Twelve years ago, product development was simple. You would dream up a product to bring to the world, work super hard to develop and launch the product - and if it was great, people would buy it, enjoy it and share it. Brilliant!
Although this sounds like a straight-forward process, you were also incredibly exposed. More often than not, you would be sending out a product that you weren’t completely certain would resonate with the public.
This was after you had poured thousands (sometimes millions) into private development and production. It’s a big personal commitment without knowing more about your customers, how many there are, and what they’d love to see.
Then everything changed following the launch of global crowdfunding pages like Kickstarter and Indiegogo. You could suddenly connect with your audience directly, learn from them and then adapt - all without an immense financial investment.
Having launched products through Kickstarter and Indiegogo, and backed many - I've seen firsthand the numerous benefits that these crowdfunding platforms offer, so I wanted to share a few of them below, as well as outline my personal experience.
The benefits of crowdfunding:
As soon as your crowdfunding page goes live, potential backers can start sharing their opinions and feedback on everything - from product details and price, to shipping and delivery. This is a valuable source of information for product development, but without the costly investment of research.
By receiving feedback from your backers, you’re also starting an important dialogue. As you listen to what they have to say, take on their advice, and make changes accordingly, you’re actively involving your audience, which sparks a sense of co-creation and ownership.
When you feel like you own something, or have contributed to its development in some way, you’re going to take a vested interest in its success. That’s what crowdfunding pages do - they transform your customers into your co-creators. In turn, they will become your most vocal supporters as they’ll want the product to succeed as much as you.
By building such a close relationship with your backers, you feel an immense sense of responsibility to deliver an exceptional product in the timeframe that you have promised. Although this may scare some companies, I believe this responsibility is a driver of success.
Trust is a major concern for people who back crowdfunding campaigns, but the fact that these platforms call for transparency (e.g. you must publish an expected delivery date when you launch your Kickstarter page), encourages organisations to deliver on what they promised. If you don’t, you’ve failed your customers in a very public way.
So yes, launching a product through Kickstarter can put the pressure on to deliver, but when you do, this transparency and trust will encourage a positive long-term relationship with your backers.
Reduced financial risk
Designing and manufacturing any product is incredibly expensive. As I previously mentioned, you can spend thousands, even millions, on private development - so you are always looking for ways to minimise cost and risk.
With most crowdfunding websites being free to set-up, you can get critical product feedback, conduct market research, as well as convert customers into co-creators, all without spending a cent. This is incredibly valuable!
You now have this amazing group of people backing and supporting your idea, and you are also able to use the funds raised to refine your product – eventually launching something that was even better than the one initially promised. Everyone wins! That’s why I chose to use Kickstarter when launching my own product: LIFX – smart lighting.
My experience with Kickstarter - LIFX
Back in 2012, before a smart home had become mainstream, I co-founded LIFX to launch the first ever multicoloured LED Wi-Fi light. We now have over 12 products in over 80 countries, and have partnered with Google, Amazon and Nest. And where did we get our start? – Kickstarter.
Over the campaign, we had 9,236 backers pledge $1,314,542 to help bring this product to life. We were able to use the funds to make further developments to our product, but more importantly, we were able to use the incredible amount of feedback we received to make sure that those developments were targeted, and would help meet the needs and wants of our consumers.
So when we finally launched our LIFX bulbs into the world, not only were we able to do so with minimal financial strain, we were able to do so with the confidence that the public would embrace the product.
This sense of co-creation has benefitted LIFX over the past few years, and I would greatly attribute our continued success to our start on Kickstarter and the backers who have continued to be vocal supporters.
Would I use crowdfunding again?
The short answer to this question is – YES, absolutely! We were so impressed with the success of the Kickstarter. The amount of feedback and support that we were able to gather during that time, set us up for the last seven years of growth and success.
I truly believe in the benefits of crowdfunding platforms, for both producers and consumers, so much so I’ll be using Kickstarter and Indiegogo for my next venture – Raine Scooters. We'll be launching our first electric scooter through Kickstarter on November 1, 2019. Feel free to follow us along for the ride!