3 reasons to crowdfund a robot
Kickstarter’s recent decision making it very difficult for hardware projects to use the platform just highlights two very useful things to know about crowdfunding. Firstly, not all crowdfunding platforms are equal. And secondly, the decision to disallow renderings and multiple product rewards only affects the lazy kickstarter projects that probably weren’t going to be successful anyway. Lazy crowdfunding projects make two big mistakes; like hoping that the platform will do all the marketing; or using the project as a learning curve in design, manufacturing and delivery.
First of all, there are dozens of crowdfunding platforms these days (Kickstarter, IndieGoGo, When You Wish, FundaGeek, Invest.in, Launcht, Catarse, WeFund, Pozible, Quirky, 33seeds, RocketHub, peerbacker, etc.). Each favours a certain community or marketing approach and some have an approval process. But when push comes to shove, it’s about how much equity you give up, what charges you pay, how long does it take to get your money, and whether or not you can accept donations or have an any funds model.
There are 3 good reasons to turn to crowdfunding for your robot and they describe 3 completely different sorts of projects. Which sort of project you are will determine what sort of crowdfunding platform you choose.
1. You have a big mail list already and can use crowdfunding as a preorder shopfront and also a way of building your community… the community that you already have! This works really well for many musicians, video game and comic book artists, some of whom have raised pretty big funds. This will work for robot or hardware projects when you have a track record of product delivery, are some kind of superstar, or maybe moonlight for a magazine or media company. You can probably ask for $50,000+.
2. You are testing your market strategy, or maybe your marketers. You might need to do several different campaigns. You might need to get some of your funding elsewhere. You definitely don’t want to underprice and overpromise, so try to find your product market fit while also nailing down design specs and your market channel’s price point. You can probably ask for $5,000 – $20,000. Yes, you might need to put your molds on your maxxed out credit cards, but you are much more likely to attract angel backing if you can demonstrate customer interest.
3. You have a dream. This is the heart of crowdfunding. Use it! Sell us on your dream and send us nothing but stickers and t-shirts. Send us updates and a chance to join your community of dreamers. You can probably raise up to $10,000 to fund your prototype. This is a creative project. Use rewards that are an experience, a souvenir, a chance to share the excitement. It’s also a great way to get some customer validation before going any further. If you can’t find people to fund your prototype dreams, maybe your product idea needs more work.
This last approach to crowdfunding robots is underutilized but has been successfully used by many projects which then moved from prototyping into presales. Rumor even has it that Lit Motors crowdfunded their crash tests! This kind of crowdfunding is customer development and very lean startup in methodology. It’s not the same as the Jobs Act style crowdfunding which could lead to later trouble getting VC or angel investment (as reported in PandoDaily).