An interview with Greg Jacobs by Chris Dunn

Greg Jacobs explains in this talk with Chris. How he has used crowdfunding to fund his products. The crowdfunding campaign that he has ran got backed for a little over $500.000. He reversed engineered it in the same way our students learn in design thinking. In other words he used the crowdfunding as an experiment if people were interested in his product. With the new trend of digital crowdfunding he could now do this without spending enormous amounts of money on manufacturing costs. He analysed the manufacturing costs of the product and used crowdfunding as a marketing tool to see if it was viable to create the product. And you could really say he was with a funding of $500.000.

Greg Jacobs and Chris Dunn

Keep me posted!

He says that still 9 out of 10 crowdfunding campaigns fail. According to him the reason for this is that many people just put the crowdfunding campaign online and do nothing else with it and wait till the money rolls in. Use your networks to spread the word to as many people as possible. Be proactive and provide updates and attractive content so you pull people and they stay interested.

Another interesting thing what was said during the movie is that crowdfunding solves a problem. People that normally couldn’t fund themselves can because of crowdfunding. Normally they could have gone to a bank or an angel investor or even family. The problem is that angel investors and banks aren’t lending you always the money that you need and family most of the time just doesn’t have the capital for it. So to fund your projects or products through crowdfunding really enables people that otherwise wouldn’t have a chance to fund themselves.

The three biggest obstacles in crowdfunding

1. Product Selection and Niche

He says there are basically two groups of people who want to use a crowdfunding campaign to offset their product. Some people try to view a crowdfunding campaign as a purely entrepreneurial endeavour. This means in his words that they create a product that I can sell the most from and you can get the most money from. Other people, which he calls inventors, which could say phrases like “I have this idea for years and I want to get it out there”. He says the “entrepreneurial groep” usually doesn’t have a big problem with doing this because they adjust to the market to sell their product. The “inventors” on the other hand can experience sometimes problems because they want to market to mold to their vision. A smaller chance of success, but if they succeed they usually do it grandly.

2. Getting the prelaunch traffic

If you just throw your crowdfunding campaign online than 9 out of 10 crowdfunding campaigns fail so you have to have a coherent plan before launching. You need to get as much traffic to your page, but this crowd needs to get build up even before launching the campaign.

3. Product delivery

Product offset in other words. Backers need to know what the product is all about. They need to hear the story behind it and feel interested about it.

The contra intuitive way to go about crowdfunding

Let me start of by quoting Greg Jacobs: “The biggest difference between the failures and the successes in crowdfunding is that the successful crowdfunding campaigns have always a good prelaunch.” To prepare for a great prelaunch is to know where the first 50% of your backers are going to come from. The other 50% Greg calls crowdfunding groupies that you don’t know, but are very enthused about crowdfunding and support many projects. Once you are sure about the 50%, you have a very high chance to score big on your crowdfunding.

The way to go about crowdfunding is to not go for the money but go for the reached goal. If your goal is reached this has many benefits.

The two biggest reasons to go for reaching your goal in stead of the precise amount of money that you need is that firstly is that people are more likely to fund your project if your goal has been reached very quickly. Second is that the reach of a goal triggers certain algoritmes of the crowdfunding platform that will generate organic traffic for you.

Conclusion

A couple of very good tips that were mentioned I would like to try and implement in our own crowdfunding campaign. Get more prelaunch traffic. We are already doing this but we could use more ways to try and implement this in our communications. The remark Greg made about setting your target amount lower so that you know you’re going to reach your goal is very helpful. This is the other point we can try and implement, although it will be hard to get a good estimation of the amount of people that will back us. And keep updating is his advice. Keep posting and keep selling your story. We’re on our way!

– Bas

Startup Event by ABN AMRO

 

This Friday was an exhilarating day. I had the chance to go to a startup event organised by the ABN AMRO bank. I didn’t know what this would entail, but after looking at the schedule It were a pentad of pitches from rising startups in the social enterprise scene with an introduction from professor Harry Hummels and Rutger Schuur.

