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Why You Should 'Shark Tank' Your Idea Before Launching A Crowdfunding Campaign

posted Sep 21, 2014, 9:18 PM by J Shaw   [ updated Sep 21, 2014, 9:18 PM ]

Before you launch your campaign, pitch to someone with a "shark-like" understanding of your market.The crowdfunding success stories are intoxicating.

Most of us can’t help but admire those who, after getting millions of dollars for watches, beer coolers and games, transform from lowly aspiring entrepreneur to Wikipedia-worthy, in-demand exec with vision.

But in reality, successful crowdfunding campaigns are the exception, particularly technology campaigns.  Just look at the numbers. Overall, Kickstarter has a 41% success rate for launched projects, and only 28% of technology-centric projects hit their targets.

And that’s just the fundraising part. The real work starts after a project creator gets the funds and have to actually do the hard work of creating the product. While I don’t have any hard numbers on how many projects actually deliver, I can say I think the number of hardware projects, for example, that do deliver on time is very low.

Pitch to someone with a “shark-like” understanding of your market before starting your campaign

The hard work that is crowdfunding has led to some to criticize it, particularly hardware crowdfunding, as something that needs much higher scrutiny.  Kickstarter has changed its terms of service and put more strict requirements on those hardware companies which fail to deliver.

For my part, I’ve become much more skeptical about crowdfunding projects. Writing for Forbes and Gigaom and focusing on consumer tech, I get a lot of pitches from aspiring crowdfunders who want me to write about them. It makes sense. Targeting tech blog writers is step #1 in the tech crowdfunding handbook (of which I am sure there are many).

Occasionally I’ll email back and ask to hear more. Most I ignore. And every once in a while I’ll give feedback, letting the creator know if I think they have to change something which I think could be a problem.

I did this recently when I got an email pitch from Mason Lawlor, who turns out is a nice guy who had an so-so idea (at least in its pitched form) for a smart home hardware product which he wanted to get funded on Indiegogo. As someone who follows the smart home market extensively, I’ve developed a pretty good understanding of what’s on the market and where there are holes that a startup can take advantage of.

After reading Mason’s pitch, I felt the idea and product needed a little work. I told Mason so in my email, suggested changes, and we had a respectful email dialogue about his prospective product.

I soon invited him to talk it out and see if he could convince me otherwise. He agreed, and we had essentially what was a Shark Tank type session where he pitched and I gave him feedback on his idea and Mason, to his credit, listened and decided that he needed to spend a little more time on the idea before he was ready to launch a campaign on Indiegogo.

Now, I fully understand  I am no Mark Cuban or Mr. Wonderful, and my feedback session wasn’t ever going to result in an investment, but what it could do was give a reality check to the entrepreneur from someone who can give an informed read on the likely success of a campaign because they know the market well.

In reality, I think this is something that more prospective crowdfunders should do.  Pitch your idea to someone who knows a market, a person who is not a friend or loved one, someone who will give you honest feedback.

Sure, you never should stop believing in yourself and there’s always the slight chance you have a vision that will be validated in a massively successful crowdfunding campaign. However, I think its probably safe to assume you’re not a Steve Jobs-esque visionary and by getting some sober market feedback before hitting the launch button, you can help your chances of success. And, in the case your product wasn’t quite as different as you thought it was, you also give yourself an opportunity to work on it and make it better before hitting submit.

Because like I told Mason, your campaign really only has one chance. Once you let the cork out the bottle, there’s no putting it back.

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