coin is product validation.
When you run a crowdfunding campaign, if your flip doesn’t land on the side of money, that’s okay. Even advantageous.
Entrepreneurs can spend year after year working on a new product idea and trying to make it work. Because they are slow or delayed in getting to market, they can waste hundreds and thousands of dollars in both time and actual out-of-pocket cash. And they can waste even more in opportunity costs.
To be able to quickly and cost-effectively validate whether there is a market for your product is invaluable. Crowdfunding allows you to do just that.
As MasterCard might say: “One failed Kickstarter – $4,565. Business validation in less than 6 months – Priceless.”
And truthfully, quick business validation, on a product that has no future, is priceless!
So if your crowdfunding campaign is a flop, learn from it. Take what lessons you can, and pivot. Move on to the next thing.
2. Be Committed To Success, Not Your Product.
The most successful entrepreneurs are committed not do their product idea, but to success.
For an entrepreneur, especially a first-time entrepreneur, being committed to success, and not the product, is a critically important distinction. (And very hard to do, I might note).
Beginner entrepreneurs are affected, even plagued, by what I call entreumyopia.
Entreumyopia is when an entrepreneur believes his or her new product idea ‘IS’ the most amazing product ever and ‘WILL’ revolutionize their industry.
It’s not that this new product idea ‘may’ or ‘can’ or ‘could’ be amazing and make lots of money, but that it ‘IS’ and ‘WILL.’ And any suggestion to the contrary is ludicrous and ignorant.
As a personal example, in 2009 I met with one of my professors while I was still in my masters program.
I met with my professor to discuss a new business venture I had been working on. I went for input and feedback. I explained how amazing my idea was. How it would revolutionize the industry I was getting into. And how it would make so much money.
My wise professor’s response to me was that everyone who has a new business idea for the first time has as much gusto and belief in their product, but that most ventures fail. He suggested to me that while my new product may turn out to be incredible, and become what I was saying it would become, there was a good chance it wouldn’t.
I was a bit offended, and with 100% conviction I foolishly responded that while other people’s products and ventures might fail or flop, mine was different. I was different. And I would succeed.
The second you think you are a different entrepreneur who will only know success, or that you have a different type of product that will only realize profit, you are entreumyopic.
Really, I was entreumyopic. There was no ‘may’ or ‘can’ or ‘could’ in what my product would do and become. Rather it was ‘IS’ and ‘WILL.’ To me, my professor’s suggestion that my product might not work was ludicrous and ignorant.
Boy was I foolish. 4 years later it turned out my professor was right. After spending so much time time, energy, and money into this business venture that never went anywhere, I realized it was a bad business idea. It took me a long time to learn.
I was too committed to my product idea. I thought it was so amazing, so I kept chasing after it.
However, I should have been committed to success, and not my product. Then I would have abandoned this venture in short order. I would have pivoted to another product idea, and reached success sooner.
Now when I look at potential business ventures, I don’t get too attached to anything. While a new business idea may have great potential, it’s just that. Potential.
Until the market responds en mass with a resounding yes, opening its wallet and giving me money for a product, I don’t get attached to any venture. And neither should you.
3. You Get Better With Practice, So Be Patient. Your Next Campaign Will Likely Be Better.
If your crowdfunding campaign fails, don’t worry. That’s perfectly fine.
The first go-round you will always learn the most, and when you come back with your next campaign, you’ll most likely do better.
Here are some pretty powerful examples, both outside and inside of crowdfunding.
Barack Obama ran for the U.S. House of Representatives in 2000 and lost 60% to 30%. Yet, he later ran for and won the U.S. Senate in 2004, and the U.S. Presidency in 2008 and 2012.
These campaigns in which they “lost” weren’t lost causes. They all learned how to better run things the next go-round.
As one last example, Ryan Grepper of Coolest Cooler launched his first Kickstarter in December 2013. He only raised $102,000 and didn’t reach his funding goal. He then relaunched in the Summer of 2014 and raised over $13 million.
It’s cliché, but it’s true: If at first you don’t succeed, try again.
There is more to Kickstarter than raising money. You’re also launching a crowdfunding campaign to validate your product idea. If it’s a home run, run with it. On the other hand, if it’s not even a first base hit, pivot to a new idea, and keep going until you hit success.