Some Crowdfunding History: 3 Lessons from Lady Liberty
Crowdfunding has been around long before the internet. The definition of crowdfunding given by Crowdsourcing.org is financial contributions from online investors, sponsors or donors to fund for-profit or non-profit initiatives or enterprises. It is typically divided into 3 types of models:
(1) Donations, Philanthropy and Sponsorship where there is no expected financial return
(3) Investment in exchange for equity, profit or revenue sharing.
A great historical example of a donation model is the Statue of Liberty, which raised $102,000 in 1885. Around 80% of those donations were below $1, now that is a movement! Joseph Pulitzer was responsible for making this push by printing the request in his newspaper the New York World. No internet, no television commercials, no YouTube. Just a piece of compelling copy. He was appealing to the everyday American by saying, “Let us not wait for the millionaires to give us this money.” Pulitzer also promised that if you donated, your name would be printed in the newspaper. Who doesn’t want their name printed in the paper? I know my mom still has my newspaper clippings from high school! What is even crazier is that the French raised $250,000 from it’s citizens to build it in the first place. French and American citizens were united by the idea of freedom and justice for all.
This is the spirit of crowdfunding. It is a group of people getting behind an idea and supporting it with whatever they have to give. We are currently in a place where we can generate ideas and share them at a much faster pace than in the 1880s. However it is spreading the ideas between people that remains the most fundamental aspect of crowdfunding. Even today when you look at the most successful crowdfunding campaigns they involve an element of a united front.
What can we learn from this story?
A) It is important to hinge your crowdfunding campaign on an ideal.
An ideal to which people will immediately connect. Star Citizen, a game that raised $37 million through crowdfunding, claims that the PC game is still alive. For the PC gamers this is something to get behind, especially in a time when new gaming consoles like XBox1 and PS4 are released. The ideal can make a campaign a sensation when it resonates with the community or fizzle into the obscurity of the internet when it evokes a half hearted response.
B) How you communicate this message is important.
Pulitzer wrote a short and engaging piece for his newspaper. He tugged at the heart strings of Americans at a time when they were just 20 years removed from the American Civil War. He showed that people were already behind the idea and that you even as a small investor had a chance to be a part of history. What better way to show your Patriotism than to invest in a monument that demonstrates American idealism? For any crowdfunding effort you must communicate the message concisely and precisely.
C) People need to understand what they are getting for their money.
The people who gave their hard earned money knew a couple things would happen when they made their pledge. First they were going to get their name printed in the paper. People get excited to see their name! Second people knew that if they raised enough money then this monument would be erected and stand forever. They would have the opportunity to view the statue so they could enjoy it for years to come. Short term and long term value is being offered in this instance. It is important for people to see what they get now and what they will get later.
We may never see another opportunity like this to create a monument for an entire country. It is clear though that whatever the campaign it must make people feel that warm, tingly feeling you get when you hear, “life, liberty and the pursuit of happiness”.
P.S. If you are a nerd you can read more about the history below:
The French Connection http://www.nps.gov/stli/historyculture/the-french-connection.htm
Joseph Pulitzer http://www.nps.gov/stli/historyculture/joseph-pulitzer.htm
Statue of Liberty History http://statueofliberty.org/Statue_History.html