A discussion on the ins and outs of crowdfunding, and how it can jumpstart your project
“The crowd was essential to make people understand the importance of the festival,” began Chiara Spinelli, crowd-funding consultant and one of the people responsible for reviving this year’s International Journalism Festival.
Because this year, it almost didn’t take place. Hence this panel on whether or not crowdfunding is a viable way to fund journalism.
So is it?
According to Salvo Mizzi, founder of the accelerator Working Capital, “it’s just the tip of the iceberg.”
He said it’s “a new form of the social contract”, a social agreement, if you will. But, Mizzi warned, “you shouldn’t think that crowdfunding is simply the solution to solv[ing] the traditional journalism business model.”
Testing the waters
It’s not everything, then, but one thing it’s good for is finding out whether your product is even one that people are interested in.
“Crowdfunding gives traditional media the freedom to experiment,” said Garrett Goodman of Worldcrunch. He used a Kickstarter campaign not only to get his world news startup going, but also to figure out if there was an appetite for what he was offering.
Mizzi agreed, pointing out that it’s a marketing tool and an opportunity to understand the responsiveness of the people who are following you.
Give the people power
Many crowdfunding campaigns allow the company to offer a reward to those who donate; for 10 euros you get a t-shirt, for 100 you get a special edition of the product, and so on.
To all three panelists, this is not the right way to go about it.
“We should be thinking more about selling an idea instead of the features of an idea,” Goodman said. “People can get into an idea.”
Spinelli interjected, explaining that creating a relationship with your potential donors is much more valuable. If they promise to give you a gift for donating, she said, “this doesn’t make you feel involved.”
A sense of involvement is precisely what people should feel in order for a crowdfunding campaign to work.
Ernst-Jan Pfauth and Rob Wijberg, both of De Correspondent in The Netherlands, used this sense to grow a community of supporters that would not only help them initially, but stick with them even after their campaign was over.
Their rewards were focused on how they were planning to develop the company. If someone gave 100 euros, for example, they were invited to their sneak preview event. With 250 or more, they received an exclusive dinner in which they could ask anything about the project.
The biggest mistake you can make, Wijnberg told the audience, is to form a campaign around the idea that you are helping yourselves by saving your newspaper, for example, or your career.
What you have to tell people, he said, is “what we want to give you as an audience.”
“The more you give, the more you should feel a sense of ownership… for this idea,” Goodman added. Only then will your audience feel like you are letting them help you, rather than making them.
Feeding your community
Wijnberg and Pfauth wanted to redefine news, and they wanted to do it for their audience, so they wrote a manifesto about what the “new definition of news should be.”
“News is not that great of a product,” Wijberg said. It promises to tell you what’s going on in the world, but according to him only delivers the exceptions like accidents, mistakes and tragedies.
It was their goal to give people “a better picture of how the world is functioning.”
After eight days of launching their campaign, 50,000 people had donated with an average of 69 euros per funder.
But they didn’t just sit back and watch the campaign work its own magic.
Social media, partnerships and a lot of community networking were all essential factors in ensuring that both the De Correspondent and Worldcrunch campaigns were successful.
Twitter and Facebook were the most important for Wijnberg and Pfauth. “Social media was the obvious choice,” Pfauth said.
And even then it’s not so easy. “Social media don’t work if you don’t use them in a social way,” Wijnberg said. Every update has to be interesting in itself; your online presence should tell a story.
At De Correspondent, for example, they collected criticism and turned them into questions, allowing them to speak to many followers at once.
In this way, Rob pointed out, funders are not “just being asked to give money,” but instead are participating in the project.
“Everybody knows how to speak to their own audience,” Goodman said. When it comes to crowdfunding, you have to use that to your advantage.
There’s no magic wand
For Goodman, the intention was to literally “kickstart” their project, and subsequently find alternative sources of funding. One of their failures? They spoke about that as their intention, he said, but quickly realized it’s hard to get other forms of funding.
Wijnberg and Pfauth are also experiencing challenges. They need 4,000 of their original 20,000 funders to renew their subscription if they are going to survive.
The biggest advantage of crowdfunding, according to Wijnberg, is that it gives you freedom, while all other forms of financing – bank loans, major investors, etc. – all carry with them some sort of negative.
“[Crowdfunding is] the only way to have small investors that don’t want anything to say, but believe in what you want to make,” he said. In terms of sustainability, it’s a great way to begin.
But it should only be a beginning. Journalists – or anyone looking to fund a new project – should not solely rely on crowdfunding.
“There’s no magic wand as a way to launch something,” Spinelli concluded, and presented the panelists with the final question of the evening. Is crowdfunding a viable way to fund journalism?
“It could be a part of what saves journalism,” Goodman said, “but it’s not going to be the one thing that saves [it].”
“Journalists will save journalism. That’s my bet.” To Pfauth, it’s a means, not an end.
But to Wijnberg, journalism is not in a crisis. De Correspondent is constantly coming up with new ways to do things differently. Where are they going, what’s the next step? “That’s not a crisis,” he said.
In the end, no one solution is going to solve any challenge. So in the words of Goodman: “If you’re not experimenting, you’re not surviving.”