K is for Killer Ideas

crowdfunding-pillarsNow the most obvious blog for K would be about a rather famous crowdfunding platform that has in the last year extended into the UK.  But no, I was determined to find our own K.  So I came up with Killer Ideas.  I’ll talk about platforms another time – wait for P!

Killer Ideas are what makes a crowdfund. They are the hook that makes people’s ears prick up, and then entices them to put their hands in their pocket.  SoLoCo works on the principle that a crowdfund has pillars that you can base your campaign on as follows:

“hook, social media engagement, network, geography, capacity, reputation and branding”

Of these, the critical pillar is the hook – and if your product or service doesn’t have a hook you need a killer idea within your campaign to make one.

Nucoco Chocolate Wall
Nucoco Chocolate Wall

When we crowdfunded with Nucoco we wanted to raise funds to help a chocolate company afford its branding and packaging. At first glance you may feel this would be easy ‘everybody likes chocolate’. But do they like it enough to donate more than the sum of a chocolate bar? The product was delicious, but what would make them stand out from other hand-made chocolate houses?  So, we had to create a hook.  Our ‘killer idea’ was to sell handmade chocolate and cake bricks that at the end of the campaign would form an edible installation. So we went all Willy Wonka – even to the point of hiding a ‘golden ticket’ worth £1000 in one of the bricks.

If you’re product or service doesn’t make waves, think of your killer idea first and how to build that into your campaign.  Remember the social media world is a noisy place. Killer ideas can help you to rise above it and be noticed.

The Scottish Perspective

glasgow chambers 

The Glasgow Chambers of Commerce recognised the emerging trend of businesses turning to the crowd for funding and wanted to know what the scene was like in Scotland.

At the end of June 2013 the GCC received the hotly awaited report by Twintangibles detailing the crowdfunding market in Scotland.

What was a little surprising was the massive under-utilisation of Crowdfunding in Scotland. In the UK, crowdfunding was worth £200m and so if you were to take 8% of that- as Scotland is 8% of the UK population- you would expect to see about £16m being raised. However there is less than £1m being funded this way. In looking for reasons of this Twintangibles left this open to speculation.

Why aren’t there more platforms and money being raised in Scotland?

Well Scotland is starting its own platform crowd. We have the recently released SquareKnot that is a really flexible platform allowing businesses to choose between a combination of equity,reward based and peer to peer crowdfunding. Then there is reward platform Bloom VC which launched back in 2011 just after our own platform launch (please click here to read further).  Next month will see the launch of ShareIn, an equity-based platform based in Edinburgh focusing on tech and bio-tech.

If we look across the water to the more high profile campaigns by Obama, Veronica Mars, Zach Braffs and Smosh they have allowed crowdfunding to become more commonplace in America. Whereas in Scotland the highest profile campaign we have is BrewDog and their excellent Equity for Punks campaign -although strictly speaking that was a public IPO.

It will be interesting to watch out for further research in this area as it could be a number of things- Are Scots just wary? Do we have smaller disposable incomes in the first place? Have they not come across a campaign that moved them? Is it a cultural thing that we’re a bit more reluctant to donate to business?

There are many possible reasons it could be but crowdfunding seems here to stay and as many organisations that hand out grants are looking for innovative ways to fund raise and banks can see it as proving a product or venture has real consumer potential, small businesses need to start getting in touch with the motivations of their customers or else they will be missing out on some serious cash.

#socialeconomy

This is a great Ted talk by Brian Solis – who you might remember from a previous post on the Conversation Prism. It looks at how technology, in particular social media is affecting capitalism and suggests a Generation C. What’s your relationship with customers like? He advocates that business is not so much business to consumer or business to business but people to people.

UKCFA

If your stuck on which crowdfunding platform to choose, the UK Crowdfunding Association (UKCFA) was established in 2012 and has a voluntary code of practice so you can be assured that your money is safe. They go beyond the rules imposed on them by the financial authorities and it gives you more piece of mind as it’s designed to protect those participating in crowdfunding. Members even allow you to have a cooling off period if you decide your donation was misspent.

There are 12 founding members but Trillion Fund have some great youtube videos explaining who they are and the different types of investment available for crowdfunds- the difference between donation, loan and equity. Here is a wonderful video on what crowdfunding is.

Each founding member has a slightly different target market so they can harmoniously work together in this national association;

Abundance Generation

– Is focused on  renewable energy projects.

Bank to the Future

– Raise finance not just by donation/reward/P2P/Equity but a combination of these methods.

Buzzbnk

-Specialises in social venture crowdfunds.

Crowdbnk

– Innovative crowdfund platform that began from a story about an egg.

Crowdcube

– Is an equity only platform.

Crowdfunder

– Utilises a reward based crowdfund platform to also call for peoples time and skills.

CrowdMission

– Equity based platform for social and environmental businesses.

Ethex

– A not-for-profit investment platform.

Gambitious

– Specifically for game developers.

Seedrs

– Best for start-ups.

ShareIn

– Connects individuals to existing companies for investment.

Sponsorcraft

– For educational fundraising.

Trillion Fund

-Renewable energy focused in supplying low carbon energy projects.