Showing posts with label crowdfunding tips. Show all posts
Showing posts with label crowdfunding tips. Show all posts

Friday, 4 April 2014

Crowdfunding critical journalism, and why it's good for democracy

(Note: I originally wrote this article for Contributoria as Crowdfunding Critical Thought, and it is republished here under a Creative Commons license. To republish please attribute original)

Greg Palast’s approach to investigative journalism can be summed up in one phrase: Stand up for the underdogs, and take on the fatcats. His hard-hitting reports on corporations like ExxonMobil, politicians like Bush, and shadowy institutions like vulture funds stem from an impulse to challenge those players with the power to bend the rules to their private advantage. That’s why functioning democracies need people like Palast.

Such a role faces two unique challenges though. Firstly, powerful institutions and individuals tend to hide behind walls of secrecy that extend over vast geographical space. Investigating a corporation, or a government spy programme, requires a lot of time, a lot of travel, and a lot of prying into hard-to-access information sources.
Secondly, it entails a lot of risk. People like Palast by necessity must make corporations, governments, and powerful individuals very angry, but those are also the parties that have the most ability to hire expensive legal teams to intimidate challengers. They also frequently own the media outlets, or have the most ability to buy the advertising space that media outlets rely on for income.

Therefore, not only is investigative journalism the most expensive style of journalism, but it is also the most likely to incur further liabilities once a story gets published. Providing finance to underdog investigative journalists – fronting them money to go off in search of stories – has always been a risky undertaking.

In an era when media groups are under increasing financial stress then, the position of the investigative journalist is under threat. Pressure to deliver advertising click-throughs, for example, drives online publications towards shallower stories with limited shelf-lives. I call this FMCJ, for ‘fast moving consumer journalism’. Like fast moving consumer goods, the aim is to create a high volume of low cost media product to be quickly consumed and discarded.

Rather than prioritising investigation and analysis, FMCJ journalism rewards content that draws short-term attention whilst inspiring minimal reflection. It thus has much in common with the field of marketing, with the same use of catchy taglines and graphics to churn social-media sharing. Most journalists don’t want to be marketers though. They want to do meaningful reporting that makes a lasting impact. To do this, they need new outlets for publishing, and new ways to finance themselves.

Alternative model 1: Project-based journalism crowdfunding

So where does Palast get his financing from? He draws at least part of it from the Palast Investigative Fund, a non-profit fund that individuals donate to in order to support his ongoing muckraking. In essence it’s a personal crowdfunding site, enabling him to remain independent.

Drawing on one’s readers for direct financial support has grown much easier in an age of digital communication, and established crowdfunding sites like Indiegogo have been used to this end already. For example, Peter Jukes recently raised £14 552 on Indiegogo to live tweet the UK Phone Hacking trial. Likewise, journalism startup Matter raised $140 201 on Kickstarter, allowing them to fund long-form pieces to be published on the Medium platform. Indiegogo and Kickstarter are generalist platforms for raising money, but even more interesting are those sites that offer niche services and support for journalism in particular.

Take, for example, Indie Voices, which aims to match up independent journalists in the developing world with readers – or ‘social investors’ – who wish to fund them. The Indie Voices team curates the process, only allowing media projects (including documentaries and articles) that seek to improve the media landscape in developing countries. Projects can then seek contributions in the form of donations, and, in the future, in the form of no-interest loans, low interest loans and equity investments (where funders buy ‘shares’ of ownership in a media project such as a film).

A second example is Inkshares. Unlike Indie Voices, which is explicitly political in nature, Inkshares is open to anything from science writing to children’s stories. Initially set up with the aim of creating an equity crowdfunding platform for books, Inkshares now also provides a donation-based crowdfunding platform for thoughtful long-form articles. And unlike normal publishing, the author retains the rights to the work that gets funded, which means they can also publish the material elsewhere.

Alternative model 2: Subscription-based crowdfunding

The shortcoming of sites like Indie Voices though, is that they’re really geared towards once-off projects. What if you wish to run a year-long investigation of tax havens, during which time you plan to run a series of 12 articles? Do you try raise the whole lot in one go, or run 12 separate crowdfundings?

One startup with an interesting solution for this is Beacon Reader. Rather than funding a once-off project by a particular writer, Beacon Reader is a platform for writers to collect paid subscribers who will offer an ongoing stream of support. While a normal crowfunding project only succeeds if a minimum amount of money is raised, a Beacon Reader crowdfunding campaign succeeds if a certain amount of people (normally 25-100) pledge to pay you $5 a month on an ongoing basis, in exchange for ongoing access to your stories, but also access to all the other stories on the site.

