This is a guest post by Lorie A. Parch, a writer, editor, and content strategist in Los Angeles.
Here’s something you don’t need us to tell you: Crowdfunding is a busy, noisy, changing-all-the-time space. It’s an exciting time, but it’s also potentially confusing to a lot of people: Which platform do you use? How to measure which one is the right fit for you? Is there a way to talk to other founders to see what they liked and didn’t like about the platform they used?
New York City-based CrowdsUnite was launched about 10 months ago by Alex Feldman to address a lot of that cacophony, aiming to bring, as he describes it on his site, “order and transparency to the crowdfunding industry.” CrowdsUnite is gradually cataloging and categorizing each of the hundreds of funding sites out there so users can filter, sort, and compare them. (No one is entirely sure how many there are, but Massolution’s 2012 Industry Report, published this May, said over 800; now September, somewhere north of that is likely.) Most importantly, users can also read reviews from people who used the platform to try to raise money, and upload their own reviews.
We sat down in early September with Feldman to find out how and why he launched his directory and where he thinks it’s headed.
The Crowdfundamentals: Why did you decide to start CrowdsUnite?
Alex Feldman: In two months it’s going to be a year since I started CrowdsUnite. I was finishing my MBA and I wanted to do something more in entrepreneurship and I got really interested in the crowdfunding industry and I wanted to build my own crowdfunding platform. In doing research I realized there were hundreds of platforms; it was already crowded, confusing. So I decided to do more of a directory, a reviews site, to differentiate between which ones are good. It seemed like a needed service.
I have a business degree and I worked in IT for 10 years and I thought, That’s something I can do. I talked to a lot of experts in the field and they were also interested in this idea. It took me 3 weeks; I built the website, launched it, and reached out to platforms. A lot of platforms are small and niche and they want more exposure and they said, ‘We’d love to be featured on your site.’ Right now, I’m the only full-time employee, but I do have a few people working part-time on various tasks.
TCF: What particular need do you fill that, say, Crowdsourcing.org doesn’t?
AF: I talked to Carl [Esposti, the founder of Crowsdsourcing.org] before I started. His website has a listing of platforms, but no good way to filter and sort them and no user reviews. People compare me to a Yelp directory, a resource to figure out which website has the best user reviews. With a couple of clicks of a button you can sort by number of reviews, or monthly visitors, and do a side-by-side comparison to see who has the lowest fees. I love Crowdsourcing.org’s industry reports, they are focus on news for crowdsourcing and crowdfunding, directory is not their main focus. I focused only on crowdfunding directory and reviews.
TCF: How do you get the information about each platform that you put on CrowdsUnite?
AF: For the big sites like Kickstarter and Indiegogo I went there myself and got the information. For other sites, I email them and about half of them respond back, and those are featured. Or some people email me; they find me and they want to be part of the listings. More and more are contacting me and I’m becoming a little more picky. Now I don’t accept platforms that just launched. I want to make sure we feature quality crowdfunding platforms, so they need to have at least 10 successfully funded projects … Having a service like mine reduces fraud. These are real-people reviews and articles that we link to; it shows [each listing is] a real platform.
TCF: How do you attract reviewers to your site?
AF: It took me a couple of months to get the first review. The way we did it, a person running a campaign asked us to feature them on the website. We actually launched a Projects section on the site where we reach out to projects and we feature them on our site and in turn we ask them to review their experience [with whatever crowdfunding platform they used]. So it’s real people, real projects, and we link to the project as well. We make sure these are real people who ran projects, whether or not they were successful. It’s very important that the reviews on our site are legit and from people who really did use the funding platform.
We initially focused on the big reward plaftorms—Kickstarter and Indiegogo—and I now want to get at least 10 reviews for each platform, which is tough because some platforms are very niche and some equity platforms have only a few projects now. These reviews don’t just give you a rating, they provide good feedback—stuff [the platform] did that was good, bad, and they give good advice.
TCF: Do you have a target of when you’ll have nearly all or all of the current platforms on CrowdsUnite?
AF: We’re adding more. We focus on the U.S., but we have a couple of international ones. And also, we’re trying to add more high-quality platforms, which have successful campaigns. I think there are about 1,000 platforms out there right now, internationally. We’re slowly adding each one to our directory.
TCF: Does the feedback you get from users reveal anything that might surprise us, or surprises you?
AF: The thing that surprises me is that we have 86 reviews for Indiegogo, which is a lot of reviews, and one thing that a lot of people complain about is Indiegogo’s service; some people can’t find a phone number to call, and their response rate is very bad with emails. It looks like they don’t have good customer service. When I looked at some of the reviews it makes sense because [Indiegogo] has thousands of projects and [the poor customer service] makes sense because they have a small team.
People ask me for advice about platforms all the time, and I say, try Kickstarter, then try RocketHub, which has gotten much better reviews on my site than Indiegogo.
TCF: Can you talk about the trend in crowdfunding moving toward niche, hybrid, and white-label crowdfunding platforms?
AF: I wrote an article about that. It depends on which value you get from the platform. The value [of a platform] can be broken down into a couple of parts: first, how much traffic you’ll get from the platform itself, not from the people you invite. That’s something you see with Kickstarter a lot; they can bring a lot of traffic from their platform. If 5 percent of your project’s traffic comes from Kickstarter itself [versus those you personally invite], it’s cost-effective to pay their fee. With other platforms I don’t see the value so much.
… Another value is customer support [meaning how much the platform will help you to improve the odds of success with your campaign]. Some of these niche platforms provide other values. Indiegogo and Kickstarter, all they do is funding; they are generic platforms. But Pubslush does crowdfunding for authors and that’s their niche. They’re the only platform that does authors and because they focus on that they can provide additional services to the authors; not only do they help you raise the money, they help you with the publishing of the book as well and getting it to stores and selling the book through their site. Those are additional services that these niche platforms can do that generic platforms can’t.
For movie-related platforms, once you raise the money, you can distribute the movie through their site; it’s like Vimeo and YouTube and crowdfunding together. They bring value not from traffic side but from the additional services they can provide…
Hybrid usually refers to a site that does equity and reward crowdfunding … they’re not very popular right now, but I think it’s a really interesting trend.
TCF: What’s next for CrowdsUnite?
AF: My current goal is to add many more quality platforms to the site and have at least 10 reviews for each of them. I want to get some experts on [CrowdsUnite] and maybe provide educational material for people to get to know different crowdfunding platforms and help people connect to quality professionals … There are a lot of people out there calling themselves a crowdfunding expert or marketing expert and saying, ‘I want to promote your campaign,’ and I don’t know how good they are; they need to be vetted. They could be fraudulent and just take people’s money. You want to know exactly what’s out there, how much are they charging, and what are you getting back if you’re paying the money. Is it worth it? Which videographer do you use? You might need help with marketing since it’s all about reaching the crowd.
You have to make sure that they provide a quality service if you’re going to be paying the money. It’s important to be able to vet these companies and basically what I’m trying to do is have CrowdsUnite become a resource. What Rose [Spinelli, the founder of The Crowdfundamentals] does and what I do are complementary to each other. My goal is not only to help people find a platform, I want to help connect them to experts like Rose for marketing, videography, and other services, and make sure their campaign is successful.
That’s the number-one goal … I want people to come to my site first, before they go to Kickstarter, and help them decide, do you want to use Kickstarter, Indiegogo, or maybe if you want to raise a lot more money, maybe you should use equity? I want to provide educational material and experts who can help them.
Check out CrowdsUnite.