July 20, 2011 § Leave a comment
Couple of weeks back ARTE TV showed a short clip about crowdfunding, featuring Hind and me. Hind is a Dutch pop singer widely known as the first finalist of Dutch Idols. Also, Hind is arguably the most successful crowdfunder on Sellaband – in just 11 days she received $40,000 from fans. If you speak German or French, click here and check out the video.
June 3, 2011 § 4 Comments
At present, crowdfunding is primarily used for creative projects. Creative minds come together and pitch their ideas to the public in hopes of funding for their artistic projects. The conflict here is in the fact that creative people do not always have the right mindset for business pitching, be it to small investors or multimillionaire angels. There are mavericks indeed – Andy Warhol, Damien Hirst, Jay-Z – just to name a few. Yet the hermit artists with l’art pour l’art mentality are struggling to get their projects funded. With gratitude and appreciation I take my hat off to this breed of artists, and I want to help them benefit from crowdfunding as well.
Today’s artists, as never before, need networking, art circles affiliation and a basic sense for making money from their work. Traditional artist-manager, maker-seller relations like the once common in the music industry do not exist in crowdfunding. A shame, if you ask me, because these relations can be of great value to the artist and his or her potential fan base. If you are an artist deciding to use crowfunding I would seriously recommend taking time to educate yourself about the difference between a good crowdfunding pitch and a poor one. Most crowdfunding platforms provide basic guidelines, plus there are blog posts by and for crowdfunders with suggestions and best practices. Check them out.
Check out my next video blog post, I will give you some tips on how to improve the chances of your crowdfunding project.
May 25, 2011 § 6 Comments
One afternoon we asked ourselves a question: “How many followers do you need to receive one dollar from your crowd?”
To measure the amount of social network support we turned to Kickstarter as it is the most popular and, in many ways transparent. We took 60 successful music initiatives listed on Kickstarter. Selection fell under the criteria of being affiliated with music and having collected more than $5.000. We then made a spreadsheet with data from Kickstarter, Facebook and Twitter. We looked at the amount of:
– Followers the bands/projects have;
– Facebook likes there are on their Kickstarter pages;
– Comments about their projects there are on Kickstarter;
– Updates by the project owners/ musicians. (see the spreadsheet here);
From averaging our Excel spreadsheet numbers, we found that:
– About three Facebook likes on your project’s Kickstarter profile gets you one backer;
– Every Facebook like is worth around $34 dollars of investment;
– Every social media follower brings you about $96;
The numbers above are averages. The deviations (how far are all the numbers from the average) are huge. So unless you plan to set up a hundred different Kickstarter projects at once, you will probably not get the same results. Lies, damn lies, and statistics!
The numbers generate more questions than they give answers. For example: If people like your profile page, do they attract more backers? Or do the backers like the page and then simply attract more likes from their own social networks? Are your social media followers directly involved with backing your project or do they just help spread the word about your project and contribute to your funding in this indirect manner?
So, as you see, the data does not draw a picture, instead, much like Jackson Pollock, it splashes a bunch of paint on the canvas and leaves you baffled in search for meaning.
To fully answer these questions, we analyze: in what way does the project include its followers; quality of the project proposal (usually the video); degree of originality; novelty and so on. These are hard (if not impossible to measure objectively).
We have talked about our finding with Mark Hillen (pictured), an expert in Retail, Social Etrepreneurship and Crowd-backed initiatives. “Crowdfunding is a relatively new phenomenon and there is little hard-data on it”, says Mark. “I expect, that in a few years from now, when researchers and universities start investigating crowdfunding, we will see a lot of interesting results. Similar thing happened in marketing. Today, marketing is an established science, and retailers know exactly how their promotions will affect the sales of a particular item.”
“We do not yet have the same data for crowdfunding,” continues Mark, “eventually, we will know what type of videos, what type of engagement, what type of projects have better success chances for crowdfunding. As for now, much is based on intuition and gut-feeling.” Mark advises crowdfunders to define the potential supporters based on the cause of the Crowdfunding campaign, understand their emotion that can trigger support, know what they want and like and tune the efforts and incentives. And make a clear call to action!
We do not want to give up our search for answers. We are sure that there is a connection between a project’s engagement with social media and its crowdfunding success (or failure), we just do not yet know what it is. Surely, the crowdfunding community is eager to learn about it as well. That is why we we are sharing our spreadsheet with our readers. Feel free to share your thoughts, ideas and findings with us and anyone interested in the topic!
