Regardless of the type of campaign, and whether it be on a “pledge-model” platform or one that facilitates investment, crowd funding initiatives must straddle the emotional and rational motivators to attract people to support a campaign. And there is a clearly defined link between where the supporters come from and their motivation to support a crowd funding campaign. It is the ability to incorporate science (what we know or the logical motivators) with art (what we feel and how we are motivated emotionally) that brings about crowd funding success.
In the raising of capital or support for a campaign by way of pledges, the “ground floor” is occupied by the project creators, founders, shareholders, directors, management, and trusted advisors. It is the inner core that creates the basis for the movement to begin and the spread of support to commence. All inertia begins here based on what they have created, what they use to attract their followers, and how they go about communicating their funding efforts to “the crowd”. It is the inner core’s ability to understand the need to put forward emotional and logical drivers that will largely determine to what extent the call for funding will extend.
Beyond the “inner core” is what is termed “the first tier”. This tier is inhabited by those people closest to the inner core, largely friends, family, fans and followers of the project creators. The “Four Fs” usually have a strong personal tie to the project initiators or to the niche associated with the project, and therefore are primarily motivated by emotional drivers. It is essential that the project creator quickly engages followers from the first tier to give the campaign credibility and to signify to the broader community that it is alright to follow and pledge their support. They validate the campaign and make it OK for others to follow. This is where the movement is created or lost.
The second tier is then the friends of friends. This is where “tribes” are formed, and their engagement is largely dependent upon an introduction or specific link from people in the first tier. As such, there is less of a direct link to the project creator, so the emotional motivators to support the campaign are not as strong, and logical reasons start to come in to play. There is usually a tangible and traceable pathway from the second tier back through involvement from the first tier and then back to the project. Often members of the second tier will have an affinity with the sector or the nature of the project, e.g. they will support a technology-based campaign when introduced to it if they have an affinity with technology.
It is engagement with the third tier where the real money comes in. It is the connection with “smart money” or angel investors, VCs, private investors, or sophisticated accredited professionals that really starts large volumes of cash being invested or pledged to the project. At this stage there is little in the way of a personal connection to the project originators, and the want to invest or support is largely financially motivated. In the case of “pledge-model” campaigns and platforms, the case is the same in that the motivator for the third tier to get involved is more of a logical reason than the emotional reason that drove the initial support from tier one.
The most successful crowd funding campaigns motivate both the emotional and rational supporter through a skilful balance of science and art. The closer the supporter is to the first tier, the more emotional the motivator needs to be. The further you move from the project originators means the inducement needs to change from the emotional to the rational and logical. The project initiators must quickly engage the Four Fs to get on board for the emotional reasons (“If you really love me, you’ll pledge your support”), and this initial support will give credibility to the campaign and give others comfort that it is OK for them too to jump in and support the campaign. Once inertia starts and if the first tier can be reminded to spread the word to the second tier and so on, word will reach the cash-rich third tier, and it is engagement with this group of funders that will ultimately lead to crowd funding success.
1. Thanks to Paul Neiderer of ASSOB for his discussion and debate that drove much of the content of this blog
2. Whilst investment crowd funding is not available or heavily governed under legislation in many parts of the world, I have referred to it here as examples only, and such references should be taken to demonstrate the way in which campaigns can be supported in any manner – investment, pledge, or otherwise. It does not indicate that investment crowd funding is available or lawful in your part of the world, and guidance should be sought from a suitably qualified professional before embarking on such a project.