Before I even arrived in the hall where the pitches would take place I met a man who also would go to this event. Ime Duyfjes, a friendly man who was himself inspired by entrepreneurship. He worked for years as a business consultant, but for the last one and a half year has been a teacher at the Hogeschool Windesheim in Almere. He’s a coach and inspirator for his students. We talked a bit about the pros and cons of entrepreneurship. Especially the mentality that is required for something as hard, dynamic and oftentimes frustrating of having your own business.

The introduction by …

First it started out by a small speech of Rutger Schuur. He is part of Stichting Jong Ondernemen. This NGO has partnered with ABN AMRO and some other ventures. When you look at it prudential we are at the edge of change when it comes down to the way we do business. The phrase: “money is the mean, impact the goal” is what this organisation has in mind. He said that Social entrepreneurs are the big companies of the future. The following speaker verifies these phrasings.

The talk Professor Hummels gave was interesting with a sparkle of an utopian world view. He talked on how you could see that the startups and companies in the social enterprise industry really are flourishing. And with good reason he adds.
According to him most social enterprises have problems with creating a business plan, but they have what most commercialised companies lack, a mission. Social enterprises are there to make a positive social impact. But this can only be sustainable if you have a good business plan to create revenue. This is also what came across with the startup talks that followed.

The five pitches

Granny’s Finest

logo-grannys-finest

The first pitch was given by Niek van Hengel. He talked about his startup called Grannies Finest. He began with a story of his own grandfather and we discovered through that story that over 1.2 million people in the Netherlands are lonely and from this group 200 thousand are extremely lonely. With his startup he wants to do something about this societal problem.

So he went to research and found out that a lot of old people, especially female elderly, are into knitting. Many have done this their whole life and it pleases them to continue this habit.

He combined two worlds with each other. He let the grannies knit a whole variety of knitwear that could be used by designers to make designer clothing. These cloths are now being used for retails stores like Bijenkorf, which, as you probably know, a pretty high class brand. This is a great example of a social enterprise that fulfills two necessary needs. A social impact, the people involved are evidently less lonely. And the second part is that the business has a very viable business model.

Thuisafgehaald.nl

thuisafgehaald

Thuisafgehaald.nl is another social enterprise. The talk was given by Jasmijn Vreeburg, which is the communication specialist at this venture. She began by explaining what the platform is all about. The idea was to reconnect people in neighbourhoods through exchanging food. A large problem within urban regions is that neighbours lose more and more connection. To provide a solution for this problem, people can invite other people to buy a meal from someone that lives in the neighbourhood. And so far with success: there are already 100.000 users on this platform.

Within this venture there has been made a division that has the same target group as the first pitch, bijzonder afgehaald.nl. This site is especially for the elderly. The idea was that neighbours could come and cook for these people. Research on this has shown that this is beneficial for both parties. The elderly don’t have to do the cooking and have therefor more rest and interaction with people, aversion of loneliness. And the people contribute their time to make food, and in the case of thuisafgehaald do a lot more choirs, get a good feeling from doing this. This has shown time and time again.

Voor je buurt

voorjebuurt_logo

Voor je buurt is a crowdfunding platform set up to help people with projects in their neighbourhood. This venture launched it business in 2012. The pitch was given by Aster van Tilburg. The venture is a cowdfunding platform for small projects for the neighbourhood. A couple of examples that she gave were the “bruisplaats” in Gouda and “de deelkelder” in Utrecht.

Wij de Wijk

Wijdewijk logo

This is a organisation that is very similar to thuisafgehaald.nl. Only it provides care in stead of food. Neighbours or family members can easily divide tasks that need to be done for the elderly/family. In this app you can put in activities that need to be done and arrange and divide them up among the people that want to be involved in the help for these elderly people.

SYR

syr

This was actually a very interesting talk. Especially since I’ve been working with refugees myself. They have build a restaurant with a Syrian kitchen and with the help of Syrian Refugees. Many refugees, and I know this from my own experience, can’t do anything without a permit and are often locked away in camps without sufficient guidance. SYR is an very interesting place because people can work or volunteer here even if they don’t have a permit. A very interesting pitch given by Hester van Eerten.

