What are the typical characteristics of a backer in crowdfunding?
A backer is a person who backs a project by pledging for rewards via a crowdfunding platform, such as Kickstarter. This type of crowdfunding is also known as rewards-based crowdfunding.
- Backers in crowdfunding are early adopters and innovators. Backers take risks, have financial liquidity and participate socially.
- Crowdfunding enables backers to realise their goals of owning the latest gadgets, supporting entrepreneurs, and being part of the journey to fulfilling dreams.
Roger’s Bell Curve
A backer can be described by the first two categories on Roger’s Bell curve.
This is a curve that describes the Innovation Adoption Lifecycle and it is typically used in Marketing to understand and describe consumers and their reaction and interaction with products. For example those consumers who must have a product as soon as possible compared to those who will wait for the price to drop. The six categories on this curve are:
- innovators: take risks, have financial liquidity, highly social compared to other categories;
- early adopters: highest degree of opinion leadership among the other adopter categories, financial liquidity, more discrete in adoption choices than innovator;
- early majority: slower in the adoption process compared to innovators and early adopters;
- late majority: adopt an innovation after the average member of the society;
- laggards: last to adopt an innovation;
- leapfroggers: only pick up on innovation with later versions.
Backers are early adopters and innovators
There is a give-and-take relationship between an early adopter and a content creator. In return for early access to the latest product or gadget at favourable prices, the early adopter will support the content creator both financially and emotionally.
A backer can be described as an innovator and early adopter because a backer:
- will pay a premium to be one of the first to receive a product or service or to advance a charitable cause, be part of the beta testing for a product, be a market disrupter, and to increase their status (perceived or real) in their peer group;
- act a market disrupter in seeking innovation and change as relating to targeted products and services by disrupting the commercial business model ;
- has an appetite for risk, and can afford the risk;
- understands the entrepreneurial mindset and is an enabler for entrepreneurs;
- has a desire to promote innovation, disrupt the status quo in marketplaces and business models, and enable change;
- has a clear understanding of the risk/reward profile of any crowdfunding transaction.
A backer’s goals that get fulfilled via participating in crowdfunding
In general, a backer is seeking to fulfill three goals, namely to be:
- one of the first to get the product or service or receive a limited edition or advance a cause;
- part of the journey of starting and running a business or non-profit;
- an enabler for others’ dreams.
Because backers are seeking fulfillment of these goals, and have the money to back projects, backers hold bargaining power in a transaction. And this bargaining power is not only evident in the crowdfunding process but also throughout the product or service’s lifecycle. If the product or service becomes commercially viable, the backer’s crowdfunding experience may become part of the product’s PR and reviews. Backers are more active socially and online, with a higher degree of opinion leadership. Accordingly, other consumers follow their opinions and purchases.
If you think you are ready to be a backer, use this questionnaire as a quick guide to help you determine if you are actually ready.