Crowdsourcing has become one of the biggest topics of discussion this year. While the crowd method is seeing adoption in a vast array of applications, the two most popular uses are raising money for projects and wrangling in freelancers for design and other tasks.
But harnessing the crowd is a lot easier said than done. Crowdsourcing is not a magical formula or guaranteed solution and it doesn’t mean that you necessarily have to do less work.
Yesterday at the Grow 2012 Conference, multiple crowd experts shared some insight into this rampant trend. Adam Chapnick, principal of business development at Indiegogo, explains a few trade secrets to maximizing the amount of money raised in a crowdfunding campaign.
TRICKS OF THE TRADE
1. Include a video.
While videos are optional on Indiegogo and other crowdfunding platforms, they all highly recommend using one. And that video should include a part where the people behind the project are shown—even if it’s just a bookend at the end of a trailer—and explain their passion for the project. This one move can more than double the money raised, Adam affirms—”people fund people, not projects.”
2. Update your investors.
Some campaigns update their campaign once or twice, some maybe never. The project creators may not feel a need to update, but updating is strongly encouraged by Adam. He revealed statistics that show the updates you have, the more engaged investors are, and the more money that is raised overall. A campaign with 31 updates increases the average amount raised by a staggering 408% on Indiegogo.
Indiegogo offers additional tips to Mashable after SXSW.
Adam says that “traction comes from action.” You have to actually do things to convince people to give you money whether they’re a venture capitalist or a stranger on the web coughing up five bucks. Another lesson from him is that “ideas are nice, but execution kills.” That action and traction validates your idea, at which point more people will give you more money.
NOT EVERYONE IN THE CROWD LIKES THE CROWD
Matt Mickiewicz, a co-founder of 99designs, took the stage after Adam to explain the incredible disruption of the crowd space. Matt, who is the youngest homebuyer in Canada at 19 years and two weeks, pointed out how crowdsourcing has already disrupted numerous industries and is just getting warmed up. But not everyone agrees with using the crowd.
“What they don’t tell you when you’re disrupting an industry, though, is that disruption creates backlash,” Matt said. Even though 99designs has paid out $39 million to designers across 158,000 contests, his company faces a lot of heat from critics.
Those against the crowd argue that comp work without guaranteed pay is virtually criminal and that it’s ruining the lives of freelance designers; some have dubbed startups like 99designs “the scum of the earth.” But people like Matt argue that many of these freelancers wouldn’t have been able to find work on their own—and no one is forcing them to work for free.
Whether or not you agree with the moralities of the crowd, one thing for certain is that it’s here to stay. With that mind, it would be wise to leverage it.