If you’re a developer, you know how hard funding and traction are to come by. Most software startups try crowdfunding and fail — they’re doing it wrong! To crowdfund your app, and supercharge your business, let’s look at what works, what doesn’t, and get started right!

Mark Johnson

Crowdfunding Your Ideas

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    If you’re a developer, you know how hard funding and traction are to come by. Most software startups try crowdfunding and fail — they’re doing it wrong! To crowdfund your app, and supercharge your business, let’s look at what works, what doesn’t, and get started right!

    It’s no secret that the crowdfunding industry is booming. It seems like every day you hear about an exciting new startup crushing their campaign goals and launching their company via Kickstarter or Indiegogo.

    Despite the rapid growth of crowdfunding platforms and campaign successes, crowdfunding is still a foreign concept to most. As such, let’s briefly explain the mechanics and guidelines for a more solid foundation before exploring launching a software startup with crowdfunding.

    With the advance and expansion of e-commerce, which now accounts for 7% of all consumer retail according to US census data, individuals are shopping locally less, now being able to buy anything with the click of a button. This has democratized the consumer–business relationship because customers have a far greater choice.

    With the power to choose, consumers are opting more for small startups and more personal connections. Hence the explosion of crowdfunding. Furthermore, backers prefer to be early adopters, people who get the product first and are actively part of the startup’s success. In addition, entrepreneurs who were once unable or unwilling to pursue financing can now cut the risk and crowdfund instead.

    As a crowdfunding consultant and host of Art of the Kickstart, a podcast and blog on all things crowdfunding, one thing I get asked about incessantly are crowdfunded apps. Many of social startups and mobile apps companies raise massive outside investment looking to change the world and result in stock market launches (initial public offerings or IPOs) or acquisitions down the road.

    Despite these successes, most people would be hard pressed to name a single crowdfunded app. Personally, I’d never heard of a successful crowdfunded app before performing in-depth market research for my first app client. Such apps are rare. But why?

    Crowdfunding seems the perfect platform to launch an app or software product. Unfortunately, non-tangible products are poorly received. This stems from the origins of crowdfunding, because crowdfunding was originally conceived as helping creative people create that which could never exist without funding. For example, films have inescapable budgets, and physical products need molds, manufacturing and expensive minimums. Neither is possible without significant startup funds. However, apps and software are the exact opposite. Time and expertise are all that is necessary, inventory costs are zero and there is funding aplenty for those willing to part with equity.

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