Conclusion

The experience of the event overall was a very nice event. I’ve learned a bit about the pitches, although most of them I didn’t find particularly intriguing the overall trend of social entrepreneurship was both appealing and satisfying. I don’t know yet what this will entail for me, because I’m not sure yet what I want to do. But I do know that I want to help build on an enterprise that tries to improve one or more societal problems. So in a way it was very enlightening for me to be at this interesting event.

References

MKB Service Desk (z.d.). Stichting Jong Ondernemen. Verkregen op 10 oktober 2016 van, http://www.mkbservicedesk.nl/6571/stichting-jong-ondernemen.htm

Hummels, H. (z.d.). Linkedin profiel. Verkregen op 10 oktober 2016 van,https://www.linkedin.com/in/harry-hummels-50a8547

Schuur, R. (z.d.) Linkedin Profiel. Verkregen op 10 oktober 2016 van, https://www.linkedin.com/in/rutger-schuur-2275854

v. Eergen, H. (z.d.). LinkedIn profiel. Verkregen op 10 oktober 2016 van,https://www.linkedin.com/in/hester-van-eerten-62bb5522

Duifjes, I. (z.d.) LinkedIn profiel. Verkregen op 10 oktober 2016 van, https://www.linkedin.com/in/ime-duyfjes-243a97

Jong Ondernemen (z.d.). ‘Jongeren inspireren en uitdagen te bouwen aan een ondernemende toekomst’. Verkregen op 10 oktober 2016 van, http://www.jongondernemen.nl/missie

van Hengel, N. (z.d.) LinkedIn profiel. Verkregen op 10 oktober 2016 van,https://www.linkedin.com/in/nvhengel

Vreeburg, J. (z.d.) LinkedIn profiel. Verkregen op 10 oktober 2016 van, https://www.linkedin.com/in/jasmijnvreeburg

van Tilburg, A. (z.d.) LinkedIn profiel. Verkregen op 10 oktober 2016 van, https://www.linkedin.com/in/astervantilburg

De Deelkelder (z.d.) Eerste spullen bibliotheek van Nederland en misschien wel de hele wereld. Verkregen op 10 oktober 2016 van, http://www.dedeelkelder.nl

De Bruisplaats (z.d.). Homepage website. Verkregen op 10 oktober 2016 van, https://www.voorjebuurt.nl/campaigns/bruisplaats/

Voor je buurt (z.d.). Over voor je buurt. Verkregen op 10 oktober 2016 van, https://www.voorjebuurt.nl/over-voor-je-buurt/

Examination Crowdfunding platforms

Another part of the research I’ve been doing is what type of crowdfunding platform we are going to choose for our CF campaign. I didn’t know this before but there are actually quite a lot out there, even in a small country like the Netherlands there are whole bunch. I first started my investigation overall. So, I looked at a couple of comparison websites, like top10crowdfund.nl/. This website gave the overview of crowdfunding websites that are active in the Netherlands. The website estimates that there are 92 crowdfunding platforms operating in the Netherlands.

cfplatforms

What should we choose?

There are very many different crowdfunding platforms to choose from. Some very specific to a certain topic or a specific way of funding (e.g. just by lending instead of donations and rewards) and some are more generic like Kickstarter or Indiegogo. I’ve looked into most of the popular ones, but most of them looked like a saturated pool to me.

The two golden questions and a bit of myself

It was nice to have an expert, which I interviewed before this research,to give me advice on this subject. Eric Heesen, the founder of Crowdfundy, told me two golden questions I should ask myself before chosing a crowdfunding platform. First “Wat was the topic our crowdfunding would be about?”. The second question was “What type of financing system did we want to have?”. In crowdfunding there are four different kinds of funding: equity, loan, rewards and donations.

What I also saw on many crowdfunding platform that there is a certain fee that you have to pay beforehand or afterwards. These fees depend on wether or not you have successfully achieved your goal and how big your goal was. This is called “placement fee” and “success or failure fee”. I’ve put these also in the description for a more detailed overview.

