Tag Archives for Kickstarter
If you have not heard about Wahooly yet, you will. It is the first “social” incubator to use the registering of quality followers as a strategy to help startups build brand value and equity. The company launches its initiative tomorrow at midnight.
What does it do? Users trade their social influence to act like beta users for new startups. At exit, there is a conversion strategy that will convert that particpation and influence-sharing into equity that is paid out at the company’s exit. An example from the Wahooly web site.
Let’s say that a new socially-driven photo sharing service is in need of initial users. They would contact Wahooly. We would ask them a series of questions, determine their potential in the marketplace and negotiate a percentage of equity that they’ll provide to these initial users.
Once the details have been ironed out, we send the opportunity for you to check out. If you like it, you signup. If you don’t like it, you do nothing and wait for the next one.
For the sake of the example, let’s say you liked it.
Now, this new startup offered up 5% equity for 5,000 users. That means that you, along with 4,999 other users all own an equal share of that 5%. Not too shabby for simply signing up.
What if you wanted a bigger piece of that pie?
As a shareholder, you hold the key to how much of that 5% you own. These startups are looking for active users, but more importantly, users that are willing to become advocates for their brand. So, using our secret formula (aka: a real geeked-out algorithm), we track how big of a brand advocate you are. This is real-time tracking that you can monitor at any time by accessing your personal dashboard on Wahooly.com.
Your dashboard will provide you with the latest information on all of the startups you have a share of, along with your piece of pie. (Tracking it will be your new addiction.)
How did the team at Wahooly come to this conclusion and what did they do to shift the company’s offering to do this? The story line is interesting. We pick this journey up at the Wahooly Google+ page. Through trial and error, the Wahooly team learns, or decides, that “numbers of users” is really not that useful to a new company. It’s actually the quality of the users.
Version two came together about the time that a Minnesota business plan competition (MN Cup) was accepting entries. We submitted a plan that essentially did the same thing as version one, however we incorporated the notion of social sharing. In other words, if you signed up, you became part of an equity pool. But, you could increase your portion of the equity by sharing it online. Again, there was a problem with the idea. The notion that sharing is valuable is based on the assumption that influence can truly be measured by RTs and follows. We’re not convinced. By the way, we never made it past round one of the competition. What a shame.
It wasn’t until a bit later that we realized that we weren’t actually proposing to deliver users at all, in fact, that really isn’t all that valuable to companies. I mean, ultimately, that’s what they become, but our value proposition is that we’re delivering acceleration via advocates. It’s a quality not quantity equation. We needed to build a system to bring the best out of influencers, which is what most companies struggle with. The key was the power of combined influence, which is how trends begin.
Most worthwhile companies get a fair amount of tweets, mentions, posts, etc., but the tipping point is when those actions can occur concurrently and repetitively. In general, there is little sustainability when it comes to brand advocacy in users, attention is fleeting. Just like in traditional advertising, messages need to be repeated before actions are taken. What we’re talking about is delivering 1,000 mentions over a single day rather than over a year. And then repeating that behavior.
In the end, we decided that, we’re not delivering users, we’re delivering acceleration in the market.
The Wahooly post doesn’t say how they got to this idea. That’s the thing we would want to know, since that would tell us something about how their values found a sweet spot in the market, in a place where there was non-consumption. we know the place of non-consumption. It’s in the place where they realize there is a quality vs. quantity differential that is not being taken advantage of. But what was the feedback?
We’re not into guessing here, but understanding this will tell us something about the value that went into this equation to come up with this ingenious idea.
We’ve been curious about Kickstarter, the crowdfunding company. Why do entrepreneurs turn to crowdfunding, and why particularly is Kickstarter attractive to them?
I’ve been interested in the psychology of how funding-seekers choose Kickstarter. What are they trying to fund, and is what they are funding a lot different than what other entrepreneurs, who are choosing other means of funding, are doing? How does the Kickstarter choice feel on an emotional level? What does someone doing this go through from start to finish, or, in some cases, as they try to reach that funding cap?
We interviewed Corvus Elrod, a self-described “narrative designer,” who sports a really stylish mustache. Corvus has funded two projects through Kickstarter. One of them, a tabletop storytelling platform called Bhaloidam, is still in the process of seeking its funding trigger. Here are some of the reasons for his choosing the platform, and his description of what the experience has done for him.
What are the projects?