Eileen Burbidge, a partner at Passion Capital, recently tweeted: “honeymoon period around crowdfunding beginning to close”. This seems to be a popular opinion at the moment.
Having launched a traditionally funded web business - Picklive, backed by Eileen, amongst others, as it happens – and this week launching a crowd-funded project, Foldable.me, I feel that crowd-funding may be underestimated.
What’s brilliant about crowd-funding isn’t the money. Money is nice, but in this age of ever-cheaper computing and ever-cheaper money, it’s rarely the biggest problem. What’s brilliant is the format. A good format generates eyeballs and eyeballs are what a start-up needs more than anything else.
I’m using format in the sense a television producer might. Reality TV producers are the champions at shaping real life into a great story. What makes a good format? Well, before Mint Digital, I was at a TV producer called RDF, on the distant fringes of a team that created Wife Swap and Secret Millionaire.
And, in the industry, I learned that three questions are always asked when pitching a new format, each of which is dealt with remarkably well by crowd-funding platforms like Kickstarter.
Where’s the jeopardy?
Jeopardy means something needs to be resolved. In The Apprentice, each hour drives towards the “You’re fired!” climax. The viewer cares who gets fired because much of the preceding hour is spent establishing how lovable, horrible or incompetent each protagonist is.
Creating a format with good jeopardy is harder than it sounds. In business, most outcomes are hard to evaluate (was the iPhone 5 launch a success or a failure?). That doesn’t work on TV, so The Apprentice tweaks real life to make it more black and white.
Kickstarter, too, has great in-built jeopardy: a project either succeeds or fails, publicly, on a countdown. The result is never a shade of grey. The funding is the focal point of a bigger, emotionally richer story: an individual putting their dream to the public.
Is it repeatable?
A repeatable format is good news for a TV producer. If you crack the format once, you get paid for dozens of episodes (or hundreds of episodes in dozens of countries, if you really hit the jackpot).
Perhaps surprisingly, a repeatable format also helps the viewer. It lets the viewer know what’s in store, while allowing room for a little surprise and variation.
Kickstarter is fabulously repeatable. A viewer knows what to expect of the intro video, the funding levels, and all the other components, but each project is different – often brilliantly so.
This repeatability makes Kickstarter a great place to look for new projects, and means that web users, and journalists in particular, can easily and enjoyably browse it.
What do you see on screen?
Here’s where I always used to come unstuck. I’d nail a repeatable format with great jeopardy but somehow have forgotten this obvious question.
In general, viewers want to see things happening, not people talking. The Apprentice has lots of action at the start: taxis sweeping dramatically across London, running along high streets, shouting in markets. This builds enough momentum to engage viewers in the comment and analysis of the second half.
Much of the web is comment and analysis, but Kickstarter is more like a live event. The crux of the format is the dollar thermometer ticking up and, perhaps, smashing through the goal. Dollars are great – sexier and more concrete than likes or retweets.
Beyond that, there are the updates and the buzz spreading across the internet.
Because Kickstarter is a great format, it generates great PR for its projects. When we put Foldable.me on Kickstarter, it got covered on WIRED’s Gadget Lab, Bloomberg TV, The Huffington Post and elsewhere – all with no PR spend.
We never had that sort of coverage pre-Kickstarter, and this PR led to 18,000 people signing up to our launch mailing list. In many ways that’s probably more valuable than $25,000 in funding.
In short, crowdfunding, above all else, is spectacular theatre. It contains the elements of a truly great entertainment format, and great formats generate big audiences. For that reason, it’s here to stay, and it will continue to generate eyeballs and cash for brilliant new ideas.