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How to Use Crowdfunding Campaigns
to Test Products for Marketplace Demand
Is There Really a Large Market Demand for Your Product or Service?
One of the coolest benefits of launching crowdfunding campaigns is that it allows inventors, entrepreneurs and startups to test the waters before maxing out credit cards, taking out a second mortgage on the house or borrowing money from loan sharks.
Launching a crowdfunding campaign is free and the only real costs you’ll incur are the costs to shoot a pitch video and hire a marketing firm to help you promote your crowdfunding campaign via marketing, PR and social media networks.
Before crowdfunding campaigns were introduced to the marketplace, startups would borrow a ton of money, build prototypes, conduct focus groups, sign manufacturing contracts, and spend millions of dollars on advertising to bring a product to market with no real guarantee that consumers and businesses had a pent up demand for your product or service.
Not only can business test different color schemes or evaluate various product brand names, but they can also learn what price points customers are willing to pay to get the fastest game console ever, the latest automotive car monitoring app or the latest and greatest bug zapper.
In fact, at the Consumer Electronics Show (CES) in Las Vegas this year, many entrepreneurs were surprised to learn that Venture Capitalists have now added the requirement to their term sheet that a startup needs to have successfully completed a crowdfunding campaign before being considered for any equity investments.
It makes good common sense. Why give anyone several million dollars of seed money if they cannot successfully generate support or show strong product demand via a crowdfunding campaign?
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Mr. Hoskins is a serial entrepreneur and has been helping entrepreneurs, startups, small businesses and Fortune 500 corporations launch successful marketing communications campaigns for 25-years. He is positive that Crowdfunding will empower all Americans to rediscover the possibility of living the American dream with a little hard work, a great business idea and dedication to planning a well-thought-out crowdfunding campaign.
Tags: Product Testing