When you think of crowdfunded projects, you probably jump to weird gadgets, niche boardgames, and high-tech coolers made by a couple of people in their garage. You don't think of polished products by GE or new games by Hasbro, both of which have plenty of money to fund their own work.
"We've always had larger companies reaching out to us over the years."
But that's exactly who Indiegogo intends to start courting. It's announcing a new service today called Enterprise Crowdfunding, which is essentially a help program that Indiegogo will offer to large companies interested in crowdfunding their next project. Companies that sign up will get Indiegogo's assistance in picking out the right project to crowdfund, setting up and optimizing their campaign, and promoting the campaign once it's up. Enterprise customers will also get additional analytics. Otherwise, their campaigns will look exactly the same as everyone else's.
"We've always had larger companies reaching out to us over the years," says Jerry Needel, the Indiegogo exec in charge of corporate partnerships. "Earlier this year it really popped. It's a very clear trend that we're seeing now."
Indiegogo isn't suddenly opening the door to large companies — the door has always been open to them, if they wanted — but now it's formalizing the process and encouraging them to join. Needel believes this is a huge opportunity for established companies: rather than spending money on market research before building a product, Needel suggests that companies can just crowdfund their more unusual ideas to see if anyone is interested. There's little risk, since companies walk away with the money, and they can rely on the very people who are buying the product for feedback on how it should be made.
Large companies want to test weird ideas, too
That's how Needel sees Enterprise Crowdfunding being used the most. "It could be they have a prototype and want final feedback to ensure there's demand before they hit production and invest tens of million in tooling," he says. "Or it could be closer to launch, and they want to test [advertising and pricing] before they go to market."
Indiegogo has already worked with GE and Hasbro to launch crowdfunding campaigns. One GE campaign, for a countertop ice maker, raised over $2.7 million earlier this year. With Hasbro, it's collaborated on contests to select and crowdfund different game ideas. A third partnership, with Anheuser-Busch, resulted in Shock Top funding and promoting three existing campaigns.
It's easy to imagine that smaller members of the crowdfunding community won't be pleased with the entrance of major companies. While you can argue that GE lends some legitimacy to the space — it's a lot less likely that GE will fail to deliver a product — people may feel that it's drawing attention away from smaller names or taking advantage of consumers; GE ought to have the budget to build its own products, after all. Kickstarter saw a similar backlash after Zach Braff used its platform to fund a new movie, though that debate has, to some extent, subsided. At the time, Kickstarter said it had no problem with the campaign, since it was still about funding a creative work. It also said that major campaigns bring new backers to the platform, who then go on to back smaller projects. For Indiegogo, Needel says, "We haven't had any issue with the community reacting negatively" so far. "If anything, it's been the opposite."
Same platform fee, but key campaign tips (and sometimes placement)
Still, large companies may have an edge if they sign up to work with Indiegogo. They can get specific tips on when to launch their campaign and how long their video should be, with Indiegogo looking back through all its data to help maximize their success. Large companies can also pay for special placement on Indiegogo's site, making them more discoverable than other campaigns. On the other hand, large companies' campaigns will still work just like anyone else's, and they'll pay the same 5 percent platform fee, too. (That's on top of the fee they'll pay for the actual Enterprise Crowdfunding services.)
It may still seem strange to imagine GE funding its next products on Indiegogo, especially since we usually expect secrecy from big companies. But maybe backers will enjoy seeing how similar established companies can be to everyone else: they have some weird ideas, some great ideas, and some awful ideas — they just want your validation. Oh, and your money.