Giving you news and views about crowdfunding and Crowdcube

22

12.2010

Capitalising on buzz – insights into crowdfunding a product launch

The idea was simple. Transform the iPod Nano into the world’s coolest multi-touch watch with a simple wrist strap. It seems straight forward enough, yet Scott Wilson, the founder of Chicago-based MINIMAL needed $15,000 to make it happen. Enter Kickstarter – the US crowdfunding super tanker. What happened next is nothing short of staggering. The TikTok project raised $941,558 from 13,510 backers in just a few short weeks.

TikTok - iPod Nano watch strap

TikTok - iPod Nano watch strap

Putting the large sum of money raised aside, something far more intriguing happened. Scott Wilson was able to tap into a huge opportunity and inspire genuine advocacy. He test marketed his concept on a grand scale and for minimal cost. By doing so Scott could get valuable insight and feedback into how people would react to his idea. The reaction was overwhelming and Apple themselves would have paid a fortune for such level of feedback, Scott got it all for free.

Principles of viral marketing – creating a buzz

Crowdfunding could easily also be referred to as ‘viral funding’. Part of its success relies on the self interest of backers to spread the word to other interested parties. It is self-fulfilling but only if you have a good idea to start with and are prepared to work hard to promote it.

I suspect that the marketing value from the buzz created from the project would be well in excess of the $1m that they actually raised, and that this exposure will go further towards its ultimate long term success. TikTok managed to transcend traditional marketing techniques and developed a cult following prior to official launch (presumably in 2011) through word of mouth. Many marketing departments of multinational corporations would pay through the teeth for this kind of exposure and reaction. Again Scott got it for free.

Viral marketing is notoriously difficult to achieve. By launching a product ‘under the radar’ using a crowdfunding platform such as Crowdcube, Crowdfunder or Kickstarter the inventor benefits from an existing platform that makes it effortless for people to spread the message. Essentially viruses are easy to transmit and crowdfunding website dedicate themselves to exploiting existing communication networks, particularly blogs, Facebook and Twitter, as their business model depends on this surge of communication.

For a viral message to be successful it also needs to tap into common motivations and behaviours. The desire to be one of the first to own something cool is critical. Remember, TikToc only needed $15k to make their product a reality; it hit this target soon after publishing the project on Kickstarter so it is reasonable to assume that the TikToc would have hit the shelves sometime in 2011. However, this wasn’t enough for the majority of the 13,510 backers; they wanted to be the one of the first to get this ‘must-have’ product by pledging money to the project. And let’s not forget the kudos and bragging rights from helping to product go to market in the first place.

Proof of concept

Aside from the awareness generated we shouldn’t neglect the SEO benefits from having dozens of blog, news and forum articles linking to your company website, the future PR value for updates and continued word of mouth from their 13k brand advocates. Probably most significant of all it will make those discussions with retailers, distributors and wholesalers a lot easiers – they now of ‘proof of concept’.

It’s impossible to avoid the huge merits of tapping into a crowd for a small company with nothing to lose. Once the touch-paper has been lit the results can be truly astonishing and surpassed everyone’s expectations.

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