5 REASONS CROWDFUNDING WORKS

Crowdfunding is a modern way for entrepreneurial people to launch companies, create products, and more. You know a topic is hot when a Google search finds over 10 million results. It’s now a proven business model with numerous examples of success including several projects that have raised more than $1 million dollars each.

SPOTLIGHT - BuyCleenz.com

If you have ever heard the story of Diapers.com, the company Amazon bought for $550 million, then you know that people want home delivery of household items that save them money. That’s why Kaeron Consumer Products is crowdfunding to launch a new subscription service for home delivery of bathroom tissue. More homes use bathroom tissue than diapers, so this seems like a winner. You can visit the project to learn more, support it with a pledge, or subscribe early at www.BuyCleenz.com.

As usual, traditionalists are suspicious of crowdfunding because it’s different. Innovators see something new and are planning to use it soon. Early adopters are pushing to evolve crowdfunding to something better. What seems interesting is that while many understand what it is, few seem to understand why it works so here are seven reasons to consider:

1.     People Decide What They Want

Crowdfunding allows you and I to decide what products get made for us.

Years ago, only employees at manufacturers, distributors, retailers, and others could decide what products people could buy. Manufacturers chose products they could make themselves. Distributors chose products they could buy for less than competitors. Retailers chose products they could sell profitably. We once had no alternatives.

2.     People Care and Like to Help

Crowdfunding lets me launch new companies and build better products.

Starting a new company is challenging and building new products is expensive. These are top reasons why even highly popular startups can fail. The current economic environment makes it difficult for new companies to borrow money or raise funding, but it seems there are often fans that are able and willing to help.

3.     Innovation Waits for No One

Crowdfunding allows ideas to be shared and reviewed by real people.

You may have experienced a time when one of your favorite products was discontinued.  One of the reasons this (still) happens is that a traditional innovation process involves releasing many products, identifying the top sellers, discontinuing the rest, and repeating the process. Eventually, even innovative favorites can disappear.

4.     Anyone Can Start Something

Crowdfunding lets more people launch new companies and products.

People once had to start a company or build a product so they could test their ideas, collect comments, or sell products. What if you could show your product to others online and get sales BEFORE you built the product? What if you could describe your idea to thousands of people and get lots of motivated investors? Now you can.

5.     Crowds Pick the Winners

Crowdfunding is a democratic process that leverages the wisdom of many.

Even the world’s most influential experts make mistakes, so relying on the opinion of one person or a small group is naturally risky. You can minimize the chance of receiving “poor advice” or making a “bad choice” by increasing the number of people that inform your decisions. A quick way to begin is to ask open questions on social networks.

Each crowdfunding site and project is unique so please review all available information before deciding to participate. Even so, a small pledge to a few projects can make a meaningful difference in the success or failure of a new entrepreneurial company or innovative product.