May 18, 2011 § 1 Comment
Today, Dutch daily NRC Handelsblad posted an article on Africa Unsinged. I’ve translated it for you. For my Dutch readers, see the original below.
Africa – land of music
A new face of Africa – that’s what entrepreneur Pim Betist is working on. He is using music to accomplish his goal. Betist, founder of music platform Africa Unsigned, believes that African countries are suffering from their image.
“We want to show the other side of Africa, not the one that asks for aid, rather we are focusing on African musicians”, says Betist. “We see it not only from an idealist point of view but from an entrepreneurial one as well. We are convinced that the New African Sound, which we are hearing in Africa today, offers many possibilities.”
Through crowdfunding, Betist studiously selects artists to support in their music career. Betist once founded a similar concept called Sellaband. Africa Unsigned makes use of quality control. “Our talent scouts have travelled through the whole of Africa in search of talent. They went not only to the more popular Western Africa, but Eastern and Southern parts as well. They came back with hundreds of demos. The demos were then judged and selected by our music panel including Damon Albarn, the singer of Gorillaz. Through this selection we singled out 20 artists, who are now featured on our platform and are able to draw in supporters.” In return, supporters get rewards or incentives, for example information, CDs or private concerts. The more artists bring in, the more Africa Unsiged can do to help the artist. We offer our services for market conform compensation. We can produce CDs, promote, organize tours and so on. In a dialogue we find out what the artist needs, one singer wants to do a tour in Europe so that is what we are crowdfunding for her now.” Apart from Africa, Betist is also searching for African artists in England. This week, Africa Unsigned officially launched in the U.K. Guests got to see special performances by promising talents. “There have been few investments in music from Africa, this is what we want to change.”
What the New African Sound entails, Betist can’t really say. It isn’t genre bound. It can be indigenous or traditional music, but could also be rap or rock, or the Janis Joplin-like voice of Rina Mushonga from Zimbabwe.
May 6, 2011 § Leave a comment
Yesterday Sprout.nl published the Dutch version of my open letter to Wall Street Journal about making a clear distinction between crowdfunding and P2P lending. The letter was a reaction to AFM and DNB, Dutch equivalents of SEC and Central Bank, who published an article warning about the risks of crowdfunding. The content of my letter was simple: DNB and AFM don’t understand the concept of crowdfunding and should do proper research before they create panic amongst potential crowdfunding supporters.
May 2, 2011 § 2 Comments
Today I sent an open letter to The Wall Street Journal. Early April the WSJ published an article on crowdfunding in the USA and SEC’s discussion on relaxing regulation to foster crowdfunding initiatives online. Purpose of the letter is defining crowdfunding. See the content of the letter below, or click here to see my signed version:
This is an open letter in reply to J. Eagelsham and J. Holzer’s article, dated 09/4/11, on SEC booting up for the internet age. The authors discuss SEC efforts to adjust regulation to better suit crowdfunding realities prevalent today on the internet.
There is a good chance that you and some of your readers have a clear definition of the concept of crowdfunding. But one thing that baffles me now is the number of enterprises, efforts and platforms that affiliate themselves with crowdfunding, but in reality have little to do with it. All those that are not actually in the crowdfunding business but make the world think otherwise, jeopardize the concept and put an unnecessary risk to the integrity of crowdfunding. So it is now timelier than ever to position crowdfunding under a single room in aims of protecting it from unnecessary risk.
Fundamentally, crowdfunding involves the transfer of funds from party B to party A, so that A can achieve a desired goal from which both parties as well as an unrelated party C will benefit.
For example, if you are an artist (B) and you post your project onto one crowdfunding platform, you will record a CD with money you collect. The ones that backed you (A) will receive, say, a copy of a CD, or tickets to your concert. Not only your backers, but also your listeners and new fans (C) will benefit from listening to your music. These listeners/fans were not involved with your crowdfunding project in any way. However, they are the quinta essentia, the element that makes crowdfunding what it is. Because ultimately a new crowd should grow and benefit from the crowdfunding process.
From now on we should consider everything that involves peer-to-peer financial support, but does not involve the key party C – peer-to-peer lending. You see, if someone posts a project asking for money to fix his garden, promising in return to pay back the money with interest, only he and the lender will enjoy the benefits of the project. As long as thousands of garden fans can enjoy that same garden the transaction should not be categorized as crowdfunding.
