Crowdfunding a Growing Trend for Funding Projects, Causes, Startups
Originally pubslihed in Gig Harbor Life
Independent filmmakers, artists working on an installation and entrepreneurs with a startup all face the same challenge: funding. Thanks to a trend called crowdfunding, which saw huge growth last year, these creative individuals now have a better shot at getting a financial boost.
Crowdfunding has been described as a marriage of social networking and philanthropy. It is similar to crowdsourcing — and what you’re asking people to do is fund an idea, project or need. An estimated 250-some crowdfunding websites provide a platform for making pitches to the crowd — anything from pleas to help a friend with cancer to tech geeks seeking funds for a new app —in hopes of getting dreams or needs funded.
More than 60 crowdfunding sites popped up in 2011, according to pleasefund.us, a United Kingdom-based site that was launched in November. Collectively, these websites have raised millions of dollars and some have become multimillion-dollar ventures themselves through the fees paid by their successfully funded users.
Many of these platforms cater to the creative types — artists, filmmakers, writers, designers and musicians. But the idea is also taking hold among entrepreneurs. One wildly successful example is TikTok+LunaTik, a kit to convert an iPod Nano into a wristwatch, which received more than 13,500 pledges totaling more than $940,000 on kickstarter.com a year ago.
Some business-oriented sites have adopted a model that actually allows people to invest in a venture instead of being a donor or sponsor, and Congress is currently debating crowdfunding-related legislation.
The platforms vary but generally speaking, the person looking for money creates a pitch explaining the idea and the need, and usually offers rewards or perks in exchange — sometimes as simple as thank-you cards. Contributions are made through the website, and most use an “all or nothing” method where funds are returned to donors if the goal is not reached. Some sites also allow for partially funded projects.
Crowdfunding sounds easy in principle but it takes a tremendous amount of work, both behind the scenes and via social media. I learned that the hard way recently when I decided to take my own need — graduate school tuition — to the “masses.”
I set up my pitch on indiegogo.com, calling it “Mission Go to 11” (borrowing the “Go to 11!” unofficial motto of my 2011 cohort at MCDM, University of Washington’s Master of Communication in Digital Media program).
The decision to launch the so-called campaign (see it at indiegogo.com/Go-to-11) came after I pursued my dream of 10 years to return to school last fall, then saw it come to a halt after I lost a big contract as a self-employed writer and editor.
It wasn’t an easy move, having to tell the world about my tuition challenge, but at the encouragement of a friend, I went for it because I really believe in my dream. Also because I’m a rebel and you don’t slam the door in front of a rebel’s nose.
What I discovered two weeks into the adventure was that crowdfunding is not “build it and they will come.” I had experienced the power of crowdfunding two years ago when a couple of friends decided to send me to a national journalism convention after I cancelled my plans to attend due to unexpected circumstances. The idea went viral — in less than 24 hours, my friends and friends of friends as well as strangers pitched in $800 for travel. Imagine the overwhelmed feeling!
For “Go to 11,” I decided to offer my writing, editing and digital media skills in exchange for sponsorships, targeting mostly businesses, entrepreneurs and such. Many lessons were learned so far, but the biggest is this: Crowdfunding platforms are only a vehicle, and trying to get support is very much like trying to find a client, an investor or a capital campaign funder. In other words, it’s all about the marketing — and it’s a part-time job.
Gig Harbor artist and Army combat veteran Stephen Ewens confirmed that theory. Ewens used popular platform kickstarter.com this past fall to fund “The Afghan Project,” a series of 10 paintings exploring the emotional and physical challenges of the war, both overseas and at homes, from the perspective of a soldier.
He surpassed his $5,000 by 5 percent, receiving 39 pledges in 30 days. Ewens said he spent as much time publicizing the campaign as it would have taken him to get the money through paid work.
“Crowdfunding isn’t easy but people need to know it’s very possible, very doable,” he said. “It’s allowing the average Joe to follow a dream.”
For him, the formula for success was about having a compelling story — and his is powerful, indeed — then using all available avenues for publicizing it, not only social media but also traditional media such as newspapers and television news. And, of course, friends and family along with the rest of his network played a big part in spreading the word.
He was so inspired by the experience, that in January started a second crowdfunding effort, to fund an art show so he can share the work.
My own effort hasn’t been as successful so far — but it doesn’t end until Jan. 31 so I still have hope — but one insight I can offer, if you’d like to learn from someone else’s mistake. Before taking your idea to the masses, come up with a mini business plan of sorts. Figure out how you’ll promote the effort, who will blow the horn for you, what doors you’ll knock on.
And then, just hit the pavement running, and don’t stop.
Of course we’ve all seen this poster about poor Grandma.