Crowdsourced funding has been all the rage in recent years since it can help a company develop and deliver a great product in no time. But for the uninitiated, there can be a lot of questions about crowdsourcing and how it can be helpful to a business who is looking to bring a new product to the marketplace. Some of these questions include what is crowdsourced funding? How can I get started, how does it work? What can I do with the money once I have it? How can crowdsourcing help me develop and deliver a new product faster and easier to my customers? Let’s take a bit and look at each of these questions a little closer to help you understand how crowdsourcing can help you just like it has helped so many other businesses just like yours in a wide variety of ways.
What is Crowdsourcing?
Crowdsourcing is a term that is applied to the practice of using a large pool of individuals who are not directly and officially associated with your organization to acquire funding, or perform a task. The individuals are what one could consider “pseudo-investors” in the instance of funding acquisition, or “pooled freelancers” in the instance of using them to perform tasks such as research, testing, or branding.
What is Crowdsourced Funding?
Crowdsourced funding is perhaps the best-known type of crowdsourcing. Made popular by sites such as Kickstarter, and IndiGoGo, crowdsourced funding has become one of the hottest trends in business. Participants invest an amount into the fund, which the organization can then use to achieve their means. By spreading out the funding campaign over a large pool of small time investors, the odds of funding success are greatly increased.
How Can I Get Started with Crowdsource Funding?
One of the best ways to get started if to sign up with a crowdsourcing partner such as Kickstarter, or IndiGoGo. Sign up and completed the process of becoming a campaign runner. Once you are verified and your account is active (should take 2-3 days’ tops for this to happen), then you can set up your first campaign and start promoting it. After that it’s just a matter of running the campaign and waiting for funding to get fulfilled.
How Does Crowdsource Funding Work?
You create a campaign outlining who you are, what you do, and what the funding acquired from the campaign is going to be used for. You then set reward levels, and start to promote your campaign. When those who are interested come to your page, they will have a set of reward levels to choose from offering various rewards for pre-established donation levels. They make their pledge, and then when the campaign is completed, their credit card or bank account is debited and the money gathered to a single fund that is released to you. You then have the obligation to fulfil the promised rewards to the donors. If the campaign does not complete successfully, many times you can either extend it, change it and try again or just let it expire. In the latter case, you have no obligation to provide the rewards, and the donors account is never debited for their pledge. In the end, you get the funding that you need and your donors get a great opportunity to have an inside track for a new product or service with awesome rewards as a bonus.
What Can I Do with The Funds Once I Have Them?
This is one of the most common questions that arise. The answer is simple, and yet it isn’t at the same time. The simple answer is that you must use the funding that you acquire to fulfil the stated purpose of the campaign. Now that being said, you do have some leeway in how you use the funds. You can use them for anything that you do that pertains to the stated purpose of the campaign. For instance, if you are developing a new app, you of course want to use the bulk of the funds for the coding of the app, but you may also use a portion of the funds for testing of the app, marketing the app, researching the app, and so on and so forth. To distil the answer down you can use the funds for anything that you need to as long as you are fulfilling the purpose stated in the campaign for raising the funds in the first place.
How Can Crowdsourcing Help Me Deliver a New Product to My Customers Faster & Easier?
Crowdsourcing can help you to deliver your new product, website, service, or app to market faster and easier than ever before because is spreads the base of your funding out, or increases the pool of other resources so that you can get things done faster and with less in-house obligations and expense. For example, one service called CrowdSprint allows those who are developing websites or apps to pay for a pool of professional testers made up of real world people to use and test a new site or app in their everyday lives. The advantages of this type of crowdsourcing are that you can reduce the overhead of having an in-house testing team, while at the same time getting faster testing results and a broader range of real world application data from the testing group. This is only one such way that crowdsourcing is able to help with the development of a new product or service and make it easier to get your deployment mission and roll-out successfully completed. You can find more information here.
Can We Predict the Future of Crowdsourcing Now?
This is a mixed answer question. I think that yes to a degree we can most assuredly predict that crowdsourcing is going to play a very significant role in all aspects of business in the future. Crowdfunding may have been the first concept to emerge from the crowdsourcing idea, but the model is now being applied to all types of things, including software testing, product testing, researching, product brand building, even marketing and advertising. Indeed, crowdsourcing is going to be an integral part of business operations for all business in some way or another for the long term foreseeable future.
With crowdsourcing, a business can now gain the funding that it needs and then use that funding to complete the important tasks that are needed, also with crowdsourced resources, to bring a new product, or service to the market quicker and easier than ever before. It has changed the way that business handle mission critical funding, development, and roll-out programs for their new products and it seems that this is just the beginning.