Prefundia wants to help crowdfunding projects get backers before they launch their campaigns. The startup, for startup it is — launching out of U.S. accelerator Boomstartup this summer — has been operating in beta for the past three months, and has just released some early performance data as it opens its doors to the public.
Prefundia said 195 projects have used its platform since June to publicise their crowdfunding campaigns before launch, and it’s claiming that projects using this auxiliary on-ramp to generate pre-launch momentum have been successful 71 percent of the time.
Its site showcases forthcoming crowdfunding projects — offering hosting space for photos, videos and text info on a project in the works. There’s then an option for Prefundia users to sign up to be alerted when the project launches its funding campaign.
It’s a pretty simple idea. But if Prefundia can get decent traction, it could because a useful platform for makers to test their ideas — to see whether a minimalist wallet made of papier-mâché or a plug-in disco-ball for your iPhone is actually worth the time and effort required to try and siphon off some crowdfunds.
“People certainly do use the platform to test viability of projects,” says Prefundia co-founder Daniel Falabella. “Here’s one we know is using it for that purpose. In fact, we’re developing a component for the creator dashboard which will compare a project’s stats to all others on Prefundia in order to benchmark and give a clearer indication of demand.”
A successful crowdfunding campaign takes a lot more than luck. A great idea, a well-presented project with the right level of detail, and judicious use of social media to promote your campaign are all key ingredients. Timing is also important. And lady luck inevitably plays a part, too. Getting this recipe right is never going to be an exact science.
According to recent data covered by my TC colleague Darrell Etherington, Kickstarter’s average success rate for crowdfunding projects is less than half (44 percent) of listed projects. Indiegogo doesn’t report an official success rate, so estimates vary — from around a third (34 percent), to a mere 9.3 percent if you factor in the projects delisted by the site for failing to raise $500 (albeit Indiegogo disputes both estimates).
Whatever the official success rates for the biggest crowdfunding platforms, there’s still clearly a large proportion of projects that flounder and sink without a trace. And a sizeable chunk of those are probably dead in the water because they deserve to be. For every good idea hitting the crowdfunding trail, there are many more mad-cap crazies running around cap in hand.
Prefundia’s 71 percent success rate may sound impressive, but its data sample is very small. Also, it’s not clear how much money the campaigns were seeking — obviously, as a rule of thumb, the smaller the funding target, the easier it is to achieve.
Prefundia does say that its users have raised $2.5 million since the launch of its platform. Doing a quick back-of-the-envelope calculation to generate a per-project average (assuming that all the projects using its platform went on to attempt a crowdfunding launch) that comes out at just over $18,000 raised per successful project (138 of the 195 total being successful) on average. And while $18,000 may be all you need to get the ‘revolutionary’ ZipTie to market, tech projects typically need a lot more funds to fly. But of course that’s just a flat average.
Prefundia does single out one example, the gStick Mouse project, which used its platform to help relaunch its project after initially failing on Kickstarter. Second time around the gStick was able to raise $23,901 on the first day, and hit its $40,000 goal on day two. It ultimately garnered close to 4,000 backers and took in almost $130,500 in 16 days.
Early crowdfunding momentum tends to beget more success as projects that raise money quickly tend to attract more attention — both from the media and also from users, being as media attention can help a project bag a slot in the “most popular” categories of crowdfunding sites — which in turn gets it in front of more potential backers, owing to greater visibility on the homepage.
It’s that virtuous circle of kicking a funding campaign off with a big bang which ripples out and generates even more bucks that Prefundia is aiming to engineer. “Kickstarter’s ‘popular’ algorithm heavily favors projects that gain traction very quickly (see Kickstarter’s ‘popular’ algorithm hacked here), so projects that build a lot of momentum before they launch and then drop it all into their crowdfunding campaign on the first day do much better than those who don’t,” adds Falabella.
Prefundia is free for forthcoming crowdfunding projects to list on, and isn’t currently taking any cut of successful projects, so there’s no reason not to give it a go — apart from the time required to upload a few media assets, etc.
“Monetization plans are on hold until the first quarter of 2014 but will include partnerships with manufacturing brokers, marketing firms, crowdfunding sites, etc — relationships and deals are already tested and inked,” says Falabella.
He names LaunchRock, which offers services for startups such as landing pages where beta users can sign up, as Prefundia’s main competitor but argues Prefundia stands out on merit of its focus being exclusively on pre-launch for crowdfunding projects.
He also argues it has a lower barrier to entry, because there’s no need to buy a new domain to add a project to Prefundia, and claims the platform can drive more traffic to a crowdfunding page “by consolidating all pre-launch pages into a single platform and encouraging cross-pollination”.
Time will tell on the latter point, since it’s not clear how much traffic Prefundia is pulling in to its own platform as yet. It’s also going to need to keep ramping its traffic up to be able to keep generating the big bangs it promises as more projects land on its own pages. At which point, it may be time for a pre-pre-funding startup to step in.
Or for all the crazy crowdfunding projects to realise they are drunk and go home.