In 1885, the construction of the Statue of Liberty came to a standstill. 350 pieces sat in New York awaiting assembly. The city of New York couldn’t raise the final $100,000 needed to build Lady Liberty’s granite pedestal.
Without the funds, the statue would be sent back to France. Seizing their chance to win over Lady Liberty, Baltimore, Boston, Philadelphia, and San Francisco stepped up to fund the project instead.
Joseph Pulitzer couldn’t stand for this. In his paper The New York World, he urged the people of New York to rally together to keep Lady Liberty in their beloved city.
This became one of the first documented crowdfunding projects in US history. Over 160,000 people responded. Men, women, and children, rich and poor, joined the cause. And the success of their efforts is clear — Lady Liberty stands proudly over New York Harbor today.
The Basics of Crowdfunding
That’s the power of community crowdfunding. When people unite under a common cause, they raise significantly more funds and accomplish extraordinarily better results than any one person can do alone.
Let’s dive deeper into the role of community in crowdfunding. We’ll discuss:
- How a strong community helps you overcome common crowdfunding challenges and pitfalls
- How to gain a social media following for crowdfunding
- Expert insights on the benefits of social crowdfunding
The Role of Community in Crowdfunding
The crowdfund community is extremely vibrant.
At LaunchBoom, we like to characterize backers on Kickstarter and Indiegogo as people who “want cool stuff, at a discount, before anyone else.”
These people are constantly on the lookout for new ideas and projects. They want to be “in the know” about the next cool thing before it gets popular. And together, they make powerful waves — Indiegogo gets ten million visitors each month and Kickstarter has raised over $7.7 billion in pledges since its inception.
That’s why crowdfunding is a growing choice for entrepreneurs. By harnessing the power of community, you build an engaged, passionate, loyal customer base — one that sticks with your brand for years to come.
Building a Strong Community
Crowdfunding isn’t easy. But having a strong community will get you past some of the largest hurdles.
Challenges and Pitfalls
Here are two major pitfalls to avoid when launching a campaign:
Not knowing whether or not your campaign will be successful
- Falsely thinking “If I build it, they will come”
Challenge #1: It’s difficult not knowing whether or not your campaign will be successful
We spoke to David Stevens, the founder of iHarvest, which raised $274,805 on Kickstarter.
“In many respects, the hardest part was waiting to see whether or not the campaign would be a success. That’s because what I was really waiting for was the determination of whether or not the past 2 years of my life had been a complete waste of time.”
David’s fear is common. There is always risk and unpredictability with crowdfunding. Building a strong community will mitigate that risk by allowing you to test your product on a smaller scale before launch.
We call this the TestBoom system. Here’s how it works.
- Develop initial hypotheses of how your product should be positioned in the market.
- Build a Reservation Funnel and drive traffic to test your hypotheses.
- Analyze the data using a predictive model.
Here’s how we used TestBoom on Author Clock, an innovative clock that uses book quotes to tell the time of day.
We modeled three different scenarios: a low, normal, and high-performance scenario. We also predicted purchase rates for both VIP and non-VIP leads.
These testing results helped us validate market demand and gain confidence in our product and positioning. We continued to use our community for testing ad and landing page content before scaling to larger audiences.
When we were ready for launch, we’d given ourselves the best chance of success. Author Clock raised $296,741 in 24 hours and $1,316,465 by the end of the campaign.
Challenge #2: Thinking, “If I build it, they will come”
Bubba Albrecht, the CEO of Give’r, shares this piece of crowdfunding advice:
“The thought of “if I build it, they will come” can lead to heartbreak and confusion as a creator.
While many think “I’ll get the campaign launched and then reach out to the people in my corner”, know that you’ll have far less time and bandwidth to make this happen once you’re live. The goal is to inform those most likely to support you beforehand and do your best to guide them through how they can support you.”
Don’t wait for your campaign to go live before you start generating the hype. Invest in building a strong community before launch. We recommend the LaunchBoom Reservation Funnel to build an email list that is 30x more likely to buy.
Both Indiegogo and Kickstarter have a ranking system. Generally, the more popular your campaign is, the higher you climb in the rankings. When your community rallies behind you on launch day, you catapult up in the rankings and get your product in front of even more eyes.
Community building is crucial. But don’t just take Bubba’s word for it. The Give’r Frontier Mitten raised $1,356,709 on Kickstarter and Indiegogo InDemand.
To illustrate what a difference community makes, let’s talk about Simon Lasnier’s crowdfunding journey.
Simon spent years of painstaking work developing Midronome, a synchronization device for electronic musicians. He had an email list of about 400 people, and he generated some buzz among his musician friends. It seemed like the right time to launch.
