crowdfunding & crowdsourcing
DESCRIPTION
Crowdfunding has grown increasingly popular in the nonprofit sector over the past few years, thanks to the Internet and crowdfunding platforms like Kickstarter and Indiegogo. The question on every non-profit, charity and fundraiser’s mind is “can crowdfunding really raise a lot of money for my cause?” The answer is yes - if you do it properly. Christopher Charlesworth, co-creator of the CSI Catalyst crowdfunding platform for social good, co-lead a workshop on crowdfunding at Toronto Net Tuesday on October 8th, 2013. Chris explained the fundamentals of crowdfunding, what it can mean for nonprofits, and shared tips and strategies on how to plan a successful crowdfunding campaign. You can watch a recording of the event on TechSoup Canada's YouTube channel: http://www.youtube.com/watch?v=YlzzeKQi6bc Or read a summary of the event's key takeaways at http://www.techsoupcanada.ca/en/community/blog/intro-to-crowdfunding-for-nonprofitsTRANSCRIPT
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About Us
Christopher Charlesworth Co-Founder
Asier Ania Co-Founder
Kris Olafson CTO
Moira Klein-‐Swormink Finance
Arthur Prevot Data Scientist
Jean-‐François Obregon Marketing
CSI’s Catalyst
Platform CSI’s Catalyst
(powered by HiveWire)
Platform Type Rewards Based PlaForm
Differentiation People creaHng a beIer world
Real World Community Extra Support
Partners: Centre for Social Innovation
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www.csiCatalyst.org @csiCatalyst
The exchange of value between you and the crowd
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Crowdsourcing:
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What is: Crowdsourcing ?
CrowdFunding: Fund something
~$300 M in funding in 2012
CrowdWisdom: Solve a Problem 75% of people in the crowd
already knew the soluMon.
CrowdVoHng: Select something
Very basic and employed by many sites
CrowdLabour: Complete tasks Millions or workers
compleMng simple tasks
CrowdCreaHon: Create something Army of graphic
designers at your service
CrowdAdvocacy: Support something People-‐powered poliMcs to
decision making.
Case Study:
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Crowdfunding 101
What is Crowdfunding
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Crowdfunding is the aggregaMon of small amounts of money from a large group of people via the internet in order to fund something (business, project, etc.)
Four Types Equity Ownership / Profit Sharing
Lending Percent Return (peer to peer or aggregaMon)
Donation: Non-‐tangible feel good return.
Rewards: Non-‐monetary Returns (e.g. t-‐shirt, product, lunch with founders. Legally a donaMon.)
Rewards Crowdfunding
Keep What You Raise Ø You keep the total you have raised
regardless of reaching your target
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All or Nothing Ø You only get the money raised if you
reach (or exceed) your target
Two Rewards Models:
Who is Crowdfunding ?
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Source: 2013 Crowdfunding Industry Report, MassoluMon
Social Causes 18%
Business & Entrepreneurship
16%
Films & Performing
Arts 18% Music &
Recording Arts 11%
Other 29%
Fashion 8%
Most AcHve Categories (Rewards-‐based)
Key Factors of Success
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Quality Idea & Pitch
Strength of Your Network
EnHcing Rewards
MarkeHng Campaign
Rewards
Types of Rewards
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RecogniHon: • Examples: twicer menMon, email thank you, name
posted somewhere, name in credits, etc. Things: • Examples: pin, t-‐shirt, CD/DVD, signed photograph,
prototype of your product, your finished product, something unique, etc.
Services: • Examples: your specific service, dance lesson,
workshop, etc. Access: • Examples: advanced Mckets to a conference or event,
limited access to a launch party, etc. Experiences: • Examples: help build project, apprenMce for a day,
chat, lunch with the co-‐founders, a character named afer you, etc.
$25 Most Popular Reward
$50 -‐ $70 Average Reward
$100 Most Money Comes From
At what reward levels do most people give?
Why do people Crowdfund ?
