At an Emerging Marketers Victoria event recently, the co-founder of Australian crowdfunding platform Pozible, Rick Chenn, took to the stage to talk about this new trend penetrating the Australian market.
Pozible was developed to help people raise funds, realise their aspirations and make great things possible by turning to social media and the local community to help fund it. Deemed “backers,” rewards are offered for every price point people are willing to commit to, and those who invest are given frequent updates about how the service or product is developing. Each project has a target amount that will make the project feasible, and in the cases where this target amount is not reached, backers will not be charged. Should it succeed, legal limitations prevent crowdfunding campaigns from offering financial returns as rewards, so should the project be highly profitable, backers will not see any of this, and they know it.
I am no stranger to crowdfunding as it helped bring one of my favourite television shows, “Veronica Mars,” back to life after the studio refused to keep the universe going, i.e., the show was cancelled due to low ratings and they, probably rightly so, didn’t think they would make any money on a film. Turning to Kickstarter, creator Rob Thomas asked the fans for $2 million. How much did fans want to see a movie of “Veronica Mars?” $5 million worth. This was in April. The film is now in post production and scheduled for release in January 2014.
In a similar vein for Pozible, its first big success story came in the form of a zombie role playing game called “Patient 0” – a fully immersive live action real life, multiplayer, first person shooter, role-playing game. They wanted $10,000. They got almost $250,000.
For the cynics among us, and even for just the people who aren’t geeks like me, one would look at these two examples and think the world deserves everything it gets. A film continuing the cancelled story of a teen detective? A zombie shooting role playing game? This is what people will shell out money for? When was the last time a charity or cause overshot its fundraising target by THREE MILLION DOLLARS?
Maybe it’s not so much the projects – it’s the model. Here are some things crowdfunding taps into that most charity and non-profit fundraising efforts don’t:
THERE IS A TIME LIMIT
“To achieve great things, two things are needed: a plan, and not quite enough time” – Leonard Bernstein
Crowdfunding creates a sense or urgency because if they can’t raise the money within the 30 day or 50 day deadline, they don’t receive anything and the project doesn’t happen. From a backer perspective this means that if they want to support this project then they can’t wait until next year, or next pay day, they have to make a decision, they can’t forget about it and they have to act on it right then and there.
THERE IS TRANSPARENCY
A tally keeps the public updated with exactly the amount that has been raised to date, how much the project aims to raise, and exactly what they’re going to spend the money on. While the good old telethon is good for keeping a tally, exactly how this money is spent and what it goes towards is often unclear when it comes to fundraising.
THERE ARE REWARDS
The more creative the better. While I settled for a T-Shirt, a poster, a shooting script, a DVD of the ‘Making of’ documentary and a digital version of the film once it was released for Veronica Mars (the $100 reward), concepts for these can be as creative as getting a goat named after you, your initials tattooed on the creators arm, having your life told in Infographic form, and receiving a hand-written postcard composed while the creators are sober, or for an extra dollar, a hand-written postcard written while the creators are drunk (true story). While these may not be things you know you NEED, they are definitely things you WANT once you read about them.
THERE ARE UPDATES
Possibly the most important factor that often gets forgotten about once fundraisers have the money they need is letting people know where the money went and what has happened because of the donation (with some exceptions including charity: water). While yes, you got the donation, and nothing can change that, donors have no idea if they will be updated, or that the money will be used for what they think it will be used for, which can affect future fundraising efforts. Here the creators take the backers on a journey of bringing their vision to life, and so not only do they know where there money is going, but they are invested in the story and want to see it succeed, if only for bragging rights.
I know I will be sitting in a theatre watching “Veronica Mars: The Movie” come release day, being that annoying person who looks at everyone and says “You know, I helped make this film happen.”