MilkMade Ice Cream: Running a Successful Crowdfunding Campaign Harvard Case Solution & Analysis

MilkMade Ice Cream: Running a Successful Crowdfunding Campaign Case Solution

Introduction:

Diana Hardeman launched Milk Made Ice Cream in 2009. The business started with the small batches of super-premium ice cream made from the locally sourced fresh ingredients. Diana started the business due to the increasing dissatisfaction with the ice cream available in her neighborhood as it contained corn syrup, milk powder, artificial flavors and preservatives due to which the opportunity arises for the niche in the market for the frozen treats made from the organic, fresh, and seasonal ingredients.
Due to the small startup, the strategy that Diana chose was to provide the residents of Manhattan and Brooklyn two pints of ice cream per month on the subscription basis with the price of $30. This strategy helped the business in not incurring any capital cost up front due to the advanced payment of subscription through which the company bought the ingredients for the month’s ice cream.
Diana launched the Milk Made on the social media platform by making the page of her company on Facebook, a Tumblr blog, Instagram and Twitter to keep the current subscribers and those on waiting list up to date regarding new flavors and expansion plans. The main marketing strategy of Milk Made has been the social media which it has relied for many years.

Hardeman’s Hybrid Approach to Funding:

Crowdfunding is the use of small amounts of capital from the large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of friends, family, colleagues and other people who are interested in the services offered by the company and want to see them continued through social medial websites. Crowdfunding has the potential to increase a company by expanding the pool of investors from whom the fund can be raised beyond the traditional circle of owners, relatives and venture capitalists.

There are two crowdfunding models that exist; the first one is the donation- based funding which is also the reason behind the birth of crowdfunding and the second one and more recent model investment crowdfunding where businesses seeking capital sell ownership stakes online in the form of equity and debt. Crowdfunding has been an area of exponential growth over the last few years. The industry has helped businesses and other charities in raising $2.7 billion in 2012 with more than 1 million individual campaigns globally and almost $5 billion in the year 2013.

There are many crowdfunding websites that are created to pursue the type of funding with Kickstarter leading the line;whereas other websites include Indiegogo, Crowd funder . com, RocketHub, Crowdrise, etc.
The approach used by MilkMade to raise the funds for the ice cream machine through the crowdfunding has been effective. There are several reasons which show the strategy as an optimal strategy for small business with good social media network,and not only to raise the funds but also to market the business.
The marketing strategy of the company as discussed earlier has been the social media platforms where MilkMade has made the pages and actively managed the accounts. MilkMade has number of followers on the social media websites and the crowdfunding sites have been synchronized with these platforms which added the advantage of raising the money through the source. Even though the money raised from this strategy will not be enough to fully support the growth of the company however, it will give the vote of confidence to the business in raising the future funds through other sources.
The campaign has three main goals. The first one is to make a splash and publicly engage the customers, fans and friends and family and to let them know about the growth of the business as well as to make them part of the growth. The second goal was to use it as a marketing campaign that does not need money but instead provides funds and to show the future investors that the company has the confidence of its customers and potential customers who want the company to grow, which will make it possible to raise the money easy in future...................

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