Saturday, July 19, 2014

Equity Crowdfunding in the District of Columbia 7/22 at 6:30 pm

Tuesday, July 15, 2014

Top 5 Reasons People Contribute to Crowdfunding Campaigns

We have been researching this issue for some time now, and I thought I would outline what we have learned so far. This is ever changing, so stay tuned.

A. EAS (Early Adapter Syndrome). There is a guy in my office building who is a crowdfunding junkie. Daily, he tells me about the latest gadget he just bought on Indiegogo or Kickstarter. He MUST be the first to own the latest toy. Here's the thing: he has grown quite knowledgeable about both technology and about selecting tech products. His success ratio has grown to near 100% now. He can spot a troubled product or crowdfunding campaign a mile away. Not a bad skill to have, actually.

B. Love. People donate to products, causes and events they feel excited about. They LOVE what you, the crowdfunder, is doing. Now, part of the issue is making sure that love comes through. If there is a disconnect, people will not know that they love what you are doing.

C. Community. It speaks to the community, whatever community that is. It can be a small or large group of people who are, or may be impacted by what you are doing. They love it (see 2. above), love you for doing it, and are willing to part with a few dollars to help you (and the community) out.

D. Belief. They like you. They really, really do. Not only do they like you, but they

  1. Want to be the first to own (or to help). 
  2. Love what you are doing.
  3. Think it will help.

Basically, they think you can do whatever it is you are trying to do. They believe in you.

There you have it.

Oh, the fifth reason? Yet to be discovered.....

Saturday, July 12, 2014

Much ado about potato salad

In the crowdfunding world, there has been much talk about potato salad, but not the delectable summertime dish. We're talking about a Kickstarter campaign that, so far, has raised over $46,000 with a $10 goal. Upon first hearing of this, one would assume there is some catch, that maybe the goal had something to do with a great social concern that potato salad could help fix, maybe hunger among six year olds....

Nope. Zack Danger Brown simply wants to make potato salad. I'm sure not even he thought that his campaign would garner so much support and notoriety. The campaign has spawned several copy-cats and off-shoots: "Potato Salad" by Philip "Call me Fredo" Morganelli and "Macaroni Salad - Yum!".

The overwhelming success of this campaign should serve as a wake up for several reasons. Firstly, the goal was overly simplistic. There was no elaborate reasoning or even a video. Secondly, there was no product to promote or great social benefit.

So, with much of the emerging data on successful crowdfunding campaigns recommending certain practices over others, does a campaign like "Potato Salad" completely do away with that advice? The answer, we believe, is no. It does not take much to raise $10, so the success of the campaign comes as no surprise. What is surprising is the $46,000 part. More than likely the silliness of the campaign caused it to go viral, allowing more and more people to see it. Those that did liked what they saw, were probably intrigued, and contributed. In other words, the campaign was successful because it ignored "best practices," not despite best practices. Let this be a lesson. Oh, and there is the possibility that people simply REALLY like potato salad.

As the crowdfunding industry grows there will be more successful efforts that go completely off the rails relative to "successful campaign" standards for one reason or another. In the same fashion, many campaigns will be unsuccessful even though the cause was sincere and well-thought out and they did all the "right" things one would think you have to do to have a successful campaign. The truth is there will occasionally come a campaign that will completely defy all standards. This is what we would call an anomaly. As one backer said "Everyone needs room in their life for a little of the absurd!" Either way, the campaign proves once again that literally any idea has the potential get funded.

I  like it, even though this smells like a set up....still...