Backing a particular writer on Beacon is thus a gateway into a broader subscription to the work of the whole Beacon writer collective. It feels loosely like a kind of writers co-operative, but a competitive one in which writers have to earn their place (and a share of the resultant income stream) by securing a certain number of new subscribers (and to continue building more subscribers over time). Writers get 70% of their subscribers’ cash, and the surplus goes into a collective bonus pot to reward those whose stories receive the most recommendations, thereby incentivising consistent high quality writing.

Crucially though, the writer still owns the rights to the pieces produced, and they can be published elsewhere or sold on to media outlets to further monetise their work. This might be a great option for a writer looking to work through a big issue in small chunks, and who needs stable baseline support to cover their basic costs whilst waiting to get the pieces accepted by bigger publications.

A second attempt at a subscription model is Uncoverage, which is being set up by Israel Mirsky. Mirsky, recognising both the increasing marginalisation of investigative journalism, and professional journalists’ need for ongoing financing (‘serial funding’), is explicitly targeting the site at professional investigative journalists. Like Beacon, the goal is to establish a subscriber base for individual journalists, but unlike Beacon the ambition is also to create an ‘open, lean newsroom’ that provides a suite of key services like fact-checking, editing, legal support and technology solutions.

Alternative model 3: The ‘credit union’ approach

In the examples discussed above, the ‘crowd’ is mostly conceived of as readers who wish to financially support the quality journalism they enjoy. What if the crowd was given a closer role in the actual article production process though? That’s what Contributoria attempts to add in. When one becomes a member, you get the right to pitch articles to be funded, but also to financially support other’s articles, and to offer editorial advice to those who you’ve backed.

It thus has the feeling of a true writers’ co-operative, or perhaps a credit union for journalism in which members support each other. This very article, for example, was originally pitched on Contributoria, but in joining I got to vote for other articles I want to see, including Joel Benjamin’s guide to Freedom of Information requests, and Dom Aversano’s exploration of city soundscapes. This also gave me the right to provide input into those articles. As a user of the platform I am thus a hybrid between a receiver of funding, and giver of funding, a receiver of editorial services and giver of editorial services.

Right now though, Contributoria is in beta phase, and is free to join, which means it still hasn’t started asking members to pay dues. It will be fascinating to see how the process is managed going forward. Could it become a vibrant self-sustaining community of writers, readers and editors, or will members’ dues need to be supplemented with money from external sponsors? Another key question is how to incentivise members to devote time to checking each other’s articles. Could editors and writers team up to be funded together?

Democratic commons in commercial context

The diverse crowfunding platforms discussed above have a number of common themes. Firstly, they set themselves against both corporate-backed media (in developed countries) and state-backed media (in developing countries) by offering a technological means to decentralise funding, and thereby to ‘democratise journalism’.

Their claim to democratisation rests on the assertion that they both maintain independence of journalists, but also give voice to journalists that might otherwise be ignored. This message is complemented by the claim that this can be a sustainable way of financing high quality journalism (after all, a platform might be democratic, but that’s no guarantee of quality or long-term viability).

Secondly, the platforms are converging on a model of prepayment by some, for the common benefit of all. In contrast to the buyer of a magazine, who purchases content once it is produced (and thereby pays back the original financiers and publisher), the crowdfunding backer in essence prepays for material that will be developed in the future, and thereby brings production of the material into being.

That said, although the core body of funders bring an article to life, they frequently do not have exclusive access to the material, but rather subsidise the broader public who will get access to the stories too (via, for example, the articles being published elsewhere on a Creative Commons license). In essence, private individuals are holding the commons open for others to use, in much the same way as Wikipedia gets supported by donations from a small percentage of its users.

Interesting, and potentially conflicting, commercial dynamics emerge from this. We could argue that what the crowd is actually doing is shielding a writer from normal media commissioning processes – whether those are corporate or state led – maintaining the independence of the journalist to the point where an article is ready to be released into the public. In the cases where the journalist retains the rights to the article though, and the resultant piece is then sold on, we could also argue that the crowd is subsidising media companies who would otherwise have to take on the risk of commissioning work.

If this was to become widespread practice, we could begin to see a separation of journalism production from distribution. Platforms like Uncoverage might begin to serve a role analogous to a literary agent, providing a platform to develop quality journalism which is then cherrypicked by publishing outlets. We could conceivably even see the emergence of journalism ‘offtake agreements’, media companies offering advance guarantees to publish content if it gets initially funded by the crowd.

