Play to the Crowd: The Technology of Crowdfunding
It was the mid-nineties in small town suburbia, and there we were – young girls decked out in girl scout uniforms – going door to door trying to solicit funds for a cause I don’t remember very clearly but that seemed important at the time. “There must be a better way,” I remember thinking to myself – exhausted by the endless walking on foot, the forced smiles of unwilling neighbours, the relatively small profits earned for all the effort invested.
Cut to 2015 – with the rise of the internet and the advent of social media, a few clicks today will get me further (so much faster) than my two tiny feet ever could. Now, in a fraction of a second, I can reach out to individuals half way across the globe. It is the advent of this technology that has also enabled the rise of a form of fundraising that harnesses the power of the many, to contribute to the vision of a few – one of the principle cornerstones of crowdfunding. As Anshulika Dubey – Co-Founder and COO of highly successful crowdfunding platform Wishberry says – “Crowdfunding cannot survive without technology and internet. Without these, we would be on the roads collecting money for our projects!” (smiles).
Much like we were, as hopeful young girl scouts.
By definition, crowdfunding is the practice of raising money for a project by having several people donate small amounts of money – a practice that dates back to the days of Lady Liberty (and even earlier), and that’s also being employed today by more and more individuals in the creative sectors. “Being a closeted classical singer and dancer myself, I have always rued at the lack of opportunities for artists in India,” continues Anshulika, “So I jumped at starting Wishberry the day I came across Kickstarter. Crowdfunding seemed like the only lifeline for the creative artists in the country, because it plays on the concept of bringing back patronage to the sector. In only two years of starting out, we’ve got a fabulous response; 200+ projects have raised over 4 crores from 10,000 funders across the world.”
“If you look at the evolution of crowdfunding, it’s grown very fast,” says Varun Sheth, CEO and Co-Founder of reputed Indian crowdfunding platform Ketto, “In the last one year, 300 million dollars across the world was raised in just music and movies. The internet has played a huge role in this – especially large media platforms like Facebook and YouTube that are drawing a large audience towards these campaigns and projects. We see these as a channel to get the story and the project out to audiences who we know want to support such initiatives, but who did not know about them earlier.”
Sheth founded Ketto as a platform to enable individuals to raise money for any project – artistic or otherwise. While the crowdfunding concept is still a relatively new phenomenon in India, he believes there is huge potential for its growth in the country with respect to the arts. “India is one of the top consumers of entertainment, and has a very large market in terms of regional films, music, and independent films – so there is ample opportunity for crowdfunding to play a role in ensuring there are more funding avenues for artists who do not want to participate in mainstream Bollywood.”
While the popularity of crowdfunding may be a relatively recent global phenomenon, as Rohith Subramanian (CEO/Founder of fundmydream.in) points out, the concept itself is nothing new. “If you look at the origins of crowdfunding, it’s been around since time immemorial. Before setting sail for the Americas, Christopher Columbus sourced money from different people; Barack Obama’s election campaign was partially crowdfunded; even the Statue of Liberty was made possible due in part to small donations from several residents. Crowdfunding has been around for a long time but recently has taken on new avatars – it’s like putting old wine in a new bottle”. Like Varun, Rohith also sees a bright future for the initiative in India – “Right now in India there are hardly three players in the market, and there’s huge potential to tap into,” he told IndiEarth. “And people aren’t just using crowdfunding for funds – they’re also using it as a marketing and promotional tool, to give visibility to their projects. It’s also a way for artists to connect directly with their fan bases.”
Rohith is also quick to acknowledge the role that technology plays in facilitating its rise in popularity. “Technology plays the most important role in any crowdfunding campaign,” he continues. “Because of the internet, I can draw awareness to my campaign in other countries too outside of India. Transferring funds for those who want to contribute becomes a simple process as well.” From Rohith’s perspective, the concept of equity based crowdfunding – though not yet legal in India – is the way of the future for the Indian market. “At the moment India’s only legalised with reward-based crowdfunding – so when I contribute I don’t get money, I get a series of rewards. Outside of India, there is also something called equity based crowdfunding – so if I put 100 bucks in to a movie, I get my share back. Now that would be a game changer in India – and if that takes over, I believe the regular way of crowdfunding in India will take a backseat.”
The future looks equally bright from Wishberry’s perspective, which has witnessed a steady growth in the number of projects and in successful outcomes over the years – “We started with getting one project a week, and now we’re at two-three projects a day,” says Anshulika. “In the near future, we see people warming up to the idea and taking the plunge. Crowdfunding for music, films and comics will be the most successful amongst all kinds of projects. Technology projects may take while to catch up to the speed at which the US is moving – that’s because our engineers are still in regular jobs like Infosys, Google, etc. They all need to get out of their shell and make crazy products! Also – most of our funding comes from India, which is surprising to many because unfortunately we don’t trust our countrymen to be good-hearted (smiles). But crowdfunding in India should restore that trust. In our experience, the Indian crowd is waiting to fund!”