But pledges fizzled out. The campaign failed. Simon was forced to click “cancel.” What went wrong?
He didn’t invest enough in building his community.
On his second attempt, Simon joined LaunchBoom. He increased his email list by 10x using our reservation funnel system, growing his community from 400 to 4,000. He created a VIP community, a private Facebook group for his highest-quality leads. His VIPs got quicker updates, more announcements, and opportunities to share feedback.
When the new campaign went live, Simon reached his funding goal in just 12 minutes and raised $177,664 total. The product didn’t change; it was still the same Midronome. But community proved to be the ultimate game changer.
Building a community means actively growing a crowdfunding social network. Identify your target audience and choose the social media platforms they frequent the most. For example, if you’re primarily targeting Gen Z, you’ll most likely find your audience on platforms like TikTok or Instagram. On the other hand, if you’re targeting a professional audience, LinkedIn may be a better platform.
Similarly, when you create your VIP community, use the platform that best resonates with your core audience. The two most common platforms we use for VIP communities are Facebook groups and Discord servers. We’ll show you some examples of successful community groups.
Here’s our VIP Facebook group for the Top Shelf Camera Bag.
Notice that we made the group private. People have to request to join. We leaned into the exclusivity — members get the inside scoop on this exciting, new product; they get special discounts and limited-time add-ons; and no one else does.
We had 839 VIP members in our Top Shelf Camera Bag group. This community was hyper-engaged and incredibly powerful — the campaign raised $1,014,422 on Kickstarter.
Some audiences, particularly in the gaming community, are more comfortable with Discord. For our Alpha Clash campaign, they had a VIP Discord of 602 members.
One of the coolest parts about Discord is that you can organize your VIP community by different topics. On the left side, you can see how users can gravitate towards particular aspects of the product and brand.
When you build a strong crowdfunding community, it becomes a long-term asset for your brand. The Alpha Clash server is still super active today. No doubt, it’ll be instrumental for delivering great customer experience for years to come. Check it out for yourself here.
Benefits of Community-Centric Crowdfunding
The benefits of community go way past the crowdfunding campaign. Many creators plan to raise investment capital post-crowdfunding. More and more, investors and retailers are looking for indicators of long-term success.
I spoke with serial crowdfunder and client, Kevin Liang. Beyond raising $1.5 million in crowdfunding revenue across seven products, he raised investment capital multiple times and went on to sell an extremely successful business. He said:
“Investors now know that a large crowdfunding campaign does not equate to post crowdfunding success. More sophisticated investors are now more interested in learning about the fulfillment, defect rate, customer loyalty, etc. from delivering the crowdfunding campaign.”
Greg Appelhof, President and CEO of strategic retail accelerator SPRING, also weighed in:
“When crowdfunding is followed by timely shipment, great product reviews, operational and manufacturing scale, and a roadmap beyond the “Hit” product, then Retail can gain confidence in a company who uses crowdfunding as a product launch strategy.”
Both Kevin and Greg emphasize the importance of a long-term roadmap. Post-campaign, continue tapping into your community. Update them about manufacturing and fulfillment timelines. Invite suggestions and feedback. Build trust by keeping them in the loop on future products and ideas. When you cultivate a loyal, engaged customer base, you tell investors and retailers that your brand is here to stay.
It’s been 138 years since those 160,000 New Yorkers banded together to keep Lady Liberty in their city. Still today, the power of community brings products, businesses, ideas, and dreams to life.
Today, we explored:
- How community solves common crowdfunding challenges and pitfalls
- Case studies on using social media groups for crowdfunding
- Long-term benefits of community crowdfunding
Community in Crowdfunding: Frequently Asked Questions
How is crowdfunding beneficial to the community?
Crowdfunding taps into a unique, thriving community of innovators and early adopters. These people are motivated by the desire to be the first to know about something, and they are willing to take on more risk compared to mass market consumers. When they become your super fans, they pave the way for the general population to interact with and get excited about your product.
Can I use crowdfunding to start a business?
Crowdfunding can be the start of a hugely successful business. Unlike traditional product launches, crowdfunding allows you to generate revenue without inventory and validate market demand before mass manufacturing.
You might think the timing isn’t right, that you’re bad at marketing, or that you don’t know where to start. But you don’t have to do this alone. We have a whole community of crowdfunding experts here at LaunchBoom. To find out if crowdfunding is right for you, talk to an expert today.
How can I use social media for crowdfunding?
Social media is super impactful for growing and engaging with your community. Interact with your social media followers by posting organic content. Use paid ads to increase brand awareness, generate leads for your reservation funnel, and drive traffic to your campaign page. Create a private community group to build relationships with your most loyal customers.