Our answers

The answer that our team had answered to these questions was that: “We were a social enterprise and worked with refugees and inspired enterpreneurship.”. So three topics I could search for when looking into the “right” crowdfunding platform.

And the second answer was that we didn’t want any lending crowdfunding campaign, nor do we want convertible lends (loans that can be converted into shares). We want to go for the rewards and / or donations. Ideally a mix between the two.

So I set my two parameters to these conditions and out of these came four platforms that we are going to discuss at large on the first of September, which is this Thursday. A quick note, I’ve put the financial details of the platforms at the bottom so it is easier to compare.

The Platforms

  • OnePlanetCrowd
  • 1%club
  • Chuffed
  • Crowdaboutnow

OnePlanetCrowd

oneplanetcrowd

OnePlanetCrowd is a platform that is stationed in Amsterdam. Their main topic is social sustainable impact. So, it is ideal for our organisation to take into account, because our organisation is similarily concerned about the same topic. Their main target group is social entrepreneurs, which we also are. Further than that, everything that falls into this category is allowed. OnePlanet has a few criteria that we would have to take into account.

Conditions

  • The project has to have an positive impact on man or nature
  • There is a concrete, urgent and clear communicable spending target
  • The financial needs must be between the 1.000 and the 1.000.000 euro’s
  • The campaign has to be totally led by the one who started the campaign.
  • If you don’t get your goal, every penny is send back to the investors

Another thing to take in account is that the platform is mostly based on projects in Germany and The Netherlands.

One%Club

1%club

This is also a crowdfunding platform that is stationed in Amsterdam, but other than the previous platform, the one%club is internationally oriented. It spreads the message that the projects that are being put on the platform all do ‘something good’. This can mean anything, but is in the realm of social projects. For example there are projects in Zambia that fund a new sustainable school, support refugee employees in Greece or support a sailing school just in the Netherlands.

Conditions

  • The target amount must be between the 250,- and 1.000.000,-
  • Successful or not, you will always get your money with this platform

Chuffed

chuffed

Chuffed is an Australian platform that is internationally oriented. And it was actually interesting to see that this page was one of the few, that had a tab especially for refugees. And since our core business is helping refugees, I was compelled to look into this one. The more I read the more I liked it. To quote Chuffed:

“We only crowdfunds non-profit and social enterprise projects. That’s it. That means we know what works for social causes, and our community is only interested in projects like yours.”

The website is very suitable with a lot of information on how to promote your own campaign. Luckily One%club has the same policy, but the afore mentioned onePlanetCrowd does not have that at all. What makes it a more difficult choice is that this is the only platform that is not stationed in the Netherlands.

CrowdAboutNow

crowdaboutnow

This platform is different from the rest because it is the only platform that is completely Dutch oriented and is stationed in Utrecht. It is all about social entrepreneurship. They assume you are one, of course, and they stretch the importance of the network that you already have. They say they offer much support during the campaign. I called this company as well and they advised me to check what kind of finance system we want. If we want to go on to (convertible) loans we should look at a platform like OnePlanetCrowd. When we want to do it more based on rewards and donations it’s better to choose a platform like us, more peer-to-peer based.

Financial situation

OnePlanetCrowd

Placement campaign: €200 + 1% target amount
Transaction costs: €0.50 (only paid if campaign was a success)
Succesfee: 7%

1%club

Placement campaign: free
Succesfee: 7%
Failurefee: 5%

Chuffed

Placement campaign: –
Transaction costs: €0.50 + 2.9%
Succesfee: –

CrowdAboutNow

Placement campaign: 1% target amount
Succesfee: 6%

Conclusion

Based on these examples I have chosen 1%club. Especially since we get started sooner than expected. With one%club you get your money, either way. One%club is also Dutch, and is centered in Amsterdam. It has the same overarching mission as we do, “doing something good”. Since this is our first campaign as a company ever, and we still have a lot to learn about how to do a good crowdfunding campaign, one%club is a logical option to take. This needs only to be discussed with the team.

Keep you posted on this.

