Wait... why are we not crowdfunding more?
So I realized something.
We all hear this advice on IH all the time:
- validate the idea first, then build
- try to sell before building
- the only way to truly validate idea is to get a person to pay you real money
But... That's what people in other industries already do all the time! It's simply crowdfunding.
And yet I don't see many people validating their business ideas in that way on Indie Hackers, unless I am missing something. I think most people here are making landing pages, or building MVPs, or straight up just building the apps first.
Why? What are the issues? Is there some aspects of crowdfunding that makes it unappealing for SASS, mobile apps or website projects that most of us have?
Why YOU don't crowdfund your project?
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Most folks don't have a crowd to fund them yet.
Also, in my experience (having made millions of dollars in sales, pre-sold to the tune of hundreds of thousands, and crowdfunded to the tune of tens of thousands) crowdfunding doesn't make sense for a lot of products in the same way that pre-sales does.
The benefits of crowdfunding really kick in when people back a project they believe in because they're MUCH more likely to back and share that they are a backer. Which brings me back to my first line: most folks don't have a crowd yet, and if they're gonna put the work into building that crowd, odds are that preselling makes more sense than crowdfunding.
Sidenote on preselling AND crowdfunding is that they both post a non-obvious challenge for the creator: while some people are highlight motivated by "money in bank" early on, I've observed many many many more people who end up incapable of working due to the pressure of feeling like they owe their pre-sale customers something.
This isn't a universal thing, but it's a notable pattern that everyone I've talked to about it didn't expect to experience.
Alex, thanks for the words. I would like to know what is difference for SaaS to crowdfunded or pre-sale? I building Automatio.co and thinking having either pre-sale or crowdfunding, but not sure what to do.
Crowdfunding looks it can get you a lot of funding if its get momentum. The platform itself can boost you. Whats your thoughts?
Also my point is - at least in Eastern Europe, where I live - "pre-selling" stuff is a completely unfamiliar thing from a consumer standpoint.
On the other hand, crowdfunding is very familiar and well known thing. Everyone in Poland knows what Kickstarter is. We even have some polish-specific platforms now.
What I am saying is - you could probably increase your chances of getting some cash simply by using something that is considered a crowdfunding platform instead of collection the checks "on your own".
Also, I don't mean crowdfunding as "collecting all the money needed to build the full product".
I mean it as "making sure your product is worth something by testing if people are actually willing to pay for it".
To phrase the same thing differently: why we don't vote on product hunt with actual money in exchange for year-long subscriptions, when the product actually gets shipped? ;)
To phrase the same thing even more differently: why do we separately work on creating landing pages when we could create one platform, solve payments there once, promote it massively and then just present our ideas there and see who collects money? We literally could create a product hunt / kickstarter mix where people vote with their wallets.
I think you're seeing crowdfunding - Kickstarter specifically, but also crowdfunding in general - as something that it is not.
The value of Kickstarter isn't that it's "known." Putting something on Kickstarter is no more beneficial than launching a product sales page. Projects don't just magically get funded by the crowd.
What happens on Kickstarter - and with a well-executed crowdfunding campaign in general - is that it gives you a place to bring YOUR crowd and it makes their contributions visible, which acts as social proof and momentum. Kickstarter editors don't pick projects they like, they pick projects that have momentum to feature.
Successful Kickstarter campaigns typically take months of work to launch and a lot of that goes into "pre-selling" contributions before launch day so that when launch day comes, it looks like they shoot up to 20-40% on the first day. This momentum both catches the eye of kickstarter editors, and makes the overall campaign more attractive to backers because nobody wants to be the first backer or back something they aren't confident will meet the goals.
If you don't bring that initial 20-40% of contributions at launch, the odds of getting funded across the finish line are near-zero.
Book authors have been doing this for decades too! It's extremely common to do pre-sales campaigns as well as bulk-purchases (with rewards) since all of the pre-sales count towards first week sales. When all of those pre-sales hit, you end up climbing the sales charts. Then you get the sales benefits of being on the chart...making sales because people found you on a bestseller list or something like that.
