In this second part of a series on crowdfunding, I take a look at IndieGoGo. The platform went live a little over 2 years ago and has been gaining traction ever since. It originally started out as a fundraising tool for film, but has evolved to encompass all kinds of creative endeavors including books, videogame development and film festival organizations. Founder Slava Rubin cited the reason for creating IndieGoGo was to harness the power of fundraising on the internet by building a site that aggregated all the tools together. “We knew there was Paypal, social networking, and YouTube but nothing available infrastructure-wise to help someone raise the money in an efficient manner through the fans and the community. So we created IndieGoGo.”
“IndieGoGo was born in the film space, but we have expanded so we see it as a tool for creatives to use to raise up to $100K at a time. You get a personal page that showcases your project, communication tools, financial transaction metrics, a flexible perk infrastructure, social media tools so you don’t have to do this all on your own in a spreadsheet. There are a lot of good fundraising products out there and things are really heating up in the space. We saw what it did with the Obama campaign and social networking and people getting used to doing transactions with their credit cards online. We are the only online site that allows for fiscal sponsorship and crowdfunding all at the same time. You don’t get double taxation and it is all integrated into one place. We are completely international on both the contribution and the project set up side. We have a full analytics dashboard for all project owners so they can see who the top referrers are, see where all the money is coming from.”
Just this week, IndieGoGo announced their acquisition of Adam Chapnick’s Distribber , a service that puts a film on online distribution platforms like iTunes, Amazon VOD, and Netflix for a one-time fee and takes no rights and no backend percentages. “It’s really an opportunity for us to create an entire suite of tools. We kept hearing from our customers that they loved our fundraising tools, that we really helped them on that end, but they told us they were hitting a wall when they finished their projects and started looking for distribution,” said Rubin. Now, one can use IndieGoGo to raise funds and then distribute the finished film product with one simple to use tool.
There are a host of tools available to the project creator for running a successful fundraising campaign. The creator starts with setting up a landing page for the project which can feature many kinds of content; video, podcasts, photos, text etc. This is where perks for donors are visible as well. The creator can have as many pricing tiers as they want and the perks associated at each level. Rubin cautions against having too many levels though. “When choosing what price points to put the perks at, give donors very few decisions. People don’t usually judge their donation on what they are getting, they judge on how much they want to get involved. You don’t want to give them too many options once they have made that decision. Have like a small, medium and large. Like $25, $100, $1,000. Don’t make them decide between $25 and $30, that just annoys them and they may just decide to do neither because they can’t weigh which perk means more. Make the choices more limited so that they will act, not be undecided. I wouldn’t say just do three, but I wouldn’t do more than 5 levels. After that you start getting into perk paralysis.”
Since this kind of fundraising is all about audience engagement, it makes sense that there are many social media tools available to help push projects out to online networks. “We have all kinds of social media integration where you can have customized widgets for Facebook, Twitter, email, so there is no need to copy/paste or use plug ins. Your backers can just click on it and have it load up to their profiles to promote your projects. We also have event functionality and "demand it" functionality, so you can list events associated with your project like a screening or a fundraising night, and if you want to find out where the demand for your project is the greatest, there are buttons where people can demand to see your project. Also there is a lift to projects in that we participate as a platform on social media sites and we help promote the various projects in our own efforts. On our home page, we promote projects, we have our own blog, we do interviews, we have our own newsletter, we also promote the site at panels and in the press so projects can get a bump from our efforts.”
I asked Rubin about how IndieGoGo views the popularity of Kickstarter with their all or nothing policy and their deadline imposition. Many seem to like the gaming aspect and the urgency of reaching the goal in a specified amount of time or risk losing all backing. He said that IndieGoGo had these in place when they started, but it wasn’t popular either on the creator side (understandably) or on the donor side. “Within several months of the launch, we had some successful campaigns and we had some failures. With the failures, we thought ‘wow we did a really good job,’ we had the funder protected and we made sure that their money did not go somewhere that they did not want it to go. We gave them back their money because the goal wasn’t reached, and on both sides of that transaction, people were upset. It was obvious that the project owner would be upset because any money is helpful, but on the funder side people said we had made their lives more complicated because they still had to pay Paypal a fee or they had to wait for us to send a check. It was really surprising, an interesting lesson to learn. As far as the deadline, it certainly seems interesting and may be valuable but the all or nothing, I am not sure is the right way to do it. Our site is an evolving thing and if the customers say that they would find value in having that, then we can adapt.”