Do you know about a new way to get money for that idea that has always been brewing in the back of your thoughts? It’s called crowdfunding and has proven a successful way to get all sorts of projects up and running. Everything from board games to movies has been started with crowdfunding. But what about software?
If you are a crafty software developer, you may have dreams of turning out the next Flappy Bird or Candy Crush. That takes time. Crowdfunding might be a way to get the capital you need to get up and running. “For software startups it just takes a bit more finesse, a physical product to accompany and complement your coding prowess,” wrote Matt Ward in Inc.
A History of Failure
While many projects have been successfully funded, it seems software has a bad track record when it comes to crowdfunding. The public doesn’t seem as willing to part with their hard earned cash as much for a software project as they do for others. Why is this?
As a developer, you know how difficult it is to come up with a good software product. The problem is that users do not. While another project can point to needing things like materials, production space, equipment and catered lunches, software is seen as a nebulous thing that can be churned out in your basement on the weekends. Many people just don’t see a software developer as needing any startup money. The software will just appear after enough work has been put into it.
Get the Word Out
One thing that can help with crowdfunding a software project is to raise awareness on what you are doing. Interest forums, social media and your own website can all be ways to raise awareness on what you are planning to do.
Make sure that as you spread the word about your project you spell out just what you need the money for and how it is going to be used. Maybe you need some specific hardware or software development package to get your development done correctly. Sometimes all you need is to spend all the time you can to get your project over that last hurdle. Whatever it is, a clear explanation can go a long way.
Use Crowdfunding as a Barometer for Interest
Crowdfunding can also be a great way to see how much interest there is in your project. If after spending time setting up the site and getting the word out yet there just isn’t much response, you might want to reconsider your idea or modify it slightly.
Include Some Hardware
Smart Watches, 3D Goggles and Video Game platforms have all started with crowdfunding. Maybe what you need to up the interest level is to include a gadget that your software can run on. For someone working on IoT, the Raspberry Pi 3 might be just the thing. It should be a great tool for smart home automation.
If you have the know-how to get this done, go for it; if not, maybe there is someone out there that you can partner up with to help you get the job done.
Games Have Better Chance at Success
But can a software project really succeed through crowdfunding? A few people who either have succeeded in crowdfunding or at least invested in crowdfunding projects say that Kickstarter and Indiegogo are geared toward end users. That makes games attractive to these end user/investors and seems to limit viability to B2C, rather than B2B.
“For an infant Google to raise money on Kickstarter, it’d have to provide rewards to businesses (eg advertising packages) – but Kickstarter is not a B2B platform by any stretch of the imagination,” wrote Chern Ann Ng, who has $20 million funded on Kickstarter.
Maybe that will be the saving grace for a developer working full time at a B2B company and working on this project on the side. Creating software for the B2B market might be considered competitive and a violation of the terms of your employment. But something geared for consumers just might be OK.
Know What Type of Crowdfunding Works Best
Matt Ward of Smashing Magazine wrote an extensive article on the crowdfunding ecosystem as it relates to software apps. He said there are “three very different approaches here: donations, equity and rewards-based crowdfunding — each obviously with pros and cons.”
Charitable crowdfunding has become popular because your backers get to lend support to a cause they admire. Equity crowdfunding gives your backers a bit of the business. Or you might choose a rewards-based method, pre-selling your software to get your funding.
One thing Ward says you must not do is to cater to both users and funding. Focus on one or the other. Remember that most crowdfunding efforts fail. You have a shot at raising enough funds to developer your software, or at gaining enough interest that you will be successful once it is released.
Make sure you read Ward’s article for a full grounding in the various methods and types of campaigns.
Business Intelligence Software from Izenda
Izenda didn’t start out with crowdfunding, and it was founded seven years before Kickstarter began operations in 2009. Izenda offers business intelligence solutions for companies of all sizes.