What We're Learning About Crowdfunding

[ysabetwordsmith.livejournal.com]

Crowdfunding is a relatively new business model. It's been around long enough that patterns are beginning to emerge as people experiment with different ideas and methods. Let's list some of those ...

* Free samples sell content. More often than not, people like to know what they're getting before they plunk down their hard-earned money. In a brick-and-mortar store they can just fondle whatever is on the shelves. Online shopping offers a much wider range but you can't always see what you're getting. So vendors are finding ways to substitute by offering videos, excerpts, etc. Crowdfunding involves an exchange between creator and audience, often with the viewers giving inspiration and feedback. Free samples don't just show people what they're buying, they reward participation and held hook viewers into ongoing projects. So look for bits of your work that you can afford to give away.

* Customization adds value. People love being able to get exactly what they want or need. This is actually a very old premise that used to be the norm, before mass production was invented. The economy has just shifted around to make it highly competitive again, by offering better ways to connect creators and shoppers. Often you can capitalize on this to make duplicates, because people may say, "Hey, I want what he just bought." For some types of content, that really reduces your workload.

* Find your niche. Marketing has always advised identifying and meeting unmet needs, but this really comes to the fore in crowdfunding. This business model can be small and nimble, or it can grow with demand. It thrives on connecting creators of unusual goodies to people who aren't fully satisfied with the mass-market stuff. So listen to what people are asking for, and look for places where there are gaps.

* The relationship is part of the process and the product. Traditional marketing of cultural goods has had a low level of interaction. Crowdfunding cuts out most or all of the middlemen and connects creators and fans directly. This connection makes the creative process more responsive, cycles energy back and forth, and generally means people have more fun. It's very different from the "lonely garret" model of creativity. Understand that going in, and plan to work with it.

What are some other things you are learning about crowdfunding?

Comments

[shadowsculptor.livejournal.com]

Thanks as always for the informative post! I've found all of this to be true. I find my greatest difficulty is in, first of all, drawing an audience, and second, finding a balance between selling art for too much money and too little.

Thoughts

[ysabetwordsmith.livejournal.com]

Finding an audience can be challenging. It is much easier within a networked system, such as LiveJournal, where there's a large pool of users already gathered and you just have to get their attention. For a stand-alone website it is much harder, relying on search engines that are more interested in making money than providing accurate results. This is why I feel that we need a crowdfunding hub to host different types of projects and help patrons find things they like.

Pricing requires that you know things like:
* how much your materials cost
* how long it takes you to make things
* how much you need in order to live
* what people think your work is worth
* how much spending money your fans have
Some of those you can learn precisely, others are just estimates. Sometimes it helps to compare what other people are charging.

[mrbumblepants.livejournal.com]

I like what you've got here. Based on what I've learned watching other crowdfunders, I'd say a big thing is only offer what you can actually do - and find a way to show proof. It's disappointing to put money in a pot only to have a project fall apart, so I think people are hesitant if there's no assurance.

Thank you!

[ysabetwordsmith.livejournal.com]

>> I like what you've got here. <<

Yay!

>> Based on what I've learned watching other crowdfunders, I'd say a big thing is only offer what you can actually do - and find a way to show proof. It's disappointing to put money in a pot only to have a project fall apart, so I think people are hesitant if there's no assurance. <<

I agree, reputation matters, and having previous projects boosts confidence in new ones. Most of the time I back projects on this basis, and I favor people whose work I already know and like, although I'm always watching for new opportunities.

On the other hoof, I have donated to several projects that I expected would not meet their goals or manifest a finished project. I am so fed up with the mainstream entertainment trashheap that I would rather donate $5 to longshot project with a diverse cast and fresh storyline, even if it fails, just to say "Here is my folding vote of approval for what you are doing!" than use that $5 to buy another piece-of-shit DVD where the black guy dies or the cast is all white or the chick is only there to get fridged, etc. Who knows, even if this cool project doesn't fly, maybe some of those people will be encouraged to try again. Maybe I'll make some friends. I sure as hell won't get anything backing people who hate everything I stand for and see me as prey.