The health industry has seen its share of mind-blowing crowdfunding campaigns — Pebble and the Scanadu Scout, for example. But the reality is that most campaigns don’t fare quite as well.
According to Kickstarter’s stats, only 44 percent of campaigns on the platform reach their goal, and one in 10 projects never gets a single pledge. So what does it mean when a campaign doesn’t hit its mark?
“If a product is not getting traction it is a high risk and probably does not have value in the market, or is not getting in front of the right people,” said Jeff Borenstein, the chief marketing officer at MedStartr, which operates a crowdfunding platform specifically for healthcare.
That whole “not getting in front of the right people” thing is part of why crowdfunding is an especially challenging endeavor for complex medical products.
Vaclav Kirsner, a former senior research scientist in the pharmaceutical industry and three-time entrepreneur, has spent years developing biosensing technology designed to help women conceive naturally. His latest company, bioZhena, took to Indiegogo last month to raise $5,000 for an at-home fertility monitoring device designed to let women know the three-day window in which conception is most likely to occur.
The idea, Kirsner said, was that those funds would allow the company to retain a money-finder who could lock up additional investments. But in its first month, the campaign just hasn’t taken off.
“The problem was we were not advertising to the intended audience,” Kirsner said. “I think if we could reach that audience of infertile women, it might work.”
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Now he’s wondering how that will affect potential investors or partners who might be watching the campaign to gauge consumer interest in the product. “This is the very disappointing thing because of course it can not be proof of consumer interest because we are not reaching the consumers,” he said.
Fazila Seker, the director of technology and venture development at commercialization agency MaRS Innovation, said that one of the trickiest things about the crowdfunding industry is the notion that these platforms have an established crowd that’s lurking around looking for the next best thing.
“You can’t rely entirely on that,” she said. “You need to go out there and do your research and create your own following.”
Seker helped run an Indiegogo campaign last winter for WaveCheck, a clinical technique for monitoring chemotherapy in breast tumors developed at Sunnybrook Health Sciences Centre and Ryerson University, which was looking for $97,000 to get a clinical trial site up and running.
The campaign didn’t hit its fundraising mark; it made it a bit more than halfway to the goal. But Elizabeth Monier-Williams, who runs marketing and communications for MaRS and was also involved with the campaign, said the momentum, dialogue and potential partnerships sparked by the campaign make up for that.
Although they said they didn’t have the ideal amount of time to prepare for the campaign, the pair attributed some of the campaign’s success to a certain emotional appeal that’s inherent in what WaveCheck is doing. The technique was invented by a physician to monitor whether chemotherapy is actually working on a breast cancer patient’s tumor, and some of the donor rewards involved funding patients’ participation in a clinical trial.
“We see a lot of technologies; I think it’s about one in 100 that would be eligible for crowdfunding,” Monier-Williams said.
There are plenty of other examples that show that not reaching a crowdfunding goal doesn’t necessarily mean the project isn’t a good one. In a post on CrowdCrux, tech entrepreneur Rudi Beijnen details how he and his business partner successfully relaunched their failed Kickstarter campaign for a mobile-connected wearable device.
Common advice from entrepreneurs who have had success seems to underscore the importance of a few key points: telling a compelling story, setting a realistic goal and bringing at least some of the crowd with you.
“What’s obvious now is there’s a lot of legwork involved in figuring out who the audience is and what’s the best way to reach them,” Seker said. “Social media and blog posts is one way. Another way is word-of-mouth and actually going where the audience congregates, like online discussion forums and Reddit, and being part of that conversation naturally.”
