crowdfunding & crowdsourcing

Crowdfunding & Crowdsourcing

Christopher Charlesworth [email protected] @HiveWireCA

Oct 8th 2013

© 2013, All rights reserved HiveWire Inc. 2

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


www.csiCatalyst.org @csiCatalyst

The exchange of value between you and the crowd


Crowdsourcing:


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:



Crowdfunding 101

What is Crowdfunding


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


All or Nothing Ø  You only get the money raised if you

reach (or exceed) your target

Two Rewards Models:

Who is Crowdfunding ?


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


Quality Idea & Pitch

Strength of Your Network

EnHcing Rewards

MarkeHng Campaign

Rewards

Types of Rewards


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 ?


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


Sources: 2013 Crowdfunding Industry Report, MassoluMon, HiveWire Data

Industry fees typically range from 2% -‐ 9% + Payment gateway fees

Case Study


Case Study: Tell your story



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


•  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?


•  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


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�

: [email protected]

@csiCatalyst

Workshops: bit.ly/csiCatalyst

Questions?


215 Spadina Ave, Suite 425 Toronto, ON

Canada M5T 2C7

[email protected] Twitter: @HiveWireCA

Thank you.

Appendix


Success & Failure

Most Failures are BIG

Only 10% raised 30% of goal Only 3% made it to 50% of goal


-‐

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


Case Study: Market Validation


Case Study


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


-‐

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


$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:


Fraud: Kobe Red (Beef Jerky)


Campaign Content


CS examples •  Dribbble.com:

•  Your •  Tongle:

•  Your

crowdfunding & crowdsourcing

Technology