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Aug 11, 2015 5:47 EDT

Crowdfunding trends for tech products

iCrowdNewswire - Aug 11, 2015

As the public got used to the crowdfunding concept, portals like Indiegogo and Kickstarter have become giants in the market, raising billions of dollars for entrepreneurs all around the world while amassing huge audiences.

As a consequence, the market is consolidating. The drawback is that competition increased, making it harder to be featured in the press, social media and in the platforms themselves. But a net positive is that when a project reaches a critical mass it becomes easier to sell a product or service.

That led to some raising trends in the industry, particularly in high tech products. While earlier crowdfunding campaigns appealed to some altruistic feeling and gained the media along with it, we’re now seeing a rising trend of product focused campaigns, sort of pre sales, that offer no other perks than the product itself.

That trend became evident when Coolest Cooler became successful, raising more than $12 million. That campaign still followed traditional perks model, with thank you messages and some very expensive extras. But take a look at what happened:

· $5 thank you messages raised more than $5,000. More than 10% of the goal. Not bad.

· 444 people bought cups, T-shirts and other perks, raising a little bit more than $15,000 or 30% of the goal. Not bad too, 40% of the goal only in perks.

· $31,500 were raised in expensive perks. $15,500 for Skype talks with the founder to discuss a project and $16,000 from 8 people who decided to give $2,000 to have the founder to man a party at their backyard.

So, Ryan Grepper managed to raise his entire goal only in extra perks, without needing to deliver the product. But the project raised $13,285,226, which means that extra perks represent less than 0.4% of the amount raised. The rest was only some variation of the product itself.

Now consider the costs to deliver that 0.4%. The founder must go after a shirt provider, a cup provider, has to spend time serving people at parties and so on. Even if we consider that some of those perks would actually have to be made to serve as gifts in other product variations, fact is that they are distractions that add little to the project.

That’s why we’re seeing a rising trend of projects like Pebble Watch, claiming directly that they just built a watch, they are not trying to do anything about climate change. All of the perks are some variation of the product. Straight to the point.

What those two projects tell us is: if you have a great product, you don’t have to appeal to all types of public when crowdfunding. Just focus on what you do best.

Via iCrowdNewswire
Tags: , Blog
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