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Source: 2013 Crowdfunding Industry Report, MassoluMon
Why Crowdfund ? Ø Money Ø MarkeMng & PromoMon Ø Market ValidaMon Ø Connect with audience/customers
Key Takeway: It’s not just about raising money!
Platforms
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Sources: 2013 Crowdfunding Industry Report, MassoluMon, HiveWire Data
Industry fees typically range from 2% -‐ 9% + Payment gateway fees
Case Study
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Case Study: Tell your story
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TELL YOUR STORY
“Stories add meaning and meaning ignites acMon.”
“Make people feel your message not just understand it.”
-‐Terry O’Reilly
Rewards
Why people would back you
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• Cool Rewards: • People love to get something!
• Shared Passion: • What you’re doing can resonate with others
• Solidarity • Part of a movement
• ParHcipaHon: • Part of a collecMve goal
• Kindred Spirits: • SupporMng an entrepreneur in a similar field as the backer
• Etc.
Key Takeway: Know your target audience!
Marketing: Getting ‘eyeballs’ !
How do you get the word out?
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• Friends & Family • Mailing Lists • Important Nodes • Digital Media • Direct personal emails, Facebook, TwiIer • PR • Word of mouth • STRATEGY & PLANNING !
Key Takeway: It takes a lot of effort!
Campaign Content
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TEST and Iterate! • What:
• Video: Is it compelling, does it make sense. • Rewards: Are they enMcing, are they at the right levels • MarkeMng: Is it working?
• From Who: • Your close friends and family (they will spend the Mme) • People within your industry (it should resonate within) • People outside your industry (anyone should understand it) • Your BACKERS! (idenMfy why they backed and use/iterate)
www.csiCatalyst.org
CROWDFUNDING �FOR A BETTER�
WORLD�
@csiCatalyst
Workshops: bit.ly/csiCatalyst
Questions?
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215 Spadina Ave, Suite 425 Toronto, ON
Canada M5T 2C7
[email protected] Twitter: @HiveWireCA
Thank you.
Appendix
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Success & Failure
Most Failures are BIG
Only 10% raised 30% of goal Only 3% made it to 50% of goal
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-‐
2,000
4,000
6,000
8,000
10,000
12,000
Num
ber o
f Cam
paigns
Campaign Category
Campaign Volume and Success Rate (Kickstarter, 2012)
Campaigns Launched "Campaigns Successful"
Sources: hcps://www.kickstarter.com. Dynamics of Crowdfunding, Ethan Millick, Wharton School
Case Study: Documentary Film
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Case Study: Market Validation
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Case Study
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Success & Failure
Worldwide ~50% of all campaigns Fail
(sig. lower for keep what you raise)
Kickstarter Category Success Rate 26% -‐ 74% Overall Avg. Success Rate ~ 44%
Most Failures are BIG Only 10% raised 30% of goal
Only 3% made it to 50% of goal
Most Successes are small Majority only exceed goal by 10-‐13%
Success: Challenging to Create
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-‐
2,000
4,000
6,000
8,000
10,000
12,000
Num
ber o
f Cam
paigns
Campaign Category
Campaign Volume and Success Rate (Kickstarter, 2012)
Campaigns Launched "Campaigns Successful"
Sources: hcps://www.kickstarter.com. Dynamics of Crowdfunding, Ethan Millick, Wharton School
Market Categories
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$460 $676
$979 $1,430
$50 $89
$116
$166
$317
$555
$1,170
$2,123
$16
$62
$383
$1,344
$12
$74
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2010 2011 2012 2013 (EsHmated)
Millions of U
SD $
Growth in funding Volume
Mixed Others
Reward
Lending
Equity
DonaMon
800+ $5.1 bn
81%
Plaqorms worldwide
2013 est. worldwide
Growth in 2012 (64% in 2011)
0.8 Bn
1.4 Bn
2.7 Bn
5.1 Bn
Sources: 2013 Crowdfunding Industry Report, MassoluMon, HiveWire Data
Case Study:
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Fraud: Kobe Red (Beef Jerky)
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Campaign Content
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CS examples • Dribbble.com:
• Your • Tongle:
• Your