Building with more than money

Last time we looked at the +Pool to begin dissecting what exactly crowdfunding is actually paying for when we see capital projects appearing on Kickstarter. In that case, the funding was directed at a feasibility study and mockup, but Spacehive is a site dedicated to crowdfunding capital investments—community centers, gardens, bits of infrastructure, etc. As they put it, Spacehive is a way to “transform where you live.”

Recently a community center in a village of four thousand people raised almost 800,000 pounds on the site. But they had two important sources of help.



Image source: Spacehive.com

The first was £772,000 already in the bank, according to the Guardian. Unlike Kickstarter, Spacehive allows projects to book donor contributions from outside the system and displays them prominently on the project page. This is an important thing to point out from a product design perspective, as it recognizes the specific nature of the kinds of community projects that Spacehive is built to handle. Gadgets and gizmos on one of the consumer oriented crowdfunding websites are unlikely candidates for public or charity monies, but community projects will often be eligible for this sort of support and there are positive effects to highlighting it.

According to the project’s page, Glyncoch Community Regeneration Ltd had raised 94% of their funding before launching the crowdfunding campaign to secure the last bits (nb 6% of £791k is £47k, so I’m not sure where the Guardian’s £28k figure came from). This follows a well-worn fundraising path: collect some big donations from institutions and then go to the community for the remainders.

It begs the question whether it would be possible to invert that model and use the crowdfunding as part of the due diligence process. Institutional funders often spend quite a lot of time vetting proposals, and anything that can lower these costs (in time and euros) frees up more money and manpower to flow through to the projects themselves. Perhaps this explains why NESTA, the British equivalent of Sitra, have funded Buzzbnk and Peoplefund.it. A well-conceived platform should lower the cost of both discovery and due diligence.

Executed without any online platforms, New York’s High Line managed to create a virtuous cycle of community and institutional funding that snowballed into successive waves of support, and eventually accomplishment, through the use of—and well-executed publicity around—key, tangible milestones such as studies, council resolutions, competitions, and exhibitions. Another group are now using Kickstarter to bootstrap the Low Line. We will watch closely to see if they are able to parlay an impressive response from the community into support from from institutions that is commensurate with the ambition and investment required by the project.

In this respect, Spacehive is missing a trick by not exposing the number of crowdfunders who have contributed to a project. A quick comparison of the information design of this page on Spacehive and this one on Kickstarter shows that the latter celebrates the number of funders, the total contributed, and the remaining time to get in on the project. You can almost feel the size of the crowd and how excited they are by glancing at these numbers. There’s a sense of scale and velocity. Spacehive is comparatively opaque, static.


Screenshots from Spacehive (left) and Kickstarter (right) highlighting how the two sites use metrics to demonstrate support.

And that’s unfortunate because the second thing that Glyncoch had going for them was the support of Stephen Fry and his 4 million Twitter followers. Again citing the Guardian, Fry publicized the project which led to a flood of support from as far away as New Zealand (where he lives). So here’s another way to escape the dilemma of the short tail that I mentioned in the +Pool post: get a celebrity on your side. Another classic fundraising technique, but an easy one to replicate.

When we think about how to take these ideas to scale, exceptional contributions such as a celebrity’s support on Twitter should be considered nice to have, but are not useful as the only path to success. In the absence of the celebrity attention, how do local projects build and maintain support? We suspect that one aspect is learning how to pitch—and having tools that teach and gently encourage good pitches.

Spacehive structures the project presentation by asking people to respond to a series of important prompts such as “what we’ll do,” why it’s a great idea,” and “how we’ll get it done”. They also ask proposals to display a breakdown of their budget, which is a useful bit of transparency (though unfortunately you cannot link to the page). It’s good for covering the basics, but it’s not quite honed into a pitch yet. More on this in a future post, as it will be something we need to dedicate attention to in the product design of Brickstarter.

It’s great to see that Spacehive enables people to contribute value to a project in multiple forms. One can donate money, but they can also volunteer time. This “shared value” approach is important, but again the visibility is missing. Could the volunteer hours be included somehow in the overall presentation of the site to give a feeling of the financial and social capital that has been motivated?

Why do I blog this?

As we develop Brickstarter we’re constantly balancing two things: the concept and the execution. We know that a perfect platform which is implemented poorly is not going to get used very much, so we want to learn the good and the bad of existing platforms. As we explore the variety of existing on and offline tools, methods, and processes that people are using to crowdsource, develop, and fund projects we are keen to observe the strategic objectives as well as the tiny little details that make it tick. So yes, we alternate between fuzzy issues like trust and dark matter on one hand, and the specifics of product and process design on the other. It will converge!

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