Crowdfunding presentation01(English ver.)

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http://www.slideshare.net/junkoy/crowdfunding-presentation-10252011-ver

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Crowdfunding presentation01(English ver.)

  1. 1. 10.25.20111 personRaising $ 100,000Collecting $ 100From 1,000 peopleCrowd Funding
  2. 2. PROFILEJunko YAMAMOTORepresentative Director of Arts Marketing Co., Ltd.Senior Visiting Researcher at Keio Research Institute at SFCExecutive Director of Museum Career Development Network* 10 years experience with (online) game industry* Web marketing, Web producing, etc.* After leaving the company studied Art Management at a graduate school.* Specialized in utilization of IT and social media by art organization.* Current activities- Planning, creation, and production of contents and projects using web,mobile, and social media.- Planning and management of workshops and talk events related to art,creative works, and business management. Etc.
  3. 3. Today’s Point In crowd funding There is a possibility which does not exist inregular fundraising / support.
  4. 4. That possibility is… For people who havenever funded a project before to fund the project
  5. 5. Before going into“Crowd Funding”
  6. 6. The biggest difficulty for a Non-profit organization when raising fund is…“There are more important and urgent matters than that”
  7. 7. Fundraising up till now: Target people who have the potential of becoming fans and ask for their support.And ask for their continuing support.
  8. 8. “There are moreimportant and urgent matters than that”
  9. 9. Fundraising up till now: Select people who may become fansBuilt a relationship with them on a mid to long term.
  10. 10. What are the possibilities of crowd funding…?
  11. 11. Having a handful of highly motivated people and a massof barely motivated ones used to be a recipe forfrustration.The people who were on fire wondered why the generalpopulation didn’t care more, and the general populationwondered why those obsessed people didn’t just shut up.Now the highly motivated people can create a contextmore easily in which the barely motivated people can beeffective without having to become activists themselves. Clay Shirky “Here comes everybody: the power of organizing without organizations”
  12. 12. Crowd Funding might be… “can create a context more easilyin which the barely motivated people can be effective without having to become activists themselves.”
  13. 13. What isCROWD FUNDING?
  14. 14. Not to collect funds from small number of investors and wealthy people…
  15. 15. But to collect fund from large number of people. (usually using the web)
  16. 16. So many ways to call themAnd many ways to use them Micro Finance Social Lending P2P Funding… ???
  17. 17. Let’s reorganize it first.
  18. 18. Contribution Financial to society Product Investment
  19. 19. Around 2005Contribution to society Borrowers: People of developing countries Return: Repay without interest Micro Finance Micro Lending
  20. 20. Around 2006Financial Product Borrowers: People who need to borrow fund Return: Repay with interest Social Lending P2P Lending
  21. 21. Around 2008Investment Borrowers: People who want to invest Return: Varies Crowd Funding
  22. 22. Crowd Fundingdid exist from before
  23. 23. 1997USD60,000 2004 USD50,000 2004-2009 GBP900,000
  24. 24. PlatformNow it is possible for anyone to create a notice page and make use of the online payment system.
  25. 25. Investment If the project succeeds, they will receive money in Type return.Purchase If the project succeeds, they will receive goods and Type services in return. Donation No return. Type
  26. 26. After 2 years of their establishment(April 2011) KS raised funds in total of approx. USD53,000,000 About 1.9 times 6 months after that (October 2011) total fund raising amount was approx. OVER USD100 million
  27. 27. After 2 years of their establishment (April 2011) KS acquired approx. 590,000 backers in total About 1.7 times6 months after that (October 2011) total number of backers was approx. 1,010,000
  28. 28. Number of successful projects Over 13,000 Approx. USD20,000 raised every week Approx. 75,000 new supports every month
  29. 29. How doesCROWD FUNDING work?
  30. 30. Project Owner* Project* Goal amount* End date* Return Pledge (or donate) Backers
  31. 31. All or Nothing
  32. 32. Let’s look at someproject examples.
  33. 33. Projects that are likely to succeed are…
  34. 34. Message* We can remake iPad nano into a world’s coolest watch.
  35. 35. Message *We believe in the power ofcommunity or individuals, born in theprocess of making our ideas happen. *By promising that you’ll buy this watch, you can turn this product into reality.
  36. 36. Return for the backers*$25→TikTok worth $34.95*$50→ LunaTik worth $69.95*$70→TikTok+LunaTik*$150→TikTok(KS limited version)+LunaTik*$500→ TikTok(KS limited version)+LunaTik +iPod+5 silver TikTok
  37. 37. How were they able to raise so much?
  38. 38. Pre-order model“If the order exceeds a certain amount, we will make the product.”
