Three years ago Crowdfunding industry was at its infancy, the JOBS act just passed, and funding campaigns were starting to get into the news. Every week a new platform was born and really quickly there were hundreds of new sites. I quickly realized that this business space would explode which will create a lot of confusion for small businesses. I felt there will need to be one place online where people can go and get clarity. They will need help picking the best possible site for their crowdfunding project. Some platforms could be better for certain categories or regions or offer different features that are important for their campaign. This is how CrowdsUnite was born.
Initially when we launched we only offered reviews for crowdfunding platforms. The vision was to be something like Yelp where every platform will show their CrowdsUnite user rating. Unfortunately, this did not have a big hit and only a few platforms ever showed the CrowdsUnite ratings on their site. The way we were going to monetize the business is by offering platforms premium membership for advance statistics and for platforms to have the ability to advertise on our site. That didn’t work out, because once the dust settled, it turned out that 90% of all people used just a few crowdfunding platforms. Few platforms that were making money like KickStarter and Indiegogo don’t really care about ratings and others are too small to pay us. A few platforms bought advertising and one had set an affiliate service where we get compensated on the traffic we send them. Overall charging platforms turned out not to be a good strategy.
That same year, I launched NYC Crowdfunding Meetup to connect platforms, and experts to those trying to raise money in NYC. We organized many networking events where CEOs of different platforms came and spoke to the audience. I got to meet some very interested people in the industry which helped me with my journey. We had educational events series where we charged users $10-$20 and brought many interesting speakers like CEO of Rockethub, and experts on how to make a video, market the campaign, legal and accounting. These events took a long time to put together and at the end of the day weren’t that profitable. Now I either promote other crowdfunding events and classes which I teach at NYC Business Solution.
As CrowdsUnite gained traction, it was featured in Entrepreneur magazine. With all of this exposure many people started to approach me for advice on crowdfunding. Initially I was simply giving advice for free but it was taking a lot of my time. I decided to launch a consulting service. My expertise is very unique as it focuses on finding the best platform for launching a campaign. I had a few clients a month but I noticed that after talking to them for the first hour going over their campaign and recommending a platform there is not much else I can help with. I’m not a campaign manager or marketing guy. In addition, the consulting business is not scalable and is not what I wanted to be doing long term. I ended the consulting business after a year.
The next plan to monetize the site was to try a freemium model for the users. I had over 10,000 users visiting a month without any marketing. I decided to offer the basic site for free but if the user wants to read more than one review or filter the platforms more than one criteria they will need to subscribe to a plan which was $10/month. The problem is users don’t need more than one-month access to the site. So I had a few dozen people sign up but they canceled pretty quickly. I shut down the subscription model after six month.
I’m in the business of helping people with crowdfunding. I help them realized what they need to be successful, such as having a large dedicated audience and a compelling high quality video. I’m not an expert in building a crowd, marketing, or video making so I usually refer them to others. Initially I build a listing of marketing and video production companies that users can rate. I couldn’t really monetize it since not all of them had referral fees. I picked a few of the experts that I knew where providing good quality service and created deals that users can purchase right from CrowdsUnite. Different packages could be bundled together for additional savings. A full package of video production, crowdfunding class, consultation from me, list of journalist to contact, and a professional written press release cost about $2000. That’s substantially cheaper than going with a campaign manager which can cost tens of thousands of dollars and they take additional 20-30% of how much you raise. I have been running these funding services for over a year now and 90% of purchases are for promoting existing campaigns and cost under $50. I’m either not attracting users at the point where they are building their crowd, they are not convinced they need the services, or they are not comfortable spending that much money without additional validation.
Starting this month CrowdsUnite will take the next evolution step, I’m removing the funding services that we offer. Majority of the work in the campaign needs to be put in “before the launch” and this is where the next services that we will offer come into place. We want to help campaigns managers in the pre-funding stage when they are building their campaign and community. To connect them to resources that help them improve their campaign and reach new people. For them to launch when they are certain they can reach their goal. I believe this is where we can provide maximum value for our users. I look forward to this next stage of CrowdsUnite.