There’s a type of fan funded marketing being done online, especially on social media, that is actually changing the way companies are built, and not nearly enough people are talking about it.
One of the things that’s really worked well to get my attention as a consumer has been Facebook ads. Marketers have been able to dial those in to my personal interest with shocking accuracy. A lot of the time companies reaching me via Facebook are ones I’ve never heard of before. And often, they don’t even have a product to send me yet. … But they can still sell it to me!
That’s the really exciting thing to me. Platforms like Kickstarter and Indiegogo allow companies to launch without a product, without a lot of funding, and essentially presell enough product (with add-ons and kickers to boost order value) to guarantee the success of their first product.
I didn’t actually end up buying one of these speakers, but only because the best speakers I currently own are probably the ones in my TV, so I’m not the kind of audiophile who can justify (to his wife) spending $300 on a speaker.
The marketing was done entirely through social media, Indiegogo, and word of mouth, and it had me totally sucked in. I was an inch from pulling the trigger, and I still might.
That marketing campaign created over $62,000 in funding, all of which represents various kinds of presales of the main speaker and various perks/upgrades. That’s more than enough to reach their goal and launch the company.
Think of what Princeton Audio did there. Too often we look at crowdfunding as nothing more than a donation engine. But that’s not really what’s happening here. This is the new face of social marketing, call it “fan funding,” and it is so powerful that it can actually let you use marketing to launch the company.
That’s really a 180-degree turn on the traditional way start-ups grow. Usually you come up with an idea, bring in a partner, bring in angel investors, then venture funding … all the while trying to develop your product and make some revenue on it. Marketing is secondary because your early goal is to get investor funding.
Fan funding lets you do the opposite. Instead of investors, you attract a fanbase, and that’s a marketing foundation that can carry your company for the long run.
The power of the fan funding/social media marketing platform in this case was enough to get to me, a guy who sees thousands of ads a day and doesn’t even own a stereo, to seriously considered buying one of these high end speakers. (I would love to know what in my Facebook profile tugged their ads in my direction.)
Princeton is hardly the first company founded on crowdfunding that’s gotten my attention, either. Just a few months ago I did buy into a product called Cthulhu Wars by a man named Sandy Petersen.