1. ‘Rewards crowdfunding is only useful when you’ve got a product that has high margins because you have to go quite big on discounts – don’t do it on low-margin items, apps or platforms.’
2. ‘Don’t be so early that you don’t know your cost of production. You also need some kind of working prototype, otherwise the media won’t talk about it.’
3. ‘Don’t assume the platform will promote and market you – you have to shoot a pitch video, do PR and probably lots of pay-per-click advertising. This all adds up.’
4. ‘After manufacturing costs, discounts and the cost of the campaign, it’s common that people end up losing money. Then they can’t fulfil rewards, and damage their reputation before they’ve even started.’
5. ‘Have a great pitch video. Work with agencies that have done this before. You need to show and tell every single aspect of your process – build reassurance with the end user that they’re going to get the products.’
6. ‘Build community before you even start, or find other campaigners with a similar target market but different products that have got big communities. Some of them are even dedicated to crowdfunding – make sure you hook up with them.’
This article was first published in How to Start a Business 2021. To become a subscriber or purchase our newest guide, head to our webshop.