The reader as creative producer

But what kind of reader is prepared to fund articles which may then be used by the broader public or potentially even commercial media outlets? Perhaps it is a new sort of reader, seeking a more active, creative role.

The irony of our information-saturated era is that in the face of overwhelming amounts of content, people feel a sense of ‘opportunity cost’ to engaging with it, the perception that committing to reading anything must entail not reading something else which is also available. Thus, many people find themselves skimming a lot shallowly but reading very little deeply. It’s questionable whether a person browsing websites every day absorbs any more information than a person in 1897 with a single weekly newspaper.

The real question then, is how to create a society with wide access to diverse media, but one in which people actually engage with such media meaningfully. One might imagine, as a thought experiment, a giant benevolent foundation that funds all manner of amazing content, only to dump it into people’s already saturated Facebook newfeeds. True democratisation is not just about what content gets created. It’s about how people use and act on that content. Is an article about corporate fraud just another dramatic item in a stream of flickering entertainment passing by you each day, or is it actually something that might make you get out onto the streets to protest?

Creating a decentralised crowdfunding infrastructure perhaps offers one means of combining the creation of diverse content with a new means of connecting with it. People who have prepayed for content in the knowledge that they are helping to bring forth unique critical voices, are also people who wish to move past being mere passive consumers of media. Instead, they are hybrid producer-consumers with an interest in critically engaging with the content they helped bring to life. And perhaps it is in the development of this new type of participatory reader that the true democratic potential of crowdfunding lies.

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Saturday, 23 March 2013

Kickstarting the gogofactor: Top tips I learned from my crowdfunding campaign

My Indiegogo crowdfunding campaign for a finance activism school was a great success. I managed to raise double my initial target, which is a good sign. I also learned a few useful things about the process along the way, which I thought I'd share with people who're thinking about running their own crowdfunding campaigns. Here they are:

Choosing a platform
There are plenty of articles on what crowdfunding platform to choose, so I won't repeat those here in any detail. I used Indiegogo because it offered the flexible funding campaign - which means you get to keep whatever money you receive even if you don't hit your target. That was appropriate for me because the perks I was offering were limited edition copies of my forthcoming book (The Heretic's Guide to Global Finance) and in a sense I was pre-selling them at a premium to fund the School. Thus, even in the event of the campaign failing to hit its target, people still would have ended up with a tangible reward.

What you don't want in the case of a flexible funding campaign is a situation where your campaign doesn't offer a tangible reward (such as a book), and where you don't put sufficient effort in to actually reach your goal, because then you could end up with initial donors feeling like they've given you money for nothing. One reason to consider using a fixed funding platform like Kickstarter (where you have to hit your target to receive any money) is precisely because donors know that their money only gets used if a critical mass of pledges to donate is reached, which psychologically charges the process and demands more of the fundraiser.

Coordinating with Paypal
In terms of fees, Indiegogo takes a 4% fee as long as you hit your target. If you don't hit your target they take a 9% fee. This is supposed to incentivise you to aim for targets that you know you can achieve. In practice, Indiegogo takes a 9% fee directly from your Paypal account every time someone donates, and then once the campaign has finished they rebate money to you so that the fee ends up being 4%.

A few words on Paypal:

  • Firstly, with Indiegogo and other sites, you need a verified Paypal account in order to receive donations. This takes several days to set up, and entails a somewhat mysterious process of entering into a direct debit agreement with Paypal via JP Morgan Chase (hence all the internet queries from people who've found JPMC RE PAYPAL INTL listed in their bank account direct debits). 
  • Secondly, you also have to have a premier (or business) Paypal account - this doesn't cost anything, but it means Paypal can charge you fees for receiving payments. 
  • Thirdly, a few days into my campaign Paypal detected that there were abnormal amounts of transactions occurring and temporarily froze my account. I had to send them documents proving that nothing suspicious was going on, which was annoying and potentially could have slowed down my campaign. So, make sure that you have updated your Paypal account (e.g. by updating your password etc.) and convinced them that you are who you say you are.

Creating a pitch
I spent a lot of time writing my pitch, but my video wasn't really good enough. People didn't mind it, but I made it in a hurry and it could have been more lively and more interesting. I'm an individual trying to raise cash, so perhaps I got away with not having a professional video, but if you can create it, a good video will certainly pay off. In terms of the pitch, Indiegogo gives useful suggestions on what to include in its campaign template. Basically, tell people what you want to do, why you should be the one to do it, how they can help, and what they'll get, and do it in as few words as possible.

