According to United Nation’s, today one third of the world’s population has internet access and 85% have access to cellular phone. With the decreasing costs, innovative broadband solutions are becoming increasingly common among the masses. Also, the smart phone penetration is increasing with the growing demand for internet access.
Over the past few years, there has been a massive rise in the connectivity which has spurred up the competition among the entrepreneurs. The talented entrepreneurs are using the innovative technology to produce goods and services that efficiently respond to customer’s needs. Such ventures are creating job opportunities for the masses and are driving economic and social stability.
But chasing the technical advancement and creating innovative products to compete in the financial markets often suffers due to lack of capital for entrepreneurs. In order to fill the gap, entrepreneurs around the world are now benefitting from the open possibilities of “Crowdfunding”.
What is Crowdfunding:
Crowdfunding is basically a rather different approach as compared to mainstream business approach; it is a method of raising funds with the help of friends, family, customers, and individual investors. Entrepreneurs utilize social media platforms and the web to offer ownership of a shared vision or even equity stakes to prospective investors.
Crowdfunding is a Myth:
To begin with, I do not have any thing personal against Crowdfunding.
Although the basic idea for Crowdfunding is to boost innovation, help creative and talented entrepreneurs to turn their imagination into a reality. But it is a risky in a sense that you hand out money to people with nothing but a promise in return, if you are lucky it pays off and you get an Oculus Rift. At times when your luck isn’t by your side, you end up as failure.
Successful Failures: Cautionary tales for Tech Entrepreneurs
Crowdfunding that is often used to finance business ventures has been listed as a threat to unwary investors. With limited restrictions, this facility is available easily to a wider number of investors. Some of the tech crowdfunding campaigns failed to turn their imagination into a reality. These three campaigns were started with a very strong and attractive purpose but failed to achieve success
Ouya Android gaming console:
This expensive device and media center for people who do not require a gaming PC or a flagship gaming console. This device for developed with latest available hardware but by the time it was ready, the technique got outdated. It did not receive much demand.
Ubuntu Edge smartphone:
For Linux lovers this was supposed to be a smartphone-desktop hybrid device. The timings for this device didn’t go in its favor because the prices had dropped and the smartphone evolution slowed down.
Kreyos Meteor smart watches:
It was created with the aim to bring advanced gesture and voice controls to smart watches. When this device came into the market, it had much software and hardware malfunctions that it couldn’t survive.
Why Crowdfunding campaign fail?
Most of the crowdfunding campaigns fail because of the mistakes the entrepreneurs make. A lot of time and effort gets wasted because the true purpose of crowdfunding is completely forgotten. This is because
The actual purpose of crowdfunding is to help the small startups to get started.
Raising funds is not just the only reason for crowdfunding.
Most of the Kickstarter campaigns are unable to attain complete funds to start as they are unable to collect enough money. Out of the submitted campaigns, one fifth gets totally rejected and the others which are left never fulfill their promises.
“Market” is the toughest place to get tested, and most of the campaigns fail to survive when it comes to this level.
Crowdfunding is not any magical cash machine, it’s not easy to just accumulate funds and get started with a campaign. Some of the projects do not even see the light of the day and get rejected. The investors do not get impressed by ideas; they take notice of one’s actions when he/she start fulfilling the promises. The audience for crowdfunding is not easily impressed to invest for your project especially when your campaign comes across as half-baked.
As writer and Entrepreneur, Seth Godin, said
“People don’t want to back a campaign that’s not going to work”.
People will not support your project only if you share your enthusiasm and ensure the investors that they will receive a return on their investment. Crowdfunding investors will always look for your actions, efforts, dedication, and hard work. Be sure, crowdfunding is an interactive process. It starts long before the doors for possibilities are opened and long after the campaign has closed.