noun: crowdfunding; noun: crowd-funding
the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.
This post will focus on electronic based hardware crowdfunding projects.
CAMPAIGN OR REAL-PAIN
The best way to manage your expectations is to understand how the process works. I don’t claim to be an expert in this topic, but here are a few things that I picked up while following many crowdfunding campaigns and supporting a few. If I had known some of the tactics that campaigns use, I could have made better choices on choosing the campaigns to support. This is not a knock against all campaigns because some of them set realistic expectations and make it easy to get behind them. Here are a few things to know about the different stages of a crowdfunding campaign before you click that link your friend posted on Facebook, Pinterest, Instagram or Twitter and support a campaign.
The best way to manage your expectations is to understand how the process works.
We’ve supported a few crowdfunding campaigns recently and the most exciting period is when the actual funding campaigns are active and raising cash. First, the major tech sites get hit with the press release from the PR firm hired to get the word out to outlets that can promote the product. Once the articles from the top sites are published, the PR teams go after the early adopters and early influencers. The grab happens when they suck you in with a flashy promotional video and product renders that seem too good to be true and they usually are. The founders are usually available to answer any question that you might have. The company is active on social networking and provides frequent updates on the status of the project and even sets stretch goals to allow the project to get even better. The big push is to SHARE, SHARE, SHARE the campaign with your social networks. This is the honeymoon phase.
There are a few things that you will have to take note of during this initial phase of a crowdsourcing campaign to set your expectations:
ESTIMATED DELIVERY DATE – The first thing to note is the ‘estimated delivery date‘. The key word is estimated. It is going to be extremely difficult to deliver a hardware device if the delivery date is less than 11 or 12 months from the end of the campaign. It might even be difficult to delivery a product after 12 to 15 months. This is where campaigns might have to post best case scenario dates or maybe just have some wishful thinking. I doubt most campaigns that post honest delivery dates will see a great deal of success when they state that you won’t receive your product for over a year. Technology changes so quickly that we can’t afford to pay now for a product that won’t arrive for a year or longer. If a campaign promises to get a hardware product to you in two or three months, you should assume that either they are over-estimating themselves or just not being truthful.
The first thing to note is the ‘estimated delivery date’. The key word is estimated.
FEATURES – Campaigns will list great features that are not available in other devices on the market. You should view these as sort a ‘wish list’ and not a promise. Campaigns will often over-promise and under-deliver. If a campaign does deliver all of the features promised, you can expect them to roll out as updates months after the initial product release. You most likely won’t get all the features shown in the product promo video.
IMMEDIATELY AFTER CAMPAIGN ENDS
This is usually when the founders thank supporters and set expectations for a wild ride ahead. Availability to pre-order devices via a website is likely announced at this stage. Sometimes they will even announce that post-campaign updates will be no longer be announced via their crowdfunding pages and will move to their website or Facebook pages. It is never a good thing when updates are not posted to the place where you funded the item. This is done to make the update process easier for both campaign supporters and pre-oderers. When the campaign is over the founders will usually hand over social media to the community manager. Sometimes the campaign is handed off much earlier and is often always run by a community manager. This is a good thing for the product because it lets the the founders focus on creating a great product. It isn’t as good for the supporters because the community managers often don’t have answers to specific tech questions that you may have and it may take awhile to get an answer to your question. You can expect to see much less frequent updates at this stage.
It is never a good thing when updates are not posted to the place where you funded the item.
