September 22, 2011 § Leave a comment
Have you seen that Nike commercial where Michael Jordan tells you why he succeeded? The ultimate point is that one has to fail numerous times on order to finally succeed. This fact is hard to dispute as I have not yet met an accomplished person who managed to succeed in everything (s)he did over and over and over again.
As the story goes, a failure to protect his bike from theft pushed Mohammad Ali into boxing.
Mohandas Ghandi failed to secure his already-paid first class seat in South Africa and was subsequently thrown off the train. This “minor” incident ultimately paved a way to Ghandi overthrowing British rule in India.
A recent study by MIT suggests that allowing scientists to fail also increases their chances to come up with breakthrough scientific discoveries.
The list can go on indefinitely, the main point is clear – one should fail and be allowed to fail in order to succeed.
Now, wouldn’t you agree that same rule holds for crowdfunding? Of all the new platforms and initiatives that are appearing today, many will fail. I hope that some of those that fail will learn their lot and will find strength and desire to make their next initiatives successful. Experience of failure is what crowdfunding lacks today.
September 21, 2011 § Leave a comment
My quarterly column for an online Dutch entrepreneurial magazine Sprout was published. Below is an English translation.
Sometime ago I was invited to participate at a round-table discussion on crwodfunding. The organizer was a crowdfunding entrepreneur I had never heard of before, but I figured the main players in the industry would be there, so I attended. Five years ago the world had no idea what crowdfunding was, today – the plate is is filled to the brim with entrepreneurs venturing into crowdfunding.
Dutch media continues to increase its focus on crowdfunding, and the overall attention the term receives, makes it appear more than it really is. If the law of attraction holds, we can expect the crowdfunding market to grow from all this coverage. However what is necessary for crowdfunding, more than media space, is success.
This year alone, more than eighty Dutch projects have been cofinanced through crowdfunding. Dutch cultural foundations are looking into ways to break bread and so begin sponsoring developments of crowdfunding platforms, similar to Amsterdam-based Voordekunst.nl. Voordekunst is an Amsterdam only initiative, while its clone that is currently under development will attempt to occupy the whole national market. What success factors are required for such an initiative to make it big?
According to the initiator of the round-table, storytelling and communication are the most critical success factors for crowdfunding. This “knowledge” is primarily based on publically available information about the American initiative Kickstarter. Bunch of hot air that is, if you ask me. When you only focus on bringing in funds that aren’t well spent, your success is bound to be short-lived.
Another expert advice recently published in a NOS.nl article steers entrepreneurs towards initiating funding of playgrounds. These ideas are a sugar cake for officials that hand out subsidies. Needs for playgrounds are highest in most deprived areas with neighborhood residents that are the hardest to reach through social media. Indeed, they are the best served by such initiatives, but are least of all able to invest. And when those playgrounds have been built, who will maintain them? Are we going to crowdfund that too?
Start small and offer quality
My advice to anyone interested in initializing crowdfunding is – start small and offer quality. Forget the success factors lists and make sure that you get the core of your concept right. Work with people related to your concept with good faith. Then growth will come itself. Make development of your core concept a clear guideline. Do you want to add value to project owners or do you limit yourself to facilitating? This is an important choice that is often overlooked, resulting in high overhead and a disgruntled community.
I have a request for the Voordekunst-number-two people. use your available budget for research and find out how to turn this Amsterdam initiative into a European success. We will be proud of our innovative Dutch discovery and maybe event have a shot at Kickstarter’s success.