I firmly believe it is very important to draw a thick line between the two concepts. Peer-to-peer lending is picking up pace and chances are we’ll hear of some big successes and failures P2P lending soon. If P2P lending platforms continue to associate themselves with crowdfunding, we will all have to share each other’s risks. One can be cautious without being a fatalist and I am cautious about P2P lending as it still has a long way to go until acceptable transparency and security for all parties involved. To put it bluntly, if a grandma gets robbed of her yearly pension because she invested into someone’s porch renovation I do not want crowdfunding to be involved.
April 12, 2011 § Leave a comment
Many musicians today try to use crowdfunding to record music and reach their audiences. Majority of these efforts are done through specialized crowdfunding platforms. Yet, some musicians use really surprising and extraordinary ways to get their music out, get heard, perform and crowdfund. One such musician is Tobias Becker, also known to many as nnoiz Papp. He performs live concerts in and interactive computer game Second Life. His listeners, other game users, can drop by and look and listen to his avatar performing music. Users then have an option to contribute money to nnoiz Papp for his performances. To us it seems like a very original form of crowdfunding, the one that transcends technologies and conventional thinking and potentially opens up vast new opportunities for interaction between musicians and their fans.
We’ve asked Tobias about his (and his avatar’s) experiences in Second Life, as well as his views on crowdfunding.
Egor: Tobias, could you tell me a little bit about yourself and your performances on Second Life?
Tobias: I am very interested in the new technologies. A friend showed me Second Life three years ago. I didn’t like the graphics in Second Life and actually found them very awful. But when I when I saw the interactivity of the game, I became very interested. You see, avatars on the other side are real people too, so it is more than a computer game.
In the game, I wanted to do something completely different from the real life. I first started with Avatar Orchestra Metaverse [AOM]. AOM is a group of people who play music in Second Life together. They build their own instruments and play by clicking buttons. But it was hard to organize rehearsals and concerts because there were always ten or fifteen people involved and they were mostly in different time zones. Also, I am a musician, so I wanted to play real instruments. I wanted to play my oboe which was not possible to do with AOM. So I left AOM and went to play for myself.
I rented a little part of land, built a little oriental coffee-shop there and started to play groove-oriented oriental music. With contributions I get for my Second Life performances I try to pay for the game and my island’s rent. Eventually, after about one year and some concerts I realized that I had enough stuff to make a CD, which is now available on iTunes.
E: How does live performing in Second Life work?
T: There are two ways. One is: during my concerts I stream playbacks through iTunes and play instruments over the playbacks. The sound from the mixer streams like internet radio, then, in Second Life I have to mix this stream and enter the URL into the game, allowing everyone on my island to hear the music if they got the sound on. The other kind of playing is to program the objects in Second Life so when the avatar goes through these objects, the sounds are triggered. One time I tried a combination of the two: I had a playback and I walked through objects at the same time. This is very complicated! And you never know when the trigger is heard by the user because every user has to upload the sound as the sound is not on his computer. Using the combination you cannot play really exact stuff.
E: What do you think about musicians using crowdfunding to fund their “real-life” music?
T: I fear crowdfunding is only possible for musicians who are already famous, because when a group is famous you have many fans that will pay, but when you are not famous – nobody might pay you. That is why I am a little bit skeptical about crowdfunding… I am not sure that it will work for everybody! Making a CD is a lot of work and requires a lot of money, so I think in that sense, crowdfunding can be used only as a part of the music production.
E: Do you have any advice to give to artists who would like to use crowdfunding?
T: I think it is necessary to care about your fans! If the fans know you are busy and you are working on your music for them, then it will work for you. I have very nice fans in Second Life, when I see they are online, I play special kind of songs for them, and they know those songs are for them. I think it is necessary to have a good relationship with your fans! Your fans are interested in you to continue playing and making music. For example, the metal bands have often very strange fans that would buy everything that is from the band even though they can get all of it without paying. The fans pay because they like the band’s music and they want the band to make another CD. A band should build a relationship with their fans!
In sum, what nnoiz Papp is doing does not fall under any “traditional” crowdfunding approach. Rather, we see him as gradually building a bridge interlinking music, technology, funds and fans. Although technology still has a long way to go (remove lags, improve graphics, etc) to allow nnoiz Papp to perform the way he would find it best, still, the progress is being made in that area!
So there you go, dear musicians! Use technology in creative and original ways, build good ties with your fans, and hope that your originality, effort and energy pay off. Next time you are playing Second Life, do not forget to drop by and listen in to nnoiz Papp performing!