– Bas

An interview with Eric van Heesen, founder Crowdfundy

Today I had an insightful interview with Eric van Heesen. He is the founder of crowdfundy, a crowdfunding advisory platform. I met him on the Campus Party, check my post on this. At this event there were a couple of very interesting workshops and lectures. Most of them about the subject entrepreneurship and what the most important considerations should be when you’re starting your own company. At this event Eric gave a free workshop on crowdfunding. Of course I was very much interested and took the course. Just before the course started I had a chat with Eric and explained a bit about DL and with that why I took this workshop on crowdfunding. During the workshop there was a small problem. The workshop was on the basics of crowdfunding. During the workshop I came to realise that I already knew quite a lot about the subject. Immediately after the workshop I thanked Eric and asked him if I could come by sometime for a cup of coffee to go over a few things on the subject of crowdfunding. This led to the interview I conducted today, 5 July 2016.

Questions prepared

  • What is a suitable crowdfunding platform for Delitelabs?
  • Which social media are mostly used in crowdfunding campaigns
  • Do you have some ideas on the rewards we can give away, or some examples out of the NGO crowdfunding campaigns you’ve seen so far?
  • Do you know social initiatives that were very successful on the crowdfunding market that you could name?
  • What would you recommend us to set our goal amount for the campaign?
  • Is LinkedIn a good social media to use during a crowdfunding campaign?
  • How I could find out what the conversion rate on average is with the crowdfunding campaigns done by NGO’s?
  • Do you have any tips on the usage of Social media usage, but also making calls and doing direct mailing?

 

Start with what you do

I started the interview by some chitchat, which led to a small summary of what we do as a company and what we stand for. I thought this would be essential for him else he could place the crowdfunding campaign into context. After this I could fire a few questions and the learning began.

The answers

I got a lot of answers back, also things I didn’t prepare to ask. This was pretty interesting to me and I got a lot of follow ups that needs to get examined. One of the things is a platform he recommended me to do an inquiry on which is One Planet Crowd. This is a crowdfunding platform which is based in western Europe and is available for Belgium, German and Dutch users. In another post I will examine a few potential crowdfunding platforms, which include One Planet Crowd. Another finding during this interview, although pretty foreseeable, was that the starting entrepreneur would pay for the courses we will offer in the future. Eric gave me also inspiration on what kind of Rewards I should think of, in this case maybe in line with the projects the participants are doing, but that needs to be negotiated. On social media Eric advised me to work with twitter instead of LinkedIn, because the network and the awareness created by twitter is bigger than LinkedIn. Also is Instagram something to start thinking about, but then we have to have pretty good pictures that we can use on a very frequent usage. Posts on Facebook should be no more frequent than one post a day. Another pretty interesting remark Eric made about Facebook is that the further you are in the week (Mon-Sun) and the later it is on a day, the more awareness a post will get. Concrete numbers on effectiveness in frequency of Facebook posts on this will be looked for and displayed as soon as they are found. Another thing on Facebook is that we could work with promotions and analytics, this cost a bit of money but could boost our awareness immensely. With this promotion tool we could target people very precisely, so another thing we need to have a follow up for is start defining our target group. Tips for Twitter use were especially sharing interesting news messages on the subject that is your core, with us that would be entrepreneurship and refugees.

Conclusion: The learnings of the interview

Although I had prepared a few questions for the interview, seen above, it was a very informal interview. At the time this type of interview was very nice to have, but now while I’ve to write it, I come to the conclusion that it is not always that productive at the end. This because I could have done a better job interviewing Eric if I had more concrete questions I could ask him. Although this is the first real interview that I do on crowdfunding, these are some of the points I really have to look out for next time. Next time I even could ask if I could record the whole interview. Now I had to read the notes I’d made, which two of them I had to decipher. So two learnings from this first interview.

  1. Be very prepared in the sense that you exactly know what you want to know at the end of the interview.
  2. Ask if you can record the conversation so you can also use quotes and know exactly what has been said during the interview.

So thank you Eric van Heesen for the interview and the insights and followups you provided me with! Visit crowdfundy to see how Eric can help with a crowdfunding campaign.