- Nov 29, 2023
Brand and Product Marketing via Crowdfunding
Crowdfunding is becoming a familiar word for those who need to fund a project or product. In the case of a startup, it can replace the role of the angel investor to get the initial funding. However the scope of what is being funded, and why, is evolving as startups use this collective effort for brand recognition and marketing a specific project or product.
Two recent examples in the space sector come to mind.
Planetary Resources who have already had their seed money provided by high profile investors started a Kickstarter campaign to raise $1 million for their educational and public outreach (E/PO) efforts. At the time of writing they had 8,700 backers who had pledged $783,569 in just over a week. Why did they start this campaign when they had their funding in place already? The answer is two-fold and it’s brilliant.
Their initial investors were backing the company to do research and development (R&D) and produce an initial product. However it did not include funds for a sophisticated educational and public outreach effort. This is where the Kickstarter campaign comes in.
The campaign dubbed “ARKYD: A Space Telescope for Everyone”, has four goals:
– To give students access to space capabilities
– To support important research and discovery
– To build excitement about space and all of its potential
– To give you a say
The funds are not meant to be used for R&D but rather to support and the E/PO effort. If the campaign is successful and if the program goes forward this is a huge win for students and researchers and will no doubt inspire many young school kids.
But not only does the funding enable an E/PO program, the campaign itself and the resulting E/PO effort will just further promote the brand that is Planetary Resources. So this is a brilliant use of crowdfunding.
The other example is from another a fledging “space” company, Scanadu, which is based out of the NASA Ames Research Park and is born from the Singularity University.
Scanadu is developing a small portable medical scanner called the Scanadu Scout and is being marketed as the first Medical Tricorder. The scanner itself has several sensors designed to read your vital signs and send them wirelessly to your smartphone in a few seconds, any time, anywhere.
Last year, the 2 1/2 year old company raised $2 million in January from private investors to get the company initially funded. Last month they started an Indiegogo campaign to raise $100,000. Why start this campaign? And why such a small amount?
When contacted, Sam Lounis De Brouwer, a company representative responded that “the crowd funding is not to finance the company structurally, but to produce the devices reserved by the users. It is not at all linked with the funds the company is raising from accredited investors.”
So once again we have a case where a company isn’t starting a campaign to initially fund the company but for a specific marketing goal. And the campaign? With 15 days left, they have raised $774,733, well beyond their initial goal.
These two examples for crowdfunding show the evolving nature of what can be funded collectively when a compelling case is made.