Your down to earth business adviser.


Crowd Funding Campaigns – The Truth

Crowd Funding Campaigns – The Truth

Good morning ladies and gentlemen. Craig here, from Real Business I hope you’re doing well and keeping out of trouble.


Today, I want to talk about Crowd funding, Crowd Funding looks great, design a unique product or service, and get the marketplace to get behind it and bring in a ton of cash before you get to the production stage. Sounds simple right? Think again. The kick starters and Indiegogo’s of the world are nothing more than a platform for making video editing companies a lot of money, while leaving the majority of creators, dismayed and out of pocket.


Let’s look at why crowd funding is a waste of time for most companies.


  • Crowd Funding platforms do not bring random people looking to buy, unlike Ebay/Etsy were browsers can be turned into potential customers. Email any crowd funding company and they will tell you, people rarely come to the sites to buy items indirectly.
  • Crowd funding companies expect you to do all the work on marketing, via social media, blogs, vlogs, and getting news article writers to get your item out to a wide audience.
  • They push you to spend large chunks of capital, before you launch a campaign. This includes Videos, professional photography, and content.
  • They promote some projects over others. No one’s going to find your project on page 50. Crowd funding campaigns push projects to the front based on the projects they think will make them the most commission. Leaving the other 99% of projects who could have made $$, sadly unfound.
  • They don’t want to talk with you, no phone numbers, limited to no support and any advice by email, will be, read the advice on the website to chase your own sales.
  • You will be spammed daily by marketing companies all trying to get more money from you to promote your ‘campaign’. 3rd party marketing companies understand only too well that 99% of listed projects don’t get any funding from anyone apart from the projects family and close friends giving them a charity hand out. So these marketing companies offer promises of bringing customers to your campaign, without any results what so ever.
  • Between 5-10% of your product sales are given over in success fees, even though these sites do none of the hard slog of getting the sales.
  • Making a fancy video of a prototype, and hoping it all works is a recipe for brand destruction. You have no control over what is posted on crowd funding sites, and years later upset early backers can leave a bad taste on your search engine results, even if you did manage to work out all the earlier problems.
  • Crowd funding is developing a bad taste as platforms for individuals and small companies to ‘beg’ for support, rather than earlier times when these sites were really offering unique products which did have large setup costs and need a ‘crowd’ to get them to life.
  • Many people get excited when they see a campaign reach $20,000-$30,000. But if your only making 20% margin ($4000-$6000) you costs of doing a video, marketing, website and prototype costs will mean, unless you have ridiculously large margins, you’re going to need to raise big big dollars before your actually attaining real profit.


So to sum up crowd funding, it’s not good. You are investing large amounts of funds into a dream you hope works, through a platform that doesn’t add value or care about your success and to be honest, if you have already made it to a prototype stage, chances are you don’t need to bring in large sums for tooling or other setup costs.


So, if crowd funding is not the option to bringing your product or service to the masses, what is? Good question.


So, if you have $10,000 to spend on marketing a business which you would otherwise spending on crowd funding campaigns, what are some good areas to bring in sales?


  • Get a decent website, and write good quality content daily, until your fingers drop off.
  • Youtube videos, every week try and make a youtube video detailing your product/service.
  • Target forums for your potential customer base.
  • Good old fashioned flyers/mail drops – if your product is locally required.
  • Ebay/Amazon and Etsy are not as great as they used to be, but still are a source of potential custom.
  • Find current retailers of your type of product and get your foot in the door.
  • Partner up with people/companies who have a base in a foreign country and speak the local language. If you’re selling USA made chopsticks, chances are someone in china searching for them through baidu will never find you.
  • Give your product away to good causes, the word of mouth from these actions spread far and wide.
  • Get down to trade shows if there cost of entry is low, people seeing an item in person will lead to great word of mouth marketing.


In future articles I’ll be going into the above in more detail, but until next time.


Take care, and keep out of trouble.



    LEAVE A Comment