Interactor
My experiences in creating a crowd funding platform
Years before I called myself a script editor, I was first and foremost a specialist in online content and social media marketing. I have built and managed large tourist websites, written hundreds of articles, managed content and moderated tens of thousands of fans across multiple fan pages at a time. I also know an awful lot about crowdfunding. How? Because I have built and developed one from the ground up and used it to raise money for independent films.
After the 2008 financial crisis wiped out a lot of banks, access to easy credit and investment opportunities became substantially harder to find. People who had money were quite rightly very risk averse. Crowdfunding suddenly became the word on everyone's lips. For people who didn't understand, it was literally described as FREE MONEY.
If you know nothing about Crowdfunding it works like this: Using a platform (Kickstarter or Indiegogo were the only real games in town when I was doing it) you pitch your big idea or project. It could be a prototype, a useful product, a video game or sometimes a film project and ask "the crowd" to help you raise the funds required to make it a reality.
You set a realistic target for what monetary requirements are needed to complete this project. Maybe you need 20k, maybe you need 200k and you also set a time frame to achieve that target. You then use the platforms template to create a compelling campaign using all the tools at your disposal, a catchy video pitch, technical details, photos, etc.
Instead of a couple of traditional investors who will front all the cash in return for probably owning about 50% of your company or product, you instead reach out to your target audience and people you know to pay smaller amounts to fund your project. Instead of two investors offering 50k each, you attempt to have maybe 500 contributors (they are not investors) who put in a hundred each.
Depending on the quality of the idea and how well you use social media, message boards etc. to market it, it can either explode or implode. Some terrible projects have raised millions over their target goals and some really good ideas haven't raised a single penny. Having worked with people on their campaigns I can tell that people massively underestimate how much work is actually involved in running a campaign, its actually exhausting. For the vast majority it is not easy money.
Contributors are NOT Investors. They have no rights on your intellectual property, but you have to offer them something. These are usually called Perks. Your project page will have perk tiers depending on the amount donated. If someone donates $1 it might just be a literal "Thank you!". However if you have a tier at $500, it will probably include multiple copies of the finished product, maybe a video thank you, maybe a limited edition t-shirt. It's up to you really. Half the appeal to a contributor is what you are willing to offer.
Once you go live with your campaign, then the clock starts ticking and you have 30-60 days to raise your funds. There is no reset.
The crowdfunding platform itself acts as go between to hold any funds in its coffers until the time limit is up. Depending on the platforms terms and conditions, if you fail to achieve your goal all the funds are returned to the contributors, others let you keep whatever you have raised. The all or nothing model makes more sense as if you need 50k and only raise 20k, then you probably can't fulfil your campaign promises.
In return for facilitating your project and banking facilities the Crowdfunding platform usually takes a flat commission of your project. It can be between 1 - 10%.
If your project is successful you take your funds to make your project a reality and then have to make good on all the free t-shirts and things you have promised. Some people do a great job, some people don't. The system is open to dishonesty and opportunism and I am sure you can research plenty of cases where people have raised millions and then not delivered on any of them. That's an article for another time. I also find that more and more gofundme campaigns seem to want something for nothing too.
The problem was that Kickstarter and Indiegogo were the only reputable platforms in 2012 and already bloated with projects of every sort. Too many. So we felt that there was a gap in the market for exclusively crowdfunding films. So we decided to build our own.
Independent film creators always need a bit more money. Whether its to pay a debt, pay for a trip to a film distribution fair or just clear some music, there's always something. As an independent film company ourselves we were in a unique position to help multiple projects raise funds whilst offering additional support in the form of access to distribution networks, potential angel investors, tax incentives, fanbase management and more. It seemed like a natural fit for us. We would help films raise money, build some karma by being helpful and approach any projects we really, really liked to invest personally. It was all a very good idea on paper.
So I started working with a small team to build the first version of our platform. We didn't have an awful lot of money to spend on the trial version so the programming team worked out of Romania and our graphic designer worked from London. I was in Berlin orchestrating the various parties and explaining what I wanted from the backend. It took about a year to reach the launch version.
I think the final results were really good. The design at the time was distinctive and the interface relatively user friendly considering the sheer amount of customisable options we offered. As usual there were a million glitches and bugs for me to identify and pass along to fix, but the project submission system and payment gateway worked. The bugs were things like photos only uploading one at a time or annoying time outs if you were trying to edit content in real time, but these I could work around. It was by submission only in the beginning to keep the quality high, so I would personally review anything film looking for money anyway.
We had some great facilities to offer our projects that were quite unique at the time. As well as places to post your videos and content. There were chat facilities to engage with your fans and a lovely little program we adapted that allowed you to queue up all your posts across about 50 types of social media and post it all at once with a single button. Smart phone apps were only just starting to really catch on and we even had an app for buying credits to spend on the films you like.
The only thing I regret is I had my blackberry hooked up to the payment notification system so that I could see it was all working in real time and it literally used to ping hundreds of times a night much to my annoyance.
That and bloody Twitch.com
See we were friends with the guys who created Twitch and they let us have a dynamic real time widget on their homepage for free that led to our site. Turns out Twitch gets a lot of traffic and by loading that widget on their homepage we were using an insance amount of our servers allocated bandwidth. gigs and gigs worth. The hosting company was always suspending our site and I had to keep upgrading and upgrading until we were running off a server that cost as much a month to use as our site cost to build.
We had about 20 films on Interactor at launch of varying fanbases and quality. We had a small launch party at Berlinale 2011 and tested the waters before we would really start pushing the thing. In all we had a three month period where we able to actually operate as a crowdfunding site. During that time i helped about a dozen projects raise about $100,000 between them.
Then just as soon as we were starting to fully understand what we were doing, something (as usual )happened.
We hit a massive legal snag. We were a German based company and new legislation was currently being passed around to regulate crowdfunding. Basically it was to do with the grey area of if money is exchanged is it actually a donation or an investment and how should it be taxed?. Are people owed anything if it fails?, who is responsible?, Etc. It was something that could leave us wide open to all kinds of future lawsuits. I honestly don't remember how it turned out, maybe someone in this area can let me know.
People also couldn't differentiate between Interactor the platform and the projects as separate entities. When a couple of these projects failed to deliver on perks they had offered, I was inundated by dozens of angry emails personally blaiming me as moderator and wanting money back as they thought we were part of it.
So we just had to stop and wait to see what happened, unfortunately I didn't have that kind of time on our hands and I had other things to be getting on with.
I still think Crowdfunding is a good way to raise funds, but like I said earlier, its a lot more work than you imagine. You need to be as lucky as well as resourceful.
Gallery
Interctor Design
It's a shame Germany's lovely need to regulate everything within an inch of its life to protect people from any sort of risk led to Interactor's demise. Here are a few of the page designs showing how the site worked.
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