A FEW MONTHS TO SEVERAL MONTHS AFTER THE CAMPAIGN STAGE
You can expect even fewer updates and an inkling of what potential problems in productions might be going on. This stage is where the project announces that they are evaluating domestic or foreign production of devices. The more success a campaign has(the more money raised and the more orders received) the more likely production will move overseas to China or another country where production costs are less. The process of finding an overseas manufacturer can take months and you can consider this when determining if the project is still on schedule. At this point the founders will usually state that the project is still on schedule. If the estimated delivery date is less than 6 to 8 months out, it is going to be difficult to still be on schedule at this point. The normal process is to select several manufacturer finalists and have them produce a prototype devices and then the team goes with the team they feel will produce the best final product. Once they select the manufacturer they are going to team up with, they still have several months to go before they can produce an actual product in mass quantities. They need to produce molds/tools and test them multiple times and make adjustments before they can move on to full scale production. This process is likely to take several months. The process can take longer if many custom parts are used that have to be ordered from different suppliers. I’ve never produced a hardware product, so I may have these stages ordered incorrectly.
A MONTH BEFORE EXPECTED DELIVERY DATE STAGE
This is usually the stage where the campaign tells supporters that they are behind schedule and states all of the reasons listed in the stage above. This is about the same time that supporter sentiment splits in two. You have the die hard supporters and the supporter who feel that the campaign was not honest or realistic about the timetable. The die hard supporters will state that this is a crowdfunding campaign and that supporters should know that delays are common. They usually stress that this isn’t a pre-order and that you are supporting a campaign and paying for a product. The other group of supporters are angry because they feel that the campaign had been dishonest with the expected delivery dates and set unrealistic expectations.
You have the die-hard supporters and the supporter who feel that the campaign was not honest or realistic about the timetable.
POST EXPECTED DELIVERY DATE STAGE
This is the stage where the campaign updates the supporters on the campaign status. This usually entails news that the campaign was hit with further unexpected delays. This is when some of the die-hard supports move to the other group of unhappy customers. You can expect this stage to reboot every few months when the release/delivery date is promised to be a month or two away. The die-hards will stick with the team and even promote the campaign or pre-order, but the public sentiment of the unhappy supporters will take on a new level of activity. Unhappy customers are more likely to take time to write something negative than happy customers are to write something positive. You will often see comments requesting refunds on the crowdfunding page at this point. Please note that the campaign is under no obligation to provide a refund, but often they will if you ask nicely and state why you want a refund. It doesn’t help to make threats of law suits and such because they are pretty much covered by the agreement you click on when you register on the crowdfunding websites. This final stage is often repeated multiple times until the device is released.
WHAT YOU MAY NOT KNOW ABOUT CROWDFUNDING
The expectation is that when you support a crowdfunding campaign is that your support is what is making it possible for the device to be produced. In most cases, that is just a myth. Most of these devices could never see the light of day if the only funds they received were the ones generated from a crowdfunding campaign. A majority of these campaigns already have at least some alternative funding in place. They usually have several private backers who have taken equity shares in the company to pay for the production of the device. The dirty little secret is that the true goal of a crowdfunding campaign is for the marketing and social hype of the product. These early supporters are also good ‘beta’ testers for hardware and software that isn’t quite ready for primetime. At the end of a campaign when the founders state that they couldn’t have done it without the crowdfunding supporters, it isn’t really true. I am sure they appreciate your support, but the device couldn’t be produced without the behind the scenes equity backers. After the initial crowdfunding campaign ends, the social sharing and chatter about the device dies down and the social crowdfunding machine winds down until the device is eventually released.
WHAT YOU CAN DO
As a supporter of a campaign, you can flex your social muscle by posting about your experience. Positive support will help spread the word of the product with your social contacts and hopefully grab them more customers. As long as your negative criticism is truthful and honest, you should not have issues. Just don’t spread lies about a campaign because they run behind schedule or have to change or drop features. A social share does a lot to promote a product, so that is where your real power is.
Even if you feel let down by a product, you will still most likely want the company to succeed because you want your device to be supported with software updates and support. Getting a hardware device out to market is an incredibly difficult task to carry out, so the honest and hard-working founders do need and deserve support from the community.
If you read everything above and still want to fund a campaign, you may be ready to take the next step and support a crowdfunding campaign.
Support a campaign via Kickstarter or Indiegogo today.
Feel free to let me know in the comments section if you see anything that is not accurate and I will try to correct the information as soon as possible.
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