When I was running WeDidThis, some of the most useful meetings we had were the slightly cautious chats with our competitors. We were lucky in that we were one of a number of UK crowdfunding sites launching through 2010/11, so there were plenty of opportunities to share our experiences and check each others’ progress without too much risk of industrial espionage. And when we got together, there was one assertion we always agreed on – by the time that US mega-platform Kickstarter launched in the UK, we would have needed to establish a viable business model and strong supporter networks, or face becoming Friendster to their Facebook.
Well, with Kickstarter’s announcement last month that it’s planning to launch in the UK, that day is fast approaching.There’s no question that their well-funded (rumour has it, by Amazon) operation, killer PR machine, and payments processing back end will have an impact – as their growth story shows, they’ve got this crowdfunding thing licked. However, all is not lost, and here’s why I think that:-
- The nascent crowd of UK-based platforms – many of whom are developing a distinct and different approach to crowdfunding – need not pack up and go home just yet.
- Even with Kickstarter taking up residence here, there is a lot more that our public organisations (I’m thinking particularly of groups like NESTA, Big Lottery, and the Arts Council) can do to help creatives to seize the moment and make crowdfunding an indelible part of the way creative and social projects happen.
Made in the UK: our ‘home’ crowd
Here’s Hugh (Fearnley-Whittingstall): the Bicycle academy receive their cheque for their successful crowdfunded campaign on PeopleFund, from its founder.
As the picture above shows, there have been some notable successes from the UK platforms launching in the last couple of years. Looking ahead, it’s really encouraging to see the way that platforms are seeking to grow and assert distinct identities from one another:-
- Some are building partnerships. Mike Troughton’s done a great job of building up WeFund over the last year, trousering a website of the year award, new investment and recently launching a snappy new design. WeFund’s Eureka moment seemed to come last summer with partnership with the Edinburgh Fringe, which they’re repeating this year – and their new equity crowdfunding offer looks pretty interesting. In my humble opinion, WeFund stand the best chance of being in for the long haul. Good luck Mike.
- In a similar fashion, FundIt have successfully used their access to the Irish arts scene (they are owned by the Irish equivalent of Arts &Business) to the bone. Both will face challenges in broadening the reach of their platforms, and it’ll be interesting to see if either follow Greg Vincent’s platform Sponsume’s route of going pan-European (getting into competition with other Euro platforms like Ulule). PeopleFund is not quite in the same league, size-wise, but have had some notable big successes already (the Hackney bike academy above, and Young Rewired State) and have a great opportunity to cross-sell to their massive and sympathetic River Cottage fanbase. Intriguingly, their strategy seems to be based around building up a collective of sites under an ‘umbrella’ brand, including mine (WeDidThis), Unbound, and an interesting partnership with Plymouth University to help more South West startups to grow.
- Trying other pricing models – Unbound seem to have hit a sweet spot by pitching their pricing between the frankly exorbitant ‘normal’ publishing deal and the mega-generous 5% cut that most platforms demand. This ability to self-sustain on a much lower success rate should stand them in good stead.
- Not-quite-crowdfunding – I’ve blogged about Crowdcube’s equity-based model in my last post, but it’s worth adding to that Buzzbnk’s option of making loans as well as donations, and SpaceHive’s place-based matched funding leading to much bigger projects getting funding, and there are some great examples out there of platforms promoting a different sort of crowdfunding alongside other offers to their users. What they lose in the ‘purity’ of the crowd (e.g. a donor giving £10 on SpaceHive towards a £120k project is a much smaller proportionate part of the crowd compared to most Kickstarter projects), they could make up for in diversity of their sources of revenue.
- Kickstarter-clones – Sites like Pleasefund.us and Crowdfunder have done a great job of getting the word out (check out PleaseFundUs’s social media stats and you’ll see what I mean), and have clocked some notable successes. They’ll have to fight hard to be heard once Kickstarter come to town though- and it’ll be interesting to see if this sort of platform stick with their current approach or evolve their model to provide something different.
Of course, as with any market place there are a players who haven’t yet made their mark (for example, arts funding platform AngelShares is still a bit short of projects, and Scottish social site SoLoco never quite got going) but generally speaking, Kickstarter arriving here need not be the death knell for the UK’s home-grown sites. Though it may not feel it for the platforms, and the UK is not short of creatives wanting to take their great ideas to a wider audience.
