Have you ever invested in a crowdfunding launch and been disappointed? Me too. But that doesn’t always have to happen.
In fact, I think the first four crowdfunding items I backed did not amount to anything at all. No shipments. In retrospect, my assessment skills for startups sucked badly at that time. Yours may as well.
There’s scant few ways to properly assess a startup proposal for a product, unless you are somehow on the “inside” and “know things directly”. But that is almost never the case for public crowdfunded launches on Kickstarter or Indiegogo.
While there are some signals you can use to indirectly get at least some clues about the feasibility of a given project, which we’ve listed here in our crowdfunding checklist, there is always much risk.
The main problem is that you don’t have access to the project, and you may not have the skills and knowledge to assess the team’s actual capabilities. And you certainly don’t have the ability to give them some hints as to how to go about things more correctly, should something be amiss.
But what if someone else could?
What if there was a company that would do that?
It turns out there is. FitForLaunch is a new service that crowdfunding companies can contract with to obtain the necessary experience, skills and advice to make the project a lot more successful than if it was to attempt so by itself.
FitForLaunch, created by successful multiple-crowdfunding project entrepreneur Michael Armani of M3D, can work with a company to get them ready for launch.
They’ve identified a number of very common issues encountered by startups:
- The estimated cost of goods sold in comparison to the asking price
- The professionalism, writing tone, and attitude of the founders
- Timing of the launch relative to the demands of the market
- The estimated investment cost in R&D and marketing paid-in
- The size of their customer base and marketing methodology
- How long their price point will stay competitive
- The amount of development cost remaining
- Access to additional sources of funding, such as a big company backing, investment, or pre-orders
These are indeed many of the reasons we see startup companies fail in the 3D print space, and even though these are known issues, they may not be known or properly understood by startup participants.
Usually they are discovered later on in the venture, often when it is far too late to resolve them. And then you have a failure, with a lot of disappointed and sometimes angry backers.
For a fee, FitForLaunch will work with the startup to try to ensure these and other issues are covered off in an attempt to raise the probability of success significantly.
But FitForLaunch will not work with just anybody. They have a stringent assessment process that prospective clients must go through before they agree to work with the company. They insist the company agree to “damages if the project is turns out to be fraudulent.” They vary the fee depending on the risk determined during the assessment, which can be between 3 and 15% of the launch funding.
You might be thinking that they’re cherry picking only the good clients, and in a way you’re right. There are plenty of insane projects on Kickstarter that anyone with a business mind would immediately dismiss as infeasible. But they are still there because the company mistakenly believes it is a real thing. These launches will inevitably fail, but teach their people some valuable life and business lessons.
Meanwhile, FitForLaunch is filtering out those and leaving only the projects that could, with assistance, actually succeed.
For project backers, this is a very good thing. If you were to see that FitForLaunch has been working with a startup, you can have additional assurance that it may actually succeed. If their service becomes more popular it may even become a kind of “certification brand” for startups, something you’d look for before investing.
FitForLaunch is accepting a variety of startup clients that meet these criteria:
- You must produce a game, technology, or designer product that is new
- You must have already received $250,000+ USD in funding on another platform
- You must have demonstrated $30,000 in monthly pre-order sales
- You intend to respond professionally, frequently, and transparently with your project backers
There have been a couple of 3D printer projects pass through FitForLaunch, and perhaps there will be more, as their experience with the technology grows even greater.
While Kickstarter and Indiegogo certainly don’t provide certification of any of their listed projects, it’s good to see there is somewhere else you can go to help understand the viability of unknown projects.