Tuesday, October 15, 2013

Does Crowdfunding Really Work

I have been struggling to find the funding to build my dream. I am a teacher and have not had a pay raise in 4 1/2 years. Every spare dime goes toward my project, but there aren't a lot of spare dimes these days. I decided to try crowdfunding. Are you familiar, dear reader, with crowdfunding? Crowdfunding is the idea that you can crack a large nut with the help of many squirrels. Let's say I need to raise $5,000 as in the case of my trailer. If 500 random people contribute $10 the dollar amount is met. If you need a large quantity of money, many people contribute a few dollars and it will add up quickly. Indiegogo and GoFundMe are two websites you can use to solicit crowdfunding.


The problem I have run into is crowdfunding is based on your circles: Family, friends, coworkers. You solicit them directly. Unfortunately my circles are rather small, and in this economy most are struggling to make ends meet. I was lucky enough to raise $60 toward my trailer (http://www.indiegogo.com/projects/tiny-house-trailer/x/2316888) and $40 toward the care and feeding of my Podcast (http://www.indiegogo.com/projects/rancho-no-dinero-podcast/x/2316888). I am very grateful for the contributions I have raised, but disappointed at the same time. I am also not really surprised. Crowdfunding has the same kind of issues that home-based businesses run into. I see lots of fellow teachers try to raise money by getting involved in home-based businesses such as ThirtyOne, Tupperware, Origami Owl, etc. The problem is that once you run out of friends, family, and coworkers who are interested in buying things, your customer base kinda dries up. Crowdfunding on a website such as Indiegogo.com and GoFundMe.com is supposed to expose you to others not directly in your circle. However, this requires you to jump through certain hoops to get exposure. Releasing all the information on your FB friends and Google+ contacts, your email lists, etc. is a first step and getting a certain percentage of donations from those folks within 24 hours is required. Unfortunately I was not successful raising that money immediately and I think it unethical to release my FB friends list and email information on people so that they can be spammed and solicited constantly. Also, many campaigns are a popularity contest that smacks of high school. I was never really good at sucking up to the "cool kids" (even though I found out later at a high school reunion I was considered one of them, who knew?). Getting the publicity to draw out interest from those outside of my circles was the reason I created Indiegogo campaigns.

My campaigns end in 67 hours and I am rather disappointed and sad. My friends encourage me and say I should run them again, but I am unsure. I am just not really certain how to go about getting the exposure I need. I have been soliciting corporate sponsorship as well and am hoping to partner with some great companies. But if I run the Indiegogo campaigns again I will have to decided if I want to expose my FB friends and email circles to the potential spam slam in order to gain personally. Ethically I am just not sure I can do that.

What is your opinion, reader? Would you release your contacts to a third party in this case?

8 comments:

  1. I think crowd funding is a wonderful way to get financing for a project. it makes sense to start with people you know. Often our friends want to help us to reach our goals and support us, but they do not always have the means to do so. Crowd funding allows people to contribute a little. if you believe in your project., share your crowd funding plans with your friends.

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    1. Thanks, Janeane. I agree that starting with you close family and friends and then expanding out your circle is good. I did share the campaign on FB and Twitter, but it kinda stalled after that point. I just don't want to break trust by revealing my contact lists to a site that is going to constantly solicit and spam them. I do agree though that Crowdfunding is a great idea.

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  2. I don't know if I'd do that, frankly. There are so many unethical people lurking about on the web . . .

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    1. I agree. I think there are too many places that just want folk's contact lists so they can spam them. I don't want those in my circles to feel that I set them up for that.

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  3. Hi Karen. I'm not going to answer your question because whether I would or wouldn't won't change your answer. You know the answer because it's written throughout your post. Now I want to see you build this thing. I'm almost a year into my actual build time and four(ish) years since I bought the plans so I'd be happy to share with you my approach to "getting over the hump" in the struggle to get started. Just let me know... Mike http://skrewconventional.blogspot.com/

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    1. Mike, I would very much appreciate your input! What was your approach to get over the hump?

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  4. I'll try and keep it short here. Once I decided to get started I focused on getting out of debt - that took about a year. Then I focused on saving money for a trailer, that meant cutting out "extra" stuff. "Extra" is your definition. I looked at used trailers but ended up buying new and had it built to my needs. My struggle came with the next phase for various reasons but mainly I got "out of focus". The approach to me is making the goal greater than the excuses. When I got close to saving the money something would come up. To get over the hump I sold my vehicle and rode a bicycle and walked to work. I realize not every one can go that far but this was a definite "out of my comfort zone" event. I also got things in the order that I needed them but I kept an eye out for ideas for what to do or buy in the future. Thanks btw for some of the ideas that you put up here. I did get use of two cars but I had no idea that was going to happen ahead of time and since did buy a car. May I suggest focusing on the trailer, Can you tutor or something for extra cash? Have you ever tracked what you spend in a month? That's an eye opener for some people. Hope this helps, and remember it is definitely a journey with bumps in the road. Sorry this is kind of a jumbled answer but I'm exhausted. (It will definitely make you tired)

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  5. Same as sitting (too lazy to stand) on a street corner with if a sign. Call it what you like but a handout is a handout.

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