When you see Indiegogo and Kickstarter campaigns raising hundreds of thousands of dollars to produce new tech, design, or fashion projects, it’s easy to think that crowdfunding and ecommerce are one and the same.
After all, when you successfully raise money from the crowd, you’ll have to deliver on the rewards you promised, which might include the product, accessories, and enhancements, like different color options.
How is that different from selling a product online, or offering pre-orders?
Two words: Motivations and Expectations.
The motivation of a backer vs. a customer
Backers support crowdfunding projects for emotional and rational reasons. There are two main reasons why someone might pledge money to your campaign:
1. They like you.
People who like you could include members of your social network or local community. They decide to support your cause because it’s important to you (therefore your relationship with them) and you are passionate about the project.
The great thing about the internet is that online video and text content also allows you to develop relationships with people that you don’t even know in person.
I don’t know about you, but I feel like I know some of the YouTubers I watch and know the hosts of podcast shows I listen to.
The truth is, I’ve never met them, but I know lots of random little facts about them, have a feel for their personality, and could probably pick a good birthday gift for them.
You might even have a sense of who I am and what I’m passionate about just from reading some of my emails, listening to my podcasts, or reading the blog posts on this website.
In marketing terms, I refer to this as developing relationships at scale and it’s a powerful component of a crowdfunding campaign. You can get support from people who are interested in the same field you are, who have a high disposable income, and who want to help you realize your dream.
This rarely happens with ecommerce or other forms of business.
2. They like your product
This is the second major reason that backers support crowdfunding campaigns.
They love the product or project! They want to participate in its creation and own a copy of the finished product.
If you could read the thoughts of backers when the first see your project, they would probably say:
“Wow that’s so cool!”
“That’s slick! Very sexy.”
“Take my money, I want one.”
The important distinction here between ecommerce and crowdfunding is that the product is not yet made.
Backers are supporting the creative process leading up to the mass production of the product and are embracing the fact that you might not deliver, that there may be delays, and that they might not get exactly what they want.
Obviously, it’s best to avoid these pitfalls, but you as a creator must set expectations so that your backers view the process correctly.
How does does this differ from ecommerce?
Think about the last time you went on Amazon.
You might have gone just to window shop, but more likely you had a specific problem in mind that you were trying to solve and you were looking for products at a good price that would solve that problem.
For example, you might have needed a container to hold your clothes and you went online to find an affordable dresser that looks good and that you could have shipped to your house.
Think about the last time you searched for a product on Google.
Maybe you needed a new iPhone case and found some cool ones sold on an ecommerce store independent of Amazon.
You can debate me in the comments below, but I believe that one of the main differences between ecommerce and crowdfunding in terms of consumer behavior is that ecommerce customers are searching for specific items and crowdfunding backers are out to discover cool new projects.
Why is this an important difference?
Because it should be the bedrock of your marketing!
Since crowdfunding backers are out to discover products or games, not search for them, you need to be on the platforms, contacting the news websites, networking with the influencers, and be interacting in the communities where they discover the projects.
If your goal was to build up an ecommerce store, then you need to target the key terms that your customers might use to discover your website on Google, Amazon, or any other platform that they use to find products.
Ultimately, you might have to learn both forms of marketing. When polled, many of the Kickstarter project creators on my forum said that they intend to start an ecommerce store after their crowdfunding campaign.
Which should you go from here?
If you decide that crowdfunding is the right fit for you, you can begin by subscribing to this blog or joining one of our forums! I also recommend checking out these platforms.
Otherwise, I’d look into Shopify to build your online store if you’re just starting out. Otherwise, if you are familiar with WordPress, you can always set up an online store using WooCommerce.
I’d recommend looking into Bluehost to host the store. They are pretty reliable and all of my websites use them. Let me know if you have any questions in a comment below!