Kickstarter is a lot more like that bestseller list than ProductHunt (on top of which....ProductHunt users rarely convert to buyers).
So it all comes back to: you have to put in the work to make those first 20-40% of sales to begin with, AND THEN spend the time and money fulfilling on rewards, AND give Kickstarter or another crowdfunding platform their 10% fee instead of just credit card fees...you already need to be more confident than "validating an idea" and you may as well put all of that energy into selling (or pre-selling) directly.
"I think you're seeing crowdfunding - Kickstarter specifically, but also crowdfunding in general - as something that it is not."
Sure, you are right. I don't mean crowdfunding then.
I mean completely new thing. It will be called zubzubing.
Zubzubing is NOT a way to fund a project.
Zubzubing is a way to validate your initial product idea.
Why do people post products on product hunt? Because it gives them initial audience and allows them to validate an idea with "votes".
But we are all probably aware that votes are only a rough estimate of an actual interest.
Much better estimate would be this thing called "money".
"ProductHunt users rarely convert to buyers" - and that's exactly what I mean!
Why do we waste time making product hunt launches, creating fancy landing pages and prototypes to validate our ideas? Let's just make a platform where people will literally pay for good ideas.
Wouldn't this give you much bigger confidence that your product is worth something?
And yes, people would still have to promote their projects on their own in some capacity. But you have to do that with landings as well.
So if both methods have this drawback, why do we default more often to landings with emails and not collecting actual money from people?
(I guess it's time to buy zubzubing.com ;D)
I get ya! I think the thing you're describing still has the same fundamental flaw that makes PH launches a lousy feedback loop.
It's not that people don't buy - that's a symptom, not a cause.
The cause is because Product Hunt isn't an audience, in the same way that Kickstarter isn't an audience.
I wrote more about the ProductHunt problem a while back: https://stackingthebricks.com/dont-launch-product-hunt/
Think about other marketplaces:
Listing a product isn't what helps it get sold. Those platforms can magnify the impact once you have established a presence, but again, that doesn't solve the "validation" problem.
I somewhat disagree (although not strongly, this idea would have to be.... ekhm... validated ;D).
My arguments are:
therefore
crowdfunding platform is better for validating your product than making your own pre-selling strategy / product hunting / landing pages with gathering emails.
To be honest, I don't really understand your position. Crowdfunding is bad for validation, product hunt is bad for validation, pre-selling is bad for validation (?).
So what is good in your opinion?
What's good? The thing that doesn't require validation! 😎
Do the research on a specific audience you belong to.
Understand what they need want and buy.
Earn their trust.
Start small and buiod things that solve specific, focused pains that you find in yout research rather than building on a hunch or idea.
Launch something you know people want, because it solves a problem they know they have.
Well now I am going full circle, because the thing that brought me to write this post was my disappointment in how ineffective and inconclusive researching a given market is. :D
@alexhillman
Thanks for the resources, I will definitely read them all.
Appreciate the discussion!
Ha we broke indiehackers!
What you described isn't research, which is okay and totally a common confusion.
Observational research is the sauce you're lookin' for.
Some recommended reading for you:
Well, the tree got too deep and now I can't respond to you @alexhillman ;)
My research so far was:
a) using my own experience (I am building a product I want to actually use myself).
b) conversing with people about their habits of learning mathematics. What resources they use, what actions they take when they don't understand stuff etc.
I am still in this process, but I don't feel much more confident that my ideas are valid.
My 15 years of business experience across several businesses and hundreds of our students deploying research to launch products to paying customers on day one by using research makes me ask: what does your research approach look like?
Cuz a lot of "research" that we see folks doing is really just validation all over again. ;)
They really broke IH. Many gems in their convo.
This comment was deleted 3 years ago.
That's interesting.
I guess they try to protect themselves from scam projects that are "designed to fail", but because of that the process is very unpleasant.