Looking across existing platforms, there are also some pretty interesting ideas for pushing the crowdfunding model further:-
- Launchpad (Rockethub) – RocketHub have started working with high-profile brands (e.g. Gibson guitars) to create unique opportunities for creatives to gain new skills and publicise their work. As I understand it, there is preferential access for individuals who have crowdfunded with RocketHub – and teaming up with exciting brands to offer further development opportunities to successful crowdfunders (who, remember, have already taken the first steps towards cultivating a fanbase) could be a really strong incentive to get people into crowdfunding and encouraging them to work hard to make their campaign succeed.
- Curated areas/ partnerships (Kickstarter and others) – As I’ve already mentioned with WeFund’s work with Edinburgh Fringe, I reckon this is a really fertile area for growth. There are so many possible themes that platforms could go for – for example, Rockethub are going for something a bit different with their SciFund; while the success of ‘curated communities’ depend heavily on the energy of the curator (as we found when we tried this in Derby and Brighton, with mixed results), they offer an excellent opportunity to target specified communities of interest, and could be pretty exciting.
- Sponsored surveys (Spot.Us) – Journalism crowdfunder Spot.Us [LINK] used to offer funding ‘credits’ that users could earn in return for taking part in sponsored surveys, which could be put towards projects on Spot.Us. This was a great way of putting corporate sponsorship in the hands of site users, while at the same time delivering meaningful interaction between user and sponsors that met the participating sponsors/ brands’ objectives. It’d be great to see more of this.
- Rewarding repeat funders – Repeat donations are the lifeblood of any successful platform, and a vital challenge for any platform is to prompt users to visit new projects and make repeated donations. RocketHub are doing this by awarding funders bronze, silver and gold badges (displayed on each funder’s profile) in return for repeat donations and interactions. Very Olympic indeed.
- Meetups/ events – we found through our ‘arts club’ events that funders valued the opportunity to meet the creatives and learn more about crowdfunding, increasing their loyalty to the platform and projects. Meetup could be an interesting tool to do this, particularly with potential project leaders – but there are many other ways to try offline interaction with funders and projects, making crowdfunding feel a bit more ‘real’.
What do you reckon? I’d be interested in other suggestions to make our existing platforms continue to grow, as well as your view on what will be the impact of Kickstarter’s arrival. Comment below or post links to your blog, and let’s get a conversation going.
Crowdfunding for everyone: what ‘big’ funders can do
Adrian Hon’s excellent article earlier this year talked about current slightly awkward juxtaposition of public funders and the crowdfunding movement. I agree with the pitch Adrian makes for a hybrid public/ crowd funding ecology, and believe passionately that ‘big’ funders could do much, much more to help crowdfunding really become a way of life for creative and social organisations here.
I’m amazed that we haven’t seen more from big funders to reward those who have crowdfunded successfully already. Granted, it’s great that NESTA are getting behind a few platforms as part of the Innovation in Giving fund, but I reckon there are a few other local-cost and no-cost things that public bodies could do to help make crowdfunding really popular here:-
- Encourage a significant media organisation to run a ‘crowdfunding campaign of the month’ segment, perhaps co-produced with NESTA (with NESTA selecting the best campaign each month). The example of the Observer ‘new radicals’ supplement was a good example of what NESTA can do here.
- Encourage other public funders (e.g. Arts Council) to establish schemes only open to projects who have part-funded their work through crowdfunding, and establish experiments to direct ‘match-fund’ public and crowdfunding on individual projects and groups of projects (CrowdCulture in Sweden are a great example of this). In a similar fashion, public funders and think-tanks could easily establish their own ‘launchpad’ along similar lines to RocketHub’s, by working with brands and larger organisations to identify new opportunities to grow successful projects even faster.
- Identify and showcase best practice in crowd-fundraising training. We think that the most effective way to increase the success rate of crowdfunding projects across platforms may well be to increase the capacity and capability of individual fundraisers, and encourage project leaders to think of themselves as fundraisers. My WeDidThis co-founder Hen Norton is already doing some of this, as she describes in her blog- and she’s not the only one!