  39. 39. Feeling of “I want this!” Rather than“I want to support”
  40. 40. So even if it exceeds the target amount Funds keep coming in.
  41. 41. On the other hand, types we see for artists and art organizations are…
  42. 42. Piggybank Model“We want to create this, so please support us.”
  43. 43. Even if you reach your target amount…It is VERY DIFFICULT to exceed that amount largely.
  44. 44. So is it impossible for artistsand art organizations to raise funds to create something they want…?
  45. 45. Not true.
  46. 46. Let’s look at someproject examples.
  47. 47. Message* Raising question toward recordlabel of today.* Strong belief towards deliveringtheir music directly to people whowant to listen to it.
  48. 48. Message* “Power to the new generation”kind-of-work ↓ Satisfaction towards using crowd funding
  49. 49. Return for the backers (examples)*$10 →Digital fopy of the new song before its release*$25 →Digital copy of the new song before its release+ CD delivered on release date*$100 →Invitation to a secret party+CD+Poster*$150 →VIP invitation to a secret party (can talk to the artist)+Limited CD+Poster*$350 →VIP invitation to a secret party +Limited CD with your name in the liner notes+Poster
  50. 50. Return for the backers (examples)*$1 →Access to private live stream of the drawing session.*$20 →Access to private live stream+ original cut from the final work*$100 →Access to private live stream+ Original cut from the final work (signed)*$750 →Access to private live stream+ Original cut from the final work (signed) of your choosing
  51. 51. The key to their success is… They are taking in the Pre- order Model Return to backers: The pledge amount and“I want this!” is well balanced.
  52. 52. Purchase rateUnsuccessful project 63%Successful project 84% 96.6%Big Successful project (1) 98%Big Successful project (2) The projects data of those in the “Recommended” corner of “Fine Arts “category in July 2011
  53. 53. The more attractive the return is, the more likely it’ll succeed.
  54. 54. To attract many supportersyou have to grab their hearts by making them “WANT!”
  55. 55. Mechanism of Crowd FundingPeople don’t take actions only because they want to “support”.
  56. 56. CROWD FUNDING How is it differentfrom the regular fundraising?
  57. 57. The biggest difficulty for a Non-profit organization when raising fund is…“There are more important and urgent matters than that”
  58. 58. Regular rundraising: Target people who have the potential of become fans and ask for their support.And ask for their continuing support.
  59. 59. Regular fundraising: Select people who may become fansBuilt a relationship with them on a mid to long term.
  60. 60. Having a handful of highly motivated people and a massof barely motivated ones used to be a recipe forfrustration.The people who were on fire wondered why the generalpopulation didn’t care more, and the general populationwondered why those obsessed people didn’t just shut up.Now the highly motivated people can create a contextmore easily in which the barely motivated people can beeffective without having to become activists themselves. Clay Shirky “Here comes everybody: the power of organizing without organizations”
  61. 61. Pre-Order…Return… Purchase…Support because I want it…?
  62. 62. Characteristics ofCrowd Funding supporters
  63. 63. Out of 1 million people who have supported a project… 170,000 are repeaters (16%)
  64. 64. Out of 170,000 over 66,600have supported more than 3 times (40%)
  65. 65. Example:Neil Graham (in UK) has supported 101 times in 5 months.
  66. 66. Why do people repeatsupporting projects?
  67. 67. The key to Crowd Funding could be found in the answer.
  68. 68. GamificationTo utilized mechanism of agame in an application or awebsite which is not a game.
  69. 69. Effective game-feel design can be found in the purchase type Crowd Funding website.
  70. 70. Elements of a game* Game environmentAn environment where regular rules are not valid for a limited period of time.* BoundaryBoundary between game environment and regular life.* RulesRules which are valid only in the game environment.* ToolsSomething that contains information about the game.* GoalA condition that decides where the game ends. Dave Gray, Sunni Brown, James Macanufo. “Game storming A Playbook for innovators, Rulebreakers, and Changemakers”
  71. 71. (1) Game environmentAn environment where regular rules are not valid for a limited period of time. Service of crowd funding itself
  72. 72. (2) BoundaryBoundary between game environment and regular life. Everything is within one project page.
  73. 73. (3) RulesRules which are valid only in the game environment. All or nothing rule etc.
  74. 74. (4) ToolsSomething that contains information about the game. Numbers that is updated in real time, icon of supporters etc.
  75. 75. (5) GoalA condition that decides where the game ends. Time limit, Target amount
  76. 76. What the project owner experiences isthe same as that of a game.
