Should Everyone be Using Crowdfunding for Their Projects?
There’s been some great successes with crowdfunding in general, and Kickstarter specifically, but that doesn’t mean that it’s the right option for everyone.
Crowdfunding is a powerful emerging tool, and for some it’s been exactly what they’ve been waiting for. But with big success stories encouraging companies to jump onto the proverbial bandwagon, it should be remembered that this is far from a sure-fire way to win business, or to finance your project.
How crowdfunding works
The average crowdfunding project lasts 30 days, giving project hosts a short window to raise the funds and promote a high-impact awareness campaign. The industry itself grew 81% in 2012, valued at $2.7bn, and it is estimated that by the end of 2013 this will increase to $5.1bn. It’s been helped by a couple of high-profile wins over the past couple of years that have helped keep crowdfunding in the spotlight.
Kickstarter’s success stories
Kickstarter is arguably the most publicly recognizable crowdfunding website around at the moment, and when the team behind the TV show Veronica Mars used the site to pitch the idea of creating a movie version, they broke crowdfunding history. Having smashed their target, they ended up receiving $5.7m from over 90,000 backers. It is arguable that their success was largely down to the popularity of the show, something that Zach Braff (star of the TV show Scrubs) was also able to take advantage of when he sought funding for the sequel to his first film Garden State.
Braff caused controversy with his campaign, raising the debate about who should be using crowdfunding, and leaving some to feel as though independent filmmakers unable to get studio financing (who the site is ideal for) were being pushed out of the market by stars who just wanted independence from the ‘big money men’. Due to the controversy, the show’s popularity and Braff’s brilliant Twitter presence, the month-long project was able to gain incredible amounts of publicity, which lead to generous donations and a successful campaign.
Ones that miss the target
Unfortunately, Melissa Joan Hart was not so lucky. The star of the hit 90s show Sabrina the Teenage Witch had to close her project after raising $51,605 which came from only 315 supporters. In an interview with the Huffington Post, Hart said that having received large donations initially, the project was having problems with the smaller amounts – the incentives simply weren’t working.
Hart’s TV roles were long behind her before she started her Kickstarter campaign, which no doubt affected the amount of publicity she received. Crowdfunding and crowdsourcing is very much a here-and-now movement, and has emerged in a rapidly transforming age, where despite being vast, memory capacity is still short term. Consequently, the momentum needed to propel Hart’s campaign forward simply wasn’t there. This wasn’t helped by Hart trying to raise funds for a new and unfamiliar project, rather than a reboot of the popular tv show she starred in. If it had a been a Sabrina the Teenage Witch film, would the funding target have been hit?
Hart, sadly, was one of many who are not able to successfully fund their projects, as unfortunately the current success rate is only around 15%. Although this may seem very low, we have already seen how such a young market has grown incredibly rapidly, and as people learn more and more about what works and what won’t, the success rate is likely to increase. In the meantime, it’s safe to say that the best thing to do if you want your crowdfunding project to succeed is to get the marketing right. With good marketing the project will have the momentum and power to inspire people to back it.
Image Courtesy of Pixomar / FreeDigitalPhotos.net.
Phoebe Ellis-Rees splits her time between London, where she walks, and a small town in the Netherlands, where she cycles. She likes Scandinavian crime dramas, books by John Wyndham and has a soft-spot for Marmite.
Is this your first time here on a blur Group blog? Why not check out our About or How it Works pages to find out more about the Global Services Exchange. If you’d like to read more blogs then you can visit the blur Group blog, or if you’d like a more diverse selection of reading material then check out the other blur Group blogs.