Crowdsourcing

Kickstarter Meetup at 3RDSPACE: "The video is key."

Go Lean, Kick Start

When launching a startup, go lean. Brant Cooper describes this technique in his New York Times bestseller, The Lean Entrepreneur.

When launching a product, crowdsource. Most businesses design, build, and market a product hoping it'll sell. Crowdsourcing, on the other hand, cuts the risk. Crowdsourcing entrepreneurs build a prototype first. Then they sell it before mass producing it. The lean startup method is the opposite of what happened in the Dot-com era. In the late 1990s, VCs funded many businesses based solely on an unvalidated idea.

3RDSPACE Kickstarter Meetup

I co-organize a monthly Kickstarter Meetup at the 3RDSPACE coworking location in University Heights. I've seen people launch projects that fell short of their fundraising goals. I've also seen teams make their goal and then discover they severely underestimated their costs. Crowdsourcing isn't an alternative to entrepreneurism. Crowdsourcing is entrepreneurism, done smartly, with all its risks and rewards.

Biggest Kickstarter Ever

Coolest Cooler's clear rewards.

The biggest fundraiser on Kickstarter is Coolest Cooler. It ended four days ago after raising $13,285,226. I've learned some important techniques while participating in our Kickstarter Meetup. The key to launching a successful crowdsourcing campaign is the video. Don't be cheap and don't put the word Kickstarter throughout the video. If Kickstarter doesn't accept your fundraising campaign you can try another crowdsourcing platform. Also, don't make the rewards confusing. If you're making software, don't give t-shirts as rewards. You're in the software business, not the t-shirt business.

The two leaders in crowdsourcing are Kickstarter and Indiegogo. Since these are new businesses, they're still working out their rules. The key difference between these two companies is that Kickstarter is an all-or-nothing campaign. If you don't hit your fundraising goal then you don't get any of the funds, but with Indiegogo, you do. So, be careful about your reward choices. If you decide to raise $15,000 on Indiegogo but only get $1,500 in pledges can you still deliver your rewards, profitably?

Crowdsourcing isn't the be-all and end-all of startups. Its key benefits keep entrepreneurs focused while validating their ideas. A good story and clear message will go a long way to bring a product to market while minimizing risk and out-of-pocket costs.