We work with many startups and entrepreneurs at Truly Deeply and one of the very first conversations we have with new clients, especially startups is, “How can we disrupt the category?” “What’s better about us?” “What can we do differently from the rest, what is our point of differentiation?” This can always be a difficult question to answer unless you genuinely have something different to the rest. Cutting your competition through pricing is no way to build brand value so it’s really important to ensure you have a clearly articulated vision of your brand, who your audiences and how to best engage with them. Deciding on a primary audience can be tricky as often brands want to be a one-stop-shop and appeal to all.
Marketing can be tough for startups when cashflow is non-existent and a correct launch-to-market strategy is crucial to reach and engage your audience, convince them your product is right for them, and get them to switch from another brand they are loyal to. A tough feat.
Is crowdfunding an option for startups?
A client of ours has been considering utilising crowd-funding sites like KickStarter or Pozible to raise funding for their new product in the very early stages in an ethical category. I’ve been looking into the category recently and seeing more and more businesses, brands, musicians, charities and corporate companies utilising the platform, which got me thinking… They’re not startups! Don’t they already have the budget?!! Crowd-funding began as a tool for start-ups with little or no budget to fund their project in the initial stages, to get it up and running. Those who donate, will receive a gift of varying value, relating to the product and the amount donated.
Since crowd-funding began, we’re seeing a big shift in the actual motives of businesses looking for capital. Businesses are now using the platform almost for market research purposes to ascertain if there’s appetite in the market for their specific product. This way brands can sense check their product’s relevancy, build a core following by engaging these audiences in the very early stages of the brand, nurturing brand advocacy and allowing them to be part of something they are passionate about, or interested in.
Why the model works
The genius behind crowdfunding is instantly connecting fans to the creators, essentially fans are pivotal to the success of the business and the product launching. You could say the same for consumers in general but there’s something special about contributing to getting a project, up-and-running and being part of it that get’s people hooked to donate.
Padkix Kickstarter campaign
I found an interesting product on Kickstarter during the week, which I found through Facebook. We’re old hats to the feminine hygiene category at Truly Deeply, having reinvigorated the Tom Organic brand and always interested in brands that raise an eyebrow and have something different to offer.
Padkix is essentially a reusable sanitary underwear (some might call it a nappy!), which they claim can be worn for far longer than any alternative products, it doesn’t leak and is reusable and washable.
Looking for only $3,000 led me to believe they are using crowdfunding to test the water for market research. This is a niche product, albeit a little gross for those who don’t want to hear about it, which meant the project trended online and started a conversation about something that people don’t really want to talk about. The prizes are product, which they are currently shipping to customers. I believe this will be a really successful campaign and a launching pad (excuse the pun) for the brand into the market, they already have a leg up in gaining customers with 2,000 already using and promoting their product.
What do you think?
It all depends on your product / cause really. But I do believe it’s worthwhile for startups who potentially have something interesting to offer to test the water through crowdfunding. What’s really important is to know who you are looking to position the brand towards and build a compelling video to entice them to back your project. Where I think Padkix have missed a trick is failing to fully develop their brand for this campaign. They have developed a quick and easy video but there’s very little consideration for the brand. I wonder how much impact they could have garnered if they had developed the brand to it’s fullest potential?
Director of brand projects
Pics courtesy of Kickstarter.