Are you an Australian thinking of launching a new product, project or expanding a business?
Australia and the rest of world has been abuzz lately with the spectacular crowdfunding campaign of two backyard beekeepers from New South Wales. So far, they’ve raised more than $8.5 Million, exceeding their goal of $70,000 in just two minutes of launching their campaign.
Father and son Stuart and Cedar Anderson are honey hobbyists from Northern Rivers who are crowdfunding their innovative beehive, the ‘Flow Hive’, which revolutionises the way beekeepers collect honey. Not only is the wild success of their crowdfunding campaign noteworthy, but also the fact that the hives they have ‘sold’ to pledgers, as a selection of rewards, haven’t actually been manufactured yet. The Andersons plan on starting production and shipment of the beehives in the next few months, with pledgers happy to wait during the process.
The Andersons chose to launch their business with an ‘all or nothing’ rewards-based crowdfunding campaign. By going this route to get their products sold, the Andersons were able to avoid going to traditional lenders and are at no risk if the funds aren’t raised. If the campaign didn’t reach its initial target; the pledges would have simply been cancelled. Hardly an issue in their case!
This model of crowdfunding is a star example of how Australians can raise capital for specific projects, products, games, or franchises. With a number of crowdfunding sites in Australia to choose from, like ReadyFundGo’s platform for businesses, crowdfunding has given a number of entrepreneurs the chance to fund a project or business that might have otherwise languished.
The Rewards are Sweet:
Rewards-based crowdfunding allows you to:
- Raise funding without any interest rates, such as those associated with traditional loans.
- Launch a new product or business while maintaining full ownership.
- Maintain creative control with no money string attached.
- Produce based on actual demand, direct to consumer.
- Test the true consumer market to see if a product is worth its weight in hype.
- Gain invaluable feedback and marketing insights from your community of pledgers
- Create new networks and interest in your business or project.
- Reduce your risk. If it’s not funded you have little to lose. It’s better to find out that there’s no interest in a product or that you haven’t identified the right market before you spend your life savings to produce it.
Many benefits to starting a rewards-based crowdfunding campaign are actually still gained whether the campaign is actually successful or not. If you are truly engaged with the process, the feedback and insights will guide you with your future business decisions.
Already in Business? Tap Into Your Customer Base
Existing businesses can also tap into rewards-based crowdfunding to take their business to the next level. We’ve seen many established businesses using crowdfunding to launch new products, paid for by a built-in customer base before they hit the production line. Established businesses have the advantage of an existing customer base, brand presence, and experience with the realities of marketing, advertising, copywriting, and other related services.
If you own an established traditional retail store in Australia, for example, you might choose to crowdfunding the creation of a new online storefront. By targeting your existing customer base, and offering products as rewards in a creative way, you are able to tap into a source of funding that is already within your reach. It then creates a unique target audience that can give you the input to create new features and improve the product or online experience. In this sense, its not just crowdfunding, it’s a crowd-involved project!
So What’s In It For Them, the CROWD?
It may sound counter intuitive, but while your goal in crowdfunding is to raise funding for yourself, the more you can focus on what is in it for your backers the more likely you are to create a set of rewards that helps you raise the dollars you’re looking for. Having a great idea or product without an an appealing rewards structure is a fundamental that simply can’t be missed.
Don’t Forget the Fundamentals
The Anderson’s years of efforts in developing their ‘Flow Hive’ beehive is impressive. But innovation alone was probably not enough for their campaign’s massive success. Attention to developing and designing a campaign page, rewards structure, video, networking, marketing and promotion all acted together to give a solid foundation for the campaign to launch from. Tick all the boxes, one-by-one!
The BIG BUZZ
By the end of 2014, crowdfunding was estimated to add at least 270,000 jobs and inject more than $65 billion into the global economy, according to estimates from Fundable, with the vast majority of this activity in North America and Europe. That’s no small potatoes! Australia has starting to realise the economic benefits of crowdfunding on a whole, with equity crowdfunding in the pipeline.
The ‘Flow Hive’ is unique in the enormity of its global success to date…and counting… but it’s also a clear demonstration of why crowdfunding today in Australia is a total game changer for those looking to launch new businesses, games, projects, products, or franchises.