We’ve been working with Crowdfunder to further support the participants of the Design Council Spark product innovation fund and accelerator. Here Jess Ratty, Brand Communications Manager at Crowdfunder, discusses how you can use crowdfunding platforms to bring your product to market.
Crowdfunding is disrupting the standard business model by changing how designers and entrepreneurs bring their products to the customer. It has become the ultimate crowd-tester, opening doors for creatives and product designers across the UK.
Traditionally, people with great ideas needed funds to get products to market. They spent time and money on market research, working out how to build a customer base and minimise the risk of offering up an idea without knowing if it was something people really wanted. Creating a business is hard, it’s a tough world and consumers don’t want what they don’t like.
Now crowdfunding has made life easier for product designers and developers, becoming the go-to platform to test new designs, raise funds for a product, build audiences and find new customers as well as gain social media traction, PR and marketing kudos.
So how does crowdfunding work for new products?
What the crowd wants, the crowd gets
Businesses have to start from somewhere. With banks needing proof of concept as well as forecasted sales often too, how do you know a product will be commercially viable without first taking it to the streets in a lengthy product-testing pitch? Savvy businesses are embracing new technology by launching crowdfunding campaigns to test their markets. If you’ve got a product and you want to do your market research, where better to start than with your crowd?
Being able to pre-sell your product gives you ample opportunity to show future investors, lenders and banks that you’ve got a product people are hungry for. Nick Hounslow (aka ‘The Wave Maker’) gathered a team of people to crowdfund the UK’s first ever inland surfing lake. With just planning permission to his name, Nick and his team went on to pre-sell wave sessions, clothing and membership to the lake, raising over a staggering £219,000 from more than 900 supporters.
Increased product awareness
Crowdfunding is not just about fundraising...pledgers publicly endorse a brand.Jess Ratty, Brand Communications Manager, Crowdfunder
Crowdfunding is not just about fundraising. By launching a campaign and reaching out to interested networks, crowdfunders gain a loyal supporter base and customers who believe in them as well as their products. Pledgers publicly endorse a brand, raising grassroots awareness of it through their online communities.
Snact, a fruit jerky business with a hard-hitting environmental ethos, used their crowdfund to leverage talks with eco-loving River Cottage, building their product awareness even further. Crowdfunding is amplifying brand awareness, turning traditional marketing on its head and giving new brands a platform to gain instant feedback and product validation.
A market of new customers
Businesses can spend years, not to mention money, building a database. In contrast, successful crowdfunding campaigns quickly and inexpensively build a supportive community of customers who actively engage with a product.
For example, UBREW, a craft brewing company based in the heart of London, wanted to create a place where community members could drink the beer they brew. With the premises secured, the team needed to buy equipment, so they crowdfunded £12k to make it a reality. Not only that - they went on to raise another round of funding through Crowdcube, selling shares in the business to further expand their growing market. By running a rewards-based crowdfund, they were able to show that their products were worth investing in.
Crowdfunding offers a great playground for new ideas.Jess Ratty, Brand Communications Manager, Crowdfunder
The world of product design is changing. Crowdfunding reduces the risk for designers in the market today, providing a home for much-needed product testing, validation and fundraising in a tough financial climate. In short, crowdfunding offers a great playground for new ideas.