Slava Rubin on IndieGoGo
Interview with Slava Rubin, co-founder IndieGoGo
Mandy Rose: What’s your background Slava? How did you get involved in developing a crowdfunding proposition?
Slava Rubin: There’s three co-founders; Eric Schell, Danae Ringelmann and myself. All three of us had a mutual frustration around trying to raise money using the internet.
Eric came from a technology background and was on the board of a theatre company, Danae came from a finance background and had been working with different films and productions to raise money. I came from a strategy background and I had been starting my own charity for cancer research because my Dad died of cancer when I was 15, and then 10 years later I started a charity. So that was my background.
MR: Do you remember when you first heard the term crowdfunding, when you came across the concept?
SR: I think people started calling IndieGoGo crowdfunding in 2008.
MR: When exactly did IndieGoGo start?
SR: IndieGoGo started in January of 2008.
MR: And was there a gradual development of the form it takes now or did you nail that straight away?
SR; No, we were a funding site right out of the gate – not much has changed since we launched. Some of the buttons are different and some of the colours might be different. But in general the site is pretty much the same as when we launched.
MR: What’s your headline for what IndieGoGo is about?
SR: Democratising fundraising – where anybody in the world can raise money for absolutely anything.
MR And was that ever a debate in the business about whether to focus on North America or to go global? Was that something that felt important from the start?
SR: Well, the internet makes global much easier. North America is just one part of the world. We always thought globally.
We now have campaigns in virtually every country of the world and about 35% of our funding comes from outside of the US. We’re distributing millions of dollars every month now.
MR: Can you describe the basic mechanics and the way you fund the business, and the arrangement between you and people calling for money?
SR: We’re a platform like eBay; anybody can use our platform to raise money for absolutely any idea. So, if you’re passionate about a business or a cause or something creative you go on our site and create your own project profile similar to creating an eBay page or a Facebook page.
You include your story about why you’re passionate and how much money you’re trying to raise. You highlight how much money you need – let’s say 25,000 US or UK. You highlight how many days you would like to be raising the money for, let’s say 30 days.
You offer some perks in return – it’s not mandatory but 93% of campaigns that reach their target will offer perks. Perks are products, experiences or services that you barter in return for different levels of funding.
You then use social media and your own network to start raising money and usually you’ll get your first 30% from people you know, like your friends and family. After that you’d be able to start getting strangers to fund you as well.
IndieGoGo promotes you based on your ‘GoGoFactor’. So the more active your campaign the higher your ‘GoGoFactor’. You start getting your own network to fund you and we spread the word for you using the ‘GoGoFactor’ – on our home page, our blog, our newsletter – to the millions of page users that we’re getting. Sometimes you’ll get strangers to fund up to 90% of your campaign.
After the campaign is over you receive your money. If you choose flexible funding you keep your money no matter how much you raise. We charge you 4% if you hit your goal. If you choose fixed funding you only get your money if you hit your goal. After that, you fulfil your perks that you promised and everybody’s happy.
MR: Okay, so the ‘GoGo factor’ is really interesting. What are the indices you use for defining projects that you’ll get behind, that you’ll promote through the blog etc?
SR: We have thousands of campaigns that sign up every day and everybody wants to be featured. We believe that the reason that IndieGoGo exists and why crowd funding should exist is to democratise crowd funding not to maintain the status quo which allows one person to decide what goes on a home page or whether or not you deserve a bank loan.
So what we did is allow the people to decide based on their own activity who gets to be promoted. So that turned in to the ‘GoGoFactor’ which is a few dozen metrics – everything that’s obvious and many things that are not.
Things like the money velocity of how fast you are raising money, how many comments there have been on your campaign, how many people have promoted it via Twitter or Facebook etc. The things that are more subtle are how many people have actually added their pictures as part of their funder profiles? All of these things go in to the ‘GoGoFactor’ and the higher the ‘GoGoFactor’ the more we promote you.
MR: So it’s quite complex. So the dynamism of the fund raising is really important. Can you say a little bit more about what you think makes a successful IndieGoGo campaign?
SR: There’s three things that make a successful campaign;
- Having a good pitch.
- Being proactive.
- Finding an audience that cares.
Having a good pitch has five components;
- You want to have a video – a video campaign will raise 114% more money than none video campaigns.
- You want to have a realistic goal.
- You want to have a good deadline – a longer deadline does not make it better because the GoGoFactor is determined based on how many days you have left as well. So you want to stay active as much as possible. Just making it longer does not help you out.
- You want to have interesting perks – 70% of campaigns will have between three to eight perks and 93% of campaigns will have perks.
- You want to have interesting copy which mimics the video.
You want to be proactive so if you have four or more people on your team you tend to raise 70% more money than if you have one person. Using social media is the most important thing you can do. Personal emails are absolutely the best, Facebook is second and Twitter is third. You want to keep the updates coming so keep your campaign fresh. You can raise more than double your money if you create an update every one to five days.
And you want to track through your dashboard who’s actually doing the promotions for you so you can reward then and get more of those promotions. Then, finally, an audience that cares; you can’t just get strangers to start funding out of the gate so you need to get off to a quick start and that often means getting to your own network first. Typically you’ll get 30 or 40% from your own network by creating validation that way from your friends, family, Facebook, email list etc.
We know that as soon as you get 25% of your goal you’re five times more likely to actually hit your target.
Now as you get more of a GoGoFactor which includes all the different metrics we have listed you get more promotion from IndieGoGo and then you should do your own promotion to get strangers’ dollars.
MR: So that’s a kind of promotion and marketing campaign at a very different moment in the production process than a documentarist might be expecting to be engaged in marketing – which brings me on to thinking about documentary particularly.
