by Collis Ta'eed, CEO, Founder, Reformed Web Designer.
Over the last few years we’ve been excited to sponsor a growing number of web and open source projects through crowdfunding campaigns. From the visual web design tool Macaw, to the open source blogging platform Ghost, there have been some spectacular campaigns raising hundreds of thousands of dollars and showing just how successful this route can be in our space. Other projects we’ve supported like Rails.app, Pressgram and Aesop have raised less funding, but have still seen good success out of their endeavours.
I really hope we see more of these campaigns for web and open source projects because the right crowdfunding campaign can do much more than just raise money. While nominally about sourcing cash, crowdfunding is also about something even more pivotal: momentum.
In fact picking the right funding platform can mean getting a whole team behind you. Nick Haskins from the Aesop project couldn’t praise the CrowdTilt crew enough.
"Those guys literally, work for you. Near daily emails from the guys at CrowdTilt offering to tweak things on the campaign and even submitted Aesop to Hacker News which boosted some of the traffic."
That support, and the Hacker News posting specifically, is how I came to hear about Aesop’s project. With Envato’s involvement in WordPress it was a no brainer for us to back the project. Now we have a great contact with a dedicated open source founder, building a themable plugin.
The reality is that starting anything is hard. There's just so much inertia to combat. You've got other things to do. Nobody's heard of you. There's hurdles to jump and potholes to side step. It's hard to decide exactly what to focus on first. And of course, you usually need more time, or more money, or probably both.
When I asked Tom Giannattasio from Macaw why they took the crowdfunding route for a commercial app, he replied that:
“Crowdfunding was a great way for us to connect with the community. Beyond raising capital without giving up equity, it helped us test the market, identify early adopters and gain a solid user base to test our ideas with. We're a small team but we now have a much larger network helping us evolve.”
John O’Nolan from Ghost, like the Macaw founders, chose Kickstarter as his crowdfunding platform. He had this to say about the experience:
"I chose Kickstarter to fund Ghost because it is the most popular, and most visible crowdfunding network out there. I thought it would be the best way to get the project in front of the highest number of eyeballs. To an extent, that was true, but if I were going to do it again I think I would give a great deal more consideration to other platforms (or rolling my own) for the greater freedoms, lower fees, and more flexibility that they come with. Kickstarter is very well suited to creative projects, but for technical (let’s call them ‘geeky’) projects, the 'Kickstarter Effect' of viral discovery has a far less significant impact."
In some cases Kickstarter isn’t even interested. The site’s guidelines prohibit campaigns ‘to fund websites or apps focused on e-commerce, business, and social networking.’
That’s one of the reasons App.net’s founder Dalton Caldwell has created Backer, a service that’s intended specifically to crowdfund ‘features’. As possibly the original poster child for crowdfunding a software project (remember App.net’s original $800,000 crowdfunding success) it makes sense that Caldwell should return to the same source for planning new additions to the service, like the recent introduction of Bitcoin acceptance.
A few weeks ago I spoke with the CEO and founder of another company using crowdfunding for feature planning. Matin Tamizi of BalancedPayments decided to take to fellow YCombinator company Crowdtilt to launch a feature for his payments company that allowed pushing funds to debit cards. Matin seemed excited about the campaign success not so much for the funding, but because it demonstrates customer intent.
Customer intent is one of the basic foundations of lean startup theory. For entrepreneurs looking to build a company, one of the first things they need to do is test and prove a market. While hardware and gaming startups seem to have cottoned on to this, there are still comparatively few software based companies trying their hand at it.
At the end of the day I’m interested in seeing more projects take to crowdfunding for a very different reason. Supporting and sponsoring projects like Rails.app, Ghost and Aesop is a bit like supporting and sponsoring conferences. As a company we show our community that we’re engaged and supportive, it builds brand, and connects us to exciting movers and shakers in the industry.
In that sense, I believe people planning crowdfunding campaigns for web and open source projects could learn a lot from conference organizers. Conference organizers often dedicate a part of their site specifically to corporate sponsors. Packages will include things like brand placement, event involvement and opportunities to show support. Similar opportunities are available for web and open source projects, and I’d love to see more corporate backer levels. There certainly seems to be interest from companies. Ghost received corporate backing from many companies like Envato, and even Microsoft contributed.
At the end of the day crowdfunding is there to help get projects off the ground. And for that it can be magic. As Aesop’s Nick Haskins puts it: “Having that support there, whether it be friends, family, or colleagues, keeps you from going insane.”
As for us here at Envato, we're just happy to have the opportunity to participate, back and support great projects. I just hope I see more of them come up!
UPDATE: Thanks to Chris Christoff on Twitter for pointing out that a post from Envato about crowdfunding really should mention that aside from using a platform like Kickstarter you can DIY your own crowdfunding site using ThemeForest's many Crowdfunding Templates. Thanks Chris :-)