  77. 77. Process of a gameImagination of the world : Fix the goalConstruction of the world : Decide theruleBeginning of the world : Start the gameQuest of the world : Head towards thegoalClosing of the world : End the game Dave Gray, Sunni Brown, James Macanufo. “Game storming A Playbook for innovators, Rulebreakers, and Changemakers”
  78. 78. The supporter buys the right
  79. 79. The supporter only buys the right first – the project owner does now own the money yet.The supporter follows the process of the project together. They become part of the project.
  80. 80. And also…
  81. 81. A Design tocaptivate the supporters
  82. 82. (1) Visibility of the progress(2) Arouse positive feeling(3) Encourage social activity(4) Build engagement Amy Jo Kim. "Smart Gamification: Social Game Design for a Connected World".
  83. 83. (1) Visibility of the progressGoal and achievement, Deadline, Progress of supports, etc.
  84. 84. (2) Arouse positive feelingUsing PR videos, etc.
  85. 85. (3) Encourage social activitySupport, Share in social media, Click “Like” button, etc.
  86. 86. (4) Build engagementPromise returns, report on project updates, Comments, etc.
  87. 87. What does this“gamification”bring to people?
  88. 88. “Epic Win” Jane McGonigal (Game developer, Researcher)
  89. 89. Epic Win An excellent result…which you didn’t think it was possible until you reached it.which shocks you of your possibilities when you reach it.
  90. 90. Epic Win Epic win creates a story by adding value to what you are doing and who you are. So…People feel deep satisfaction achieving a difficult task. ↓ Reason why people play games.
  91. 91. Nobody wants to change how they live justbecause its good for the world, or because weresupposed to.But if you immerse them in an epic adventure andtell them, "Weve run out of oil”.This is an amazing story and adventure for you togo on.Challenge yourself to see how you would survive. Jane McGonigal (Game developer, Researcher)
  92. 92. YEAH !!
  93. 93. So my point is…
  94. 94. For example, Neil Graham (in UK) who backed a project 101 times in 5 months…
  95. 95. Why do they repeatsupporting a project?
  96. 96. As a thesis…
  97. 97. Crowd funding serviceThey offer a “place” where people can create a fund raising game easily.
  98. 98. Repeaters (supporters) They are enjoying a game called fund raising by “purchasing”and end up “supporting” them as well.
  99. 99. Purchase Rate Repeater RateUnsuccessful Project 63% 38%Successful Project 84% 51%Big Successful Project (1) 96.6% 79.6%Big Successful Project (2) 98% The projects data of those in the “Recommended” corner of “Fine Arts “category in July 2011
  100. 100. Differences from theregular fund raising scheme.
  101. 101. Introduction Regular fundraising You know what the problem is. Some set the target amount, but mostly they want to collect as much as they can. Many do not set a deadline. You cannot see who else is supporting it. Crowd Funding You know what the aim is. You know the target amount and its progress as of now. You know the deadline. You can see who many are already supporting/not supporting it.
  102. 102. Ways to support Regular fundraising Donation of money From the moment you make a donation, the money is delivered to the fundraisers. Crowd Funding Mostly purchase of a return. Until it reaches its target, it is just a promise to purchase and the money has not been delivered to the fundraisers yet.
  103. 103. Progress Regular fundraising Basically, you do not know the progress in real time. You let the fundraisers handle it. Crowd Funding You know the progress in real time – if/when they have reached the target or not (if your support is effective or not)
  104. 104. Result Regular fundraising You basically wait for the result from the fundraisers. There are no targets so you have no sense of accomplishment When you see that large amount has been raised, you think “Thank god!” (relief). But the sense of large or small is subjective. Crowd Funding When you access the web, you know when and how much it has accomplished in real time. When it is accomplished, you think “Yeah!” (excitement).
  105. 105. Conclusion
  106. 106. The possibilities ofCrowd Funding are…
  107. 107. *Plenty of game-feel to it.*More and more people are enjoying that.
  108. 108. Enjoy the game by “purchasing”, and “also” support it.Compared to regular fundraising, it’s a different state of mind and a new type of consumption.
  109. 109. So it is possible to turn people who were never interested in “supporting” into supporters withouthaving to become “activists” themselves.
  110. 110. And anyone can be a project ownerif you have an internet.
  111. 111. Of course regular fund raising scheme is very important as well.
  112. 112. Regular fundraising scheme One-on-one relationship buildingCrowd funding as an another option Do not think of it as the same way as regular fundraising.
  113. 113. (1) Visibility of the progressGoal and achievement, Deadline, Progress of supports, etc.(2) Arouse positive feelingUsing PR videos, etc.(3) Encourage social activitySupport, Share in social media, Click “Like” button, etc.(4) Build engagementPromise returns, report on project updates, Comments, etc.
  114. 114. MAKE USE OF THEM!
  115. 115. Thank you for listening! twitter : @artsmarketingjp

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