Synopsis: Too many startups & growing companies try to go to the crowd before they have actually built their crowd. This article introduces the concept of crowdbuilding, as an essential precursor to equity crowdfunding.
Crowdbuilding Must Come Before Crowdfunding
Most startups have it back-to-front.
First, they go to equity crowdfunding. Their hope is that they can use it to build their crowd.
In fact, would-be-crowdfunders should do things in exactly the opposite order.
Crowdbuilding must come first, before equity crowdfunding.
That isn’t a popular message – startups would much prefer to hear that equity crowdfunding is going to do all the hard work of building their crowd for them. They want to show up with their business idea, and have the crowd cluster around them without too much effort.
It doesn’t work like that.
Yes, equity crowdfunding can help to build a crowd, by exposing your company to a new audience… but that only happens if you have already got a decently-sized crowd in the first place.
Investors take the lead from other investors. Before the masses will invest in your company, they need to see your existing traction with your existing crowd.
Why would people who don’t know you invest in your company, if they can’t see the support of those who do know your company well?
This article is about the sort of crowdbuilding that’s necessary if equity crowdfunding is going to be an option. Once your crowd has been built, everything becomes easier. But without building a crowd first, none of the crowdfunding promotion tactics are going to work.
Ask: Who Is Your Crowd?
Before you can attract a crowd, you need to know who that crowd is.
What sort of person are you trying to attract?
The answer to this question cannot be “everyone”. Not all members of your crowd are alike. Some people in the orbit of your business are merely customers.
Customers are great, of course – every business needs customers! You should never take your customers for granted. But the customer/provider relationship is merely transactional. They’ll buy what you’re selling, but if a better offer comes along, they’ll quickly make the switch away.
The phrase “mission statement” has unfortunately fallen into the realm of MBA-style management jargon, but something like this really does help gain clarity over what your company is all about, and who is going to be attracted by it.
Startups are frequently advised to have a clear customer acquisition strategy. It is rarer, but perhaps even more important, to also have a separate loyal follower acquisition strategy.
Loyal followers are those who are in love with your mission statement. And, they’re the ones you’re going to be counting on when it comes to equity crowdfunding. In the crucial first few days of your (future) equity crowdfunding campaign, they’re the ones who are most likely to tip their invest dollars in, and provide leadership to everyone else.
So, what do loyal followers look like for you?
What sort of person is going to be so enraptured by your project, to the point that they’re going to go around telling their friends about it?
- Where do they live?
- How old are they?
- What sort of music do they listen to?
- What is their income level?
- What are their hopes, dreams, and aspirations?
Don’t just take this as a rhetorical question. Take five minutes right now, and write the answers down.
Go Where Those People Are, And Gain Their Attention
Once you know about what your ideal crowd looks like, the next stage is to go out and find them.
This means showing up where they are, and gaining their attention somehow.
The specific steps to gain the attention of your loyal-followers-in-waiting are different in every case.
- If you sell health bars and realize that your ideal crowd are mothers in their mid-30’s who drive SUVs and go to yoga class, you might want to gain their attention by handing out free samples of your product outside the gym.
- If you sell high-performance sports tyres and realize your ideal crowd are young men in their early 20’s who like to show off their cars in front of their friends, you might want to get the endorsement of an influencer whose opinion they respect.
- If you sell a piece of software that makes a teacher’s job easier, you might want to give a live demonstration in front of an auditorium of 1,000 teachers at their annual conference – making sure that a decent percentage of these teachers are going to be tech-savvy enough to be open to adopting your solution.
Like it or not, attention is the currency of the economy. Crowdbuilding means gaining attention, and directing it to your product or service.
This exercise is much more successful when you have first taken the time to figure out who your ideal crowd is. It means you will be telling them about something they are already likely to be interested in, rather then “selling” them a product they do not actually want.
Be A Real Person
We can all agree that the world is getting faster, more obsessed by clicks, impressions and “engagements” (as measured by social media likes, comments and shares).
It all adds up to a more superficial, less human world.
Ever been on one of those websites where it is literally impossible to contact an actual human being? No matter what you do, you just get redirected to a different part of the Frequently Asked Questions. On a scale of 1-to-10 for being frustrating, this is about an 11.
We have greater technological connectivity than ever, and yet we have never felt so alone.
Want to know how to stand out? To really stand out?
Don’t be like that.
Be authentic instead. Be easy to contact. When someone in your crowd emails you, take the time to reply. When someone in your crowd calls you, take the time to answer.
This kind of authenticity isn’t as “scalable”, but at least it works. People hate feeling like numbers in a spreadsheet.
Remember that behind every email address, every order, and every customer enquiry is a real person. Talk to them on that level, and you’ll succeed with crowdbuilding. Then, when it comes time for equity crowdfunding, you’ll already have an army loyal followers on your side.