With the recent passage of the JOBS (Jumpstart Our Business Startups) Act, we have had an increased number of questions from people asking how to best get funding from crowdfunding sites such as Kickstarter and IndieGogo. Many of the discussions revolve around the basic question: Which comes first, the prototype or the crowdfunding? Basically, entrepreneurs with good product ideas are wondering if they should go out and seek crowdfunding with their idea sketched onto a sheet of paper or if they should develop a decent prototype to communicate their product idea. The simple answer is that entrepreneurs need a prototype to maximize their changes of getting crowdfunding.
A PROTOTYPE SHOWS YOU ARE WILLING TO PUT SKIN IN THE GAME
If you truly believe in the product idea, you will inevitably put “skin in the game”, meaning that you will use your own money to get as far as possible prior to receiving outside funding. Funders need to know you are committed to the project and spending your own money on a prototype will help convince them of that.
Nothing is better than showing off your product idea with an aesthetically pleasing and functional prototype. One way to keep the prototyping costs as low as possible is to build a minimum viable prototype. A minimum viable prototype is similar to a minimum viable product. The idea behind the minimum viable prototype is to only develop and prototype those important product functions and features that allow you to demonstrate what the product does on your project video. In a minimum viable prototype, there is no need to focus on the corner cases of functionality which will take most of the product development focus. Keep the crowdfunding prototype simple, otherwise you will spend more money than necessary and risk confusing the people who might fund your project.
YOUR PROTOTYPE IS AN EXTENSION OF YOU AND YOUR COMPANY
Interestingly, a prototype is an extension of you, your company, and the values of your company. In other words, the quality of your prototype gives potential funders a first impression of you and your efforts. Give them your best first impression by having a great prototype.
When people see your prototype, they will immediately know if you have thought through only the simple aspects of your product idea or if you have dug deep into the critical aspects of the product such as the user and human interface, the detailed design, the interactions with other products, and the manufacturing or assembly issues. Also, the prototype will show if you have a true innovation, an improvement over an existing product, or a trivial reinvention. Create your prototype so that is demonstrates the important functions of the product and looks good.
Producing prototypes is one of the first challenges of product development. Based on the quality, functionality, and overall look of the prototype, people can easily gauge how prepared you are to take on the challenges ahead. Show them that you are prepared for the future challenges of product qualification, production, and manufacturing scale-up by demonstrating your prototype is the best possible embodiment of your product idea.
DON’T TAKE MONEY UNTIL YOU ARE READY TO EXECUTE
Once you receive funding from the crowdfunding sites, you will be required to fulfill the promises stated in your crowdfunding project. If you have demonstrated a functioning prototype in your project video, you will be best prepared to step into production and manufacturing and will not have taken people’s money without a clear vision for the funding.
Developing products that meet the quality and functionality goals isn’t always easy so work with a respectable engineering and manufacturing team that understands the needs of entrepreneurs. This team should be capable of providing end-to-end product development, from the initial prototype development through production and manufacturing fulfillment.
Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com