Crowdfunding why your one hit wonder is a waste of time
Published in My Entrepreneur Magazine, September 2017 by Dale Gillham
We are seeing a trend of new businesses, start-ups and millennial-entrepreneurs kick-starting their ventures through crowdfunding. And, while there is nothing wrong with funding their businesses and products this way, it is all too common for them to lack the foundation for building a business and focus too much on launching their product or services.
This results in the ‘one-hit-wonder’ scenario for those that have successful funding campaigns and perhaps launch their invention, tech gadget or service with a big bang, only to find that to sustain a business in the market over time takes more than just a quick-funded great new product or service.
These businesses really operate on too much faith in that ‘one product’, with little to no thought in terms of brand vision, scaling, product groups or creating a real business with long-term vision. This is why although many crowdfunded campaigns are ‘successful’, very few develop into real ways of making a living as a result.
“Plenty of ideas have gotten off the ground, but far fewer brands or businesses have stood the test of time,” says Dale Gilham.
“Sure, it’s a great way to fund a venture, but without putting thought into business longevity and how to create sustained presence in the market and by focussing on the 15 minutes of fame of a quickly launched product or concept, you end up spinning your wheels and wasting time that could be spent creating a real business,” he says.
“Without a long-term plan and having designed their business to withstand the test of time in the marketplace, even the best funded new high-flier is destined to fail. As the saying goes, fail to plan and you plan to fail.”
One just needs to look at the statistics of survival of small business (or lack thereof) to realise that it takes more than just a bright idea. While many an aspiring entrepreneur might envision becoming the industry disruptor the likes of Uber or Netflix, the truth remains, most don’t even come close.
“Why we see such great numbers of new businesses fail is not necessarily the funding or that they are bad ideas, but the lack of preparation, research and planning. In a way, it is much like many people approach retirement planning by simply heading into that general direction without much of a plan or know-how on how to achieve where they want to get,” Gilham says.
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