Crowdfunding Invention Help Pros and Cons

Over the past few years, crowdfunding invention through sites like Kickstarter and Indiegogo has become a popular strategy for new small business owners or inventors. These platforms give their products a sizable stage for mass promotion so they can collect enough funds to realize their product vision.

Preparing for your product launch can be equally exciting and stressful. As an inventor, you have to simultaneously consider and oversee a lot of moving parts in order to ensure the successful debut of your new product in the market.

Financing, in particular, is one of the most important parts of planning, building, and establishing a new business since it will serve as the foundation for expanding your business through marketing initiatives, product iteration, and more!

To help our readers understand the crowdfunding process and any inventors in need of crowdfunding invention help, we’ve listed the major pros and cons of crowdfunding so you can make an informed decision on whether or not crowdfunding is the best strategy for funding your product venture.

The Pros of Crowdfunding Invention

Equity

Ownership and rights to your product and emerging small business are important, especially if you are an entrepreneur. When looking for ways to fund the development of a new product or small business, a lot of entrepreneurs explore the option of giving up equity and ownership to investors.

Equity refers to the value of ownership or interest in a business, such as shares of stocks. One of the biggest advantages of having crowdfunding provide invention help versus other forms of funding is that your funders don’t take a piece of equity from your business the same way investors do. This means you still own the rights to your idea, product, and business while raising the requisite funds to bring everything to life.

Testing Your Market

One of the most rewarding benefits of getting invention help through crowdfunding is getting the chance to see how well your product will likely perform once it enters the market. The market is a tricky place to get an enduring grasp of. Most businesses try to calculate what products are most likely to be successful and when by evaluating trends, but it can be difficult due to their rapidly fluctuating nature.

Crowdfunding allows you to introduce your product to a group of potential consumers who could be interested in your product, which enables you to garner how much interest there is. You can base how likely they are to purchase your product on how much funding and support comes through.

The speed, interest, and traffic generated by your product are all good indicators that can help predict how well your product is likely to perform once it actually debuts. This will also give you a better idea of who your target audience should be, what their needs are, and which marketing approaches they respond the best to.

Builds an Audience

Another great aspect of crowdfunding, especially online crowdfunding sites that provide opportunities for engagement with your supporters, is that you get the chance to build awareness and a devoted community by effectively marketing your product idea.

There are many people who browse crowdfunding sites excited to see what new products and innovations can be brought to this world, and crowdfunding allows you to build an audience before the official debut of your product.

Fostering a strong community of supporters prior to your official launch is a great way to build a loyal clientele who are genuinely interested in your product and seeing it succeed, which will guarantee you stability when you enter the market.

Check out Episode 217 of The Product Startup Podcast to see how serial entrepreneur Yuri Dvoinos built a community around his product and secured $750,000 in funding through crowdfunding sites!

Cons of Crowdfunding Invention

False Positives

Although funding your product venture through crowdfunding can be incredibly effective, a lot of people don’t complete the required preparation for their crowdfunding campaign when looking for invention help. It’s important that you figure out a strategic way to reach your audiences, especially in such a competitive market.

A common mishap that new small business owners encounter when launching crowdfunding campaigns is receiving ‘false positive’ feedback. This means that although they may have a genius product idea and strong business branding, they may receive negative or no responses at all because of improper preparation and lack of marketing of your idea.

When this happens, it can be incredibly discouraging since it can engender the belief that your product or idea is not “good enough” or desirable to your audience or market. The truth is, your product needs to be properly and stubbornly placed before the eyes of your audience in order for them to be able to become invested or take an interest in it.

Without the right efforts expended in marketing, advertising and content creation to help promote your product, your crowdfund might fail before it gets a chance to succeed.

A Lot of Effort and Work

Crowdfunding isn’t as simple as just posting a few pictures and a quick description of your product idea or business and sitting back to watch the funds come in. It entails conducting extensive research, preparing compelling content, collecting information on your target audience, promoting your campaign on your social media and website channels, spearheading marketing initiatives, and overall keeping up with interactions and traffic to your crowdfund.

A lot of successful and passionate innovators take months or years to prepare for their crowdfunding launch to ensure they receive substantial invention help. They develop high-quality images, graphics, and videos of their product or business and come up with smart, strategic ways to gain their target audience’s interest and drive the visibility of their campaign.

Taking the time to observe and learn from the feedback that your audience provides you with is also critical and can take a lot of time. You not only need to apply the feedback given but also interact, respond, and update your supporters on any improvements being made or delays.

Competition/Visibility

One of the biggest challenges with gaining invention help through crowdfunding is the oversaturation of new ideas and products. This is because it is an incredibly popular choice for innovators and new small business owners to try to promote and fund their projects.

With so much competition, it can seem intimidating and difficult to try to compete against what is already out there, especially against campaigns that are already gaining a lot of backers, funding, and support.

Another challenge is trying to promote your idea or product amongst others if your idea is somewhat similar or is in direct competition with another product within the same target market as you.

In this case, a lot of marketing, research, interaction, and effort must be put into grasping and holding onto the audience’s attention to ensure your product or small business campaign stands out.

Check out our blog for more tips on how to use Kickstarter for your crowdfunding campaign!

If you have a great new invention and you’d like to learn more about this product development process, get in touch with TriMech today, and we can set you up on a call with our product strategist!