This is the fourth post in our 30 Day Ask Clay Crowdfunding Q&A.
I’m answering a new question every day in June.
Submit your question by going to CrowdfundingHacks.com/AskClay, where you can see all of the questions and all of my answers.
Hey everyone…this is Clay Hebert from CrowdfundingHacks.com…and today’s question is…
Why do some terrible ideas get funded while some great ideas fail?
This is a great question. As a creator who has either had a failed project or someone thinking about doing a campaign, it can be frustrating to see what you perceive as “lesser” ideas succeeding and what you perceive as “great ideas” fail to hit their funding goal.
The answer can be found in the following statement:
“Crowdfunding is not a meritocracy, it’s a marketocracy.”
Yes, marketocracy is a word that I made up, but that’s OK. People make up words all the time. I highly encourage you to make up some words of your own.
I’ll explain what it means.
The Merriam-Webster definition of a meritocracy is:
a system in which the talented are chosen and moved ahead on the basis of their achievement
So if crowdfunding was a meritocracy, the “best” ideas would raise the most money and the “worst” ideas would fail.
The problem is, the concept of a “good idea” is very subjective.
Let’s look at The Coolest Cooler.
To some people, a cooler that has a blender, a solar panel and an iPhone charger is ridiculous. To others, it’s literally, the “Coolest” cooler they’ve ever seen.
The Coolest Cooler campaign raised over $13.2 MILLION on Kickstarter, but what most people don’t know is, the first time out, The Coolest Cooler had a funding goal of $125,000 and they missed their goal. They only raised $102,000 and because they missed their goal, they got nothing. Zero. Zilch.
The second time out, there were a few minor changes to the cooler, but it was essentially the same thing! So what changed?
Their marketing changed.
The second time out, Ryan Grepper and his team completely revamped how they marketed and promoted the campaign.
They did the pre-launch marketing right and blew past their funding goal in a matter of minutes. Then they continued to promote the campaign effectively, targeting the people who they knew would be interested.
Same idea. Same basic product.
Completely different marketing. Completely different outcome.
Now even great marketing can’t save a horrible idea that nobody wants. It’s important to have a great product, but in crowdfunding, it’s about finding and reaching the people that care desperately about your idea. And then ignoring everyone else.
So to recap…
Crowdfunding is not a meritocracy, it’s a marketocracy.
It isn’t just the “arbitrary” quality of your idea (which is different to everyone), it’s also about the marketing…finding the small group of people who love your idea and building permission to market your campaign to them.
So with a nod to Merriam-Webster, if we were to define a marketocracy, it would be
a system in which campaigns succeed due to the combination of a great idea (to certain people) and the creator’s ability to find and market to those people (and ignore everyone else)
There…we didn’t just make up a word, we defined it.
As always, you can submit your question or see all of the crowdfunding questions and my answers at http://crowdfundinghacks.com/AskClay