Calling in the crowds
The most important part of any crowdfunding campaign is to call in the crowds. You can have a fantastic pitch and awesome video, but ain't nothing going to happen unless you ask individual people to go see your site, and to help you share it (this point is important, because even if someone doesn't feel financially stable enough to contribute, they can certainly help spread the word). Here are six channels I used:
  • Channel 1 - Email: I started out by sending emails. Group emails don't work. Personal emails do. I also used this as a means to contact people who I haven't had a chance to catch up with for a while, so actually this was very useful regardless of whether people contributed or not. I probably sent around 100 personal emails, plus a couple group emails.
  • Channel 2 - LinkedIn: Not everyone is a big LinkedIn user, but I've got 500+ LinkedIn contacts, so this was an important channel for me. I only chose contacts who I wasn't personal friends with in life (I used Facebook for friends) and I sent about 95 personal messages here. I also prioritised this before Facebook, because more distant contacts take longer to respond in general and so need to be contacted earlier. Indeed, I got some contributions via LinkedIn, but mostly it was several days after I sent the messages.
  • Channel 3 - Facebook: I did a big messaging and posting blitz on Facebook. I've got around eight hundred friends on there, and I sent around 460 personal messages to people. Yeah, that sounds like a lot, and it was pretty time-consuming (by the way, I learned that if you send a load of messages on Facebook, they begin to suspect you're a spamming machine, and require you fill out CAPTCHAs to prove you're not, so try space the messages out).
  • Channel 4 - Reddit: I posted the campaign link to Reddit. It didn't seem to work that well, but Reddit is a slightly unknown entity to me that I have not yet mastered. I suspect this could be a pretty amazing tool if you can choose the right sub-reddit and get a campaign voted up a page. It's potentially worth trying other social bookmarking sites like Digg and Stumbleupon, though I know less about how those work
  • Channel 5 - Articles: I wrote a couple articles about this, one on Liberal Conspiracy and another on Max Keiser's site. I also got some coverage from Pluto Press and the Italian site Non Con I Miei Soldi. It's hard to quantify the impact of these, but certainly worth doing.
  • Channel 6 - Twitter: Twitter was a big source of traffic for me. I tweeted from my @suitpossum account regularly, encouraged others to tweet and finally, I sent direct messages to about 200 followers. In the direct messages, I wasn't asking people to donate, I was asking them to tweet the campaign out. That got a lot of twitter coverage for me, which is turn captured a few contributions from people who I have no personal connection with.
So all in all, I sent roughly 850 personal messages to get traction on this campaign. An important element was getting those contacts to share the campaign on social media so that strangers could see it. Indiegogo also encourages you to get social media activity going in order for their algorithms to assess the popularity of your campaign (what they call 'gogofactor'). I managed to get a fair amount of gogofactor, reaching the front page of their London section and their Education section, and I also managed to get on their weekly roundup blog. That said, it's hard to quantify the effect of this - I suspect that many people casually browsing Indiegogo are actually Americans, so for a London-based project the effects of that were muted.

Collecting the statistics

So who contributed to my campaign? I had 168 contributors, and here are the stats I've collected about who they were:
  • 68 friends: These are people who might have donated because they know me, or as a favour, or a combination of liking the project and knowing me. Roughly 26 were close friends, and 42 were more casual friends. They constitute around 40% of the total number of donators, but interestingly, only 35% of the money raised, suggesting that on average they gave smaller amounts than more distant contacts (then again, I don't hang out in particularly wealthy circles)
  • 43 (friendly) professional connections: These are people who know me personally through a professional context, but who wouldn't feel under any obligation to fund me. They constituted around 25% of total donators, and around 20% of total money raised
  • 57 distant contacts, and 2nd/3rd degree connections: These are people who I did not contact and who heard about the campaign via social media, friends and articles. Around half of these people are individuals who I have some knowledge of, such as followers on twitter, or people I've briefly met at a conference, or friends of friends. The other half are strangers. They constituted around 33% of total donators, but, importantly, around 45% of the total money raised, suggesting that they gave comparatively large amounts.
The moral of the story thus, is this: Your friends and direct connections will donate to campaigns, but larger amounts come from more distant connections who hear about it indirectly. This again highlights the importance of social media and getting your friends to share on social media.

Now to the business of starting it...
So, as you can see, I now double as a crowdfunding consultant. If anyone wants more tips, please feel free to email me (see address in the sidebar). Oh yes, and now I have to actually start the School that I raised money for. More about that to come in due course. Please feel free to share your own crowdfunding tips in the comment section. Cheers!