Do you have any overall observations on the fit between documentary making and the crowdfunding approach?
SR: We have campaigns that go from in vitro fertilisation to funding new iPad styluses to documentaries that are making it Sundance and Tribeca. We actually had the winner of a Tribeca documentary award in 2011 [This was the film “Give up Tomorrow”] and we had 16 movies make it into the top festivals across the world including Sundance and Cannes.
So documentary works really well because it’s a very tangible thing. People like to be part of a movie. They like to get credits on the film. They want to get their name listed. It works very well because it’s very tangible. And there are lots of updates you can provide, and people like to know about it. Plus, filmmakers tend to make good videos, so you’re already a step ahead by creating a good video campaign.
MR: Though when we met in Wales you said that a documentary trailer doesn’t make a good IndieGoGo video.
SR: Right, a trailer is not an IndieGoGo video. The video needs to include the person saying who they are, why they’re making this campaign and why they need to raise the money.
The equivalent of a business doing a trailer would be, “Buy my shoes. Buy my shoes. They’re really great shoes. Buy my shoes.” You’re not very likely to care about the business if all they’re saying is “Buy my shoes.” So, if a film maker was just saying “Hey look at my movie, look at my movie, look at my movie isn’t it great?” That’s not the way to get engagement as part of your campaign.
MR: So, crowdfunding seems to really cohere around the person – not so much the personality but a clear sense of the person behind the project, the person who’s leading it or the team who’re involved in it?
SR: Yes. I wouldn’t get stuck on one person but it has to be real people. We’re just engaging with people. That’s the beauty of the internet and all the latest in social media. Instead of just some abstract brand or some random movie that you’re being asked to support these are real people with real purpose.
MR: Could you pick an example of a documentary campaign that been you’ve impressed by?
SR: There are tons of great ones. Last year we had The Bully Project which was picked up by the Weinstein company. They did a really great job. They were able to raise $25,000 for their documentary.
A really great one that we discussed [in Wales] was Sound It Out which was on to its fourth campaign – really great videos, really great updates. Another great one is You’ve Been Trumped, again from the UK. Another one from the UK is Anyone Can Play Guitar They were able to raise nearly $33,000.
But you also have narrative films – for example we have a film now that’s over $300,000 called Angry Video Game Nerd. And they were at over $200,000. They have 28 days and they have 4,130 funders.
MR: So is it about a community of interest fundamentally?
SR: There are four reasons why anybody funds anything;
- Because they care about the person, the cause, the campaign or the idea.
- Because they want the perks – they want the product/the service/ the experience/ the thing. They want the things that are being offered by the campaign whether it be the bag, the book, the movie credits or the DVD.
- Because they want to be there as part of personal ego or as part of a community. So they want to feel engaged, part of what other people are doing, or they want to feel good about themselves that they’re doing this.
- They want profit. In IndieGoGo you’re not able to offer profit. You can’t say, “Give me $1 and I’ll give you $5 back.” We have different regulations in America.
Some campaigns will only get funded based on the first reason – because people care. Some campaigns will only get funded based on the second reason – because people want the products and they really don’t care. And some people will get funded based on the third reason – because they want to be part of a movement.
MR: What are the major reasons why campaigns fail?
SR: That’s a pretty easy one. Some people want to believe that there are leprechauns with buckets of gold that just start jumping around from campaign to campaign and they just fill your baskets with gold.
Now that’s not to say that you can’t get a stranger that you’ve never met to give you money. That happens all the time. But what you need to do is move that snowball down the hill. You need to get that first 30 or 40% through your own effort or your own work and lots of contacting people.
So what happens is sometimes people just post their campaigns, they walk away and they believe if they build it they will come. They just post the campaign and off they go to drink Martinis. That absolutely, positively does not work. The more effort you put in to your campaign the more you’ll get back.
Very similarly – forget about IndieGoGo for a second – if you were trying to raise money or trying to sell something or trying to get people involved in the real world, lets say you just made one announcement in the front of a room and then you walked away for the next 60 days. Would you get any traction? Probably not.
So what the data has shown is that the effort you put in ‘in the real world’, if you make the exact same effort on IndieGoGo you’ll raise about 30 to 50% more money. So if you put in zero effort in the real world you’re probably not going to raise too much money, 30 to 50% more of zero. So you won’t get anything. But if you were able to raise £1,000 offline you probably would raise about $1,400 on IndieGoGo.
MR: Alright. So then a couple of questions really to end with. Can you tell me a little bit more about where IndieGoGo is right now – how many employees do you have now, are you in different countries, how does it work?
SR: IndieGoGo is totally global. Anybody can create a campaign in absolutely any country of the world. All the transactions are done in dollars on the site and then you get the money converted in to your local bank account currency.
We’re totally global, distributing millions of dollars every month.
MR: So the team are all in North America? Or do you have teams elsewhere?
SR: The actual team that works at IndieGoGo is a majority in the US. We have some folks outside of the US that act as consultants.
MR: And do you have like translated versions of IndieGoGo in other languages, or is it all in English?
SR: At this time IndieGoGo is only in English. It is a priority to translate it. That said there is a benefit from the English right now because it’s the most universally understood language. So you can get a lot of different countries funding without them having to translate it.
MR: And do you have other projects in the works, other projects or plans that are worth a mention?
SR: The thing that’s worth mentioning is that IndieGoGo is being improved every day. It’s based on customer feedback, like the people that are reading this. Our number one thing that we care about is customer happiness. So we’re all about ensuring that the product works well, that they get the education they need, and if they have any questions we always respond within 24 hours.
So the way to improve our product is to just give us some feedback and we’ll make sure to bring to you what you want.