Optimize Customer Discovery: Entrepreneurs are using crowd funding platforms to do more than raise money
Testing your assumptions to validate that your product has a market is one of the crucial steps in the innovation process. When I ran food business incubator Food Starter, each week we sent two of our entrepreneurs to the St. Lawrence Market to showcase their products to consumers. Beyond the revenue they generated from sales, these product developers benefited from insights they gathered which helped them to improve their branding, value proposition and positioning. Did people care about their package claims? Would they use the product everyday or for special occasions? Should the product be sold in a box or a bag? All of these questions could be asked and answered by dozens of people in the course of a morning, providing solid evidence to drive decision making. Likewise, when I was innovation lead for large food companies, trade shows, food festivals, instore sampling and focus groups were essential tools used to gather feedback from our target customers.
With such activities off limits until Covid19 is under control, it’s been difficult for food innovators to truth test their assumptions and find ways to validate product market fit; in fact, I’ve been struggling to help my clients to go beyond A/B concept testing on social media. Fortunately, I found myself working with Voula Halliday and now the way I approach customer discovery consumer concepts has changed forever!
Voula is a born innovator and serial entrepreneur who recently became a Blue Unicorn mentorship client because she wanted a second set of eyes to review the business model and go-to market strategy for a new business. As so often happens when I work with entrepreneurs, I learned a ton working with Voula – especially about how she and a new tribe of entrepreneurs are using crowd sourcing platforms like Kickstarter to truth-test their branding and value propositions.
“Kickstarter is a low price of entry opportunity to test your assumptions about your product,” says Voula. “The experience inspires you to want to take risks and to think critically. If your campaign doesn’t work out, you’ve only lost time. Crowd funding is very empowering for entrepreneurs.”
According to online sources, more than 10% of successfully funded Kickstarter entrepreneurs return to the platform because the learning they glean from creating and conducting a campaign is so valuable. Called ‘creators’ by the crowd sourcing community, some entrepreneurs have used such platforms five or more times to test, refine and launch food products, cookbooks, restaurants and more.
“There are two valuable gatekeepers when you crowd source,” explained Voula. “First the platform itself walks you through important steps that help you to define your benefits and value proposition. Then, while managing your campaign you tweak and pivot almost daily to refine your offering to attract the right eyes to your campaign. If you’re successful, you have your positioning nailed by the end of the process.”
While the benefit of workshopping your idea through such a platform seems pretty obvious for food entrepreneurs who are new to the food business, insiders like Voula say it can work for big companies, too: “Say, for example, if I were the CEO of Kraft. I’d assemble an innovation team to create products and test them on Kickstarter as a way to define the market, test trend assumptions and learn about the culture of the target consumer,” she says.
FYI, be among the first to know when Voula Halliday’s next Kickstarter campaign lands, by signing up for her mailing list.
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Voula Halliday’s Top Tips for Kickstarter
Here are the top reasons Voula recommends for becoming a Kickstarter Creator.
- Access to seed money for start-ups
- No dilution: founder keeps all the equity and ownership
- Success on Kickstarter is often meaningful to investors, lenders, and other business partners.
- International access to new business/customers who might otherwise never know you are there
- Access to early adopters and buyers/distributors who come to the platform to find the next big thing
- Insight Gathering:
- Backers provide valuable feedback
- Allows the entrepreneur to test new market before branching out
- Skills Development
- Kickstarter “rules” provide structure and an opportunity for strategic thinking for things such as content, images, rollout, and follow-up
- Gets indie business owners thinking in terms of commitment to the business and what it takes to get up and running: time, strategy, structure, sustainability
- Helps founders to thinking about branding, messaging, and what need(s) there products are filling
- Builds a community of brand and brand advocates/ambassadors
- Kickstarter pages remain on the platform after the campaign is over helping your long-term marketing