Lessons On Crowdfunding to Start Your New Business

At this year’s Consumer Electronics Show as I walked the floor going booth to booth, when I wasn’t actively picking up valuable insights on how to dominate your industry, I was busy meeting some amazing minds in the tech space.

One such individual, who I ran into by pure happenstance, was Slava Rubin, co-founder of the popular crowdfunding website Indiegogo. Slava was kind enough to chat with me for a few minutes and, in the process, I not only gained a valuable new connection, but some incredible business advice from such an experienced entrepreneur.

Here are some of the big business lessons I learned from him regarding entrepreneurship, bootstrapping, and of course, crowdfunding:

Start By Solving Your Own Problem

When I first asked Slava to tell me about why he founded Indiegogo, he mentioned a mutual frustration that he and his two co-founders encountered themselves. That frustration was rooted in attempting to raise money using the Internet.

At the time, they were using properties like Myspace, Paypal, and email to try and raise money for their idea, but that proved to be extremely difficult. So, they went about fixing their own issue, which is the first big lesson here. As an entrepreneur, one concrete path is identifying a need or problem area in your own life and solving for it, because the chances are good that it’s something that others are struggling with or seeking a solution for as well.

“We thought really naively about creating a marketplace where anybody who wants to raise money for an idea can post the idea, and if people want to fund it, they fund it. If they don’t, they don’t. So, we launched that in January, 2008. Now, people call that crowdfunding.” - Slava Rubin

Consider How You Will Reach Your Audience

Fast forward to today and Indiegogo is a booming online marketplace with well over a billion dollars in projects, ideas, and new businesses being funded.

Success on Indiegogo, however, is far from a foregone conclusion. Before you elect to go the crowdfunding route with your business idea, you need to put some thought into who your audience (or customer base) is and how you can connect with them.

Slava threw out a unique analogy around this. Essentially, he stated that it is best to be precise with your message. You can’t adopt the “octopus approach” of having 8 different marketing messages floating out there like loose tentacles with no clear direction or objective. As the entrepreneur, what are you actually trying to solve?

“For any entrepreneur, I think they should think really big, start really small, and iterate quickly,” he said.

As An Entrepreneur, it’s Okay to Make Mistakes

When I asked Slava what the biggest challenge had been in building his business over the last ten years, he spoke very broadly about Indiegogo’s journey to date:

“In reality, I probably have learned every mistake in the book. We launched in January, 2008. The market crashed in the fall of 2008. We didn’t have enough money to last, but somehow we just kept on bootstrapping with our own money all the way until 2010. Three years without getting paid, we got turned down by 93 VCs, all of them saying it was a bad idea, a terrible market, that we’d already lost, that it would never happen.”

The big takeaway here, for me, is perseverance. Being an entrepreneur requires you to have very thick skin and if you truly believe in your idea, you should move forward with it… even if 93 venture capitalists tell you it’s a bad idea or simple the wrong time. This brings us to our last point.

Embrace Feedback, Positive or Negative

According to Slava, many companies fail not because the founders had a bad idea, but simply because they gave up. If your idea has a certain level of risk associated with it, it’s natural to assume that outside parties are likely going to shy away from it. As the entrepreneur, only you can make the call on whether to double or triple down on those efforts.

And on the opposite side, sometimes you should give up when the signs become all too obvious, like if it’s clear that your target audience or the market has no interest in the product you’re selling. At that point, it is also on you as the entrepreneur to receive that feedback, take it to heart, and decide how to proceed.

“If you really believe in your idea, you just need to be passionate and move forward because no one will tell you that your idea is good except maybe your mom and your brother. Everybody else will say it’s not a good idea. If it has risk, no one’s going to understand except for you. You’re the entrepreneur. You need to be passionate and you need to move forward.”

Watch my full chat with Slava Rubin about crowdfunding, entrepreneurship, and more here:

And as always, if you have any questions or thoughts, text me: (646) 759-1837