Crowd-funding is a current buzzword, though often referred to as ‘Kickstarter’, as in “How should we fund the Road Decongestion Lab?” “You should use Kickstarter.”
It was a mystery to me how these types of funding systems work, and when I had the opportunity to go to the IRF Congress, but no money for the trip, it seemed like a good idea to find out.
The main questions for me were: who funds these things, and how are those people reached? How do we generate interest? Is there a whole crowd of people out there looking for new ideas to fund?
In New Zealand our major Telecoms provider is called ‘Spark’ and they have a foundation called ‘Spark Foundation’. (They used to be called Telecom, and it was the Telecom Foundation. They have recently done a pretty successful rebrand, but that is a different story). The reason for mentioning Spark Foundation is that they fund a website called ‘Give a Little‘ that is for crowd-funding, and they charge no fees. They also fund a website called ‘Spark My Potential‘ that is invitation-only for projects they think should get a boost.
So my experience is this:
- I made a Give a Little page for Disappearing Traffic, and sent out a couple of emails asking friends for support.
- I got an email from Spark My Potential (SMP) inviting me to switch the page to SMP, and they would provide:
- A coach to help me get it set up;
- Matching funding (subject to final approval depending on how hard I worked on it), but an ‘all or nothing’ campaign that relied on the crowd (with matching) funding the full target amount (unlike Give a Little, which took straight donations);
- A guide that I could use to have a greater chance at success.
- Of course I agreed; a conference call was set up with the coach; and I was sent the guides.
- I did what the coach suggested: mainly making the video (there was some back-and-forth work on the script); thinking about what to offer as a ‘supporters journey’, creating lists of all my contacts (depending on the nature of the relationship, people were put on different lists) to send asking for support; and using the guide to create emails that made the right ask; and planning a campaign of activity with predesigned updates and further communications for once the campaign was underway. I got a fantastic result, achieving 170% of the target, including over $700 of matched funding from Spark Foundation, and over 60 backers.
- Here is what I learned:
- The main thing is that the crowd is ‘my crowd’. The vast majority of people who supported me (about 98%) were people whom I emailed, so had an existing relationship with. There was very little ‘snowball effect’. This might be because we met the target so quickly (it took 12 hours) that any one who happened on the campaign would see it was fully funded and would conclude that it did not need their support. Also, we didn’t have time to do any of the broader marketing actions that we had in mind, because the target was met so quickly. But I think this is also likely true for other projects – that it is the people who already know about the matter at hand who are likely to support it.
- My network is very generous. Even though I suggested small contributions many people donated larger amounts. This makes me feel very loved. I was very surprised and humbled by the response.
- The focus of the preparation for the first couple of weeks was the video, but the main effort that delivered the result (I think) was the preparation of the email lists, and the careful wording of the emails.
- The crowd-funding system is a very streamlined way for people to show support, both with money and with comments.
- Here is what I am left wanting to learn:
- How do we get the snowball effect?
- Will the broader community of potential funders engage with this particular issue and support it?
In the longer run, to keep our work independent and to keep moving forward, crowd-funding seems like a very viable approach. But there is a big difference between getting a single trip to an event funded, and getting an ongoing program of work funded. We would need to get a larger number of people on-board, which suggests that we need to engage the snowball effect: or access much larger existing networks.