CROWD­FUND­ING

Small-town en­trepreneurs may have an ad­van­tage rais­ing Kick­starter cash

BC Business Magazine - - Contents - By Mar­cie Good

Do small-town res­i­dents have an ad­van­tage on Kick­starter?

In June 2014, Colin Pick­ell, a cof­fee shop man­ager in Lady­smith, set out to raise $7,000 on crowd­fund­ing plat­form Kick­starter Canada. He wanted to pub­lish his chil­dren's book, called Who Will Tuck Me Into Bed?, and he needed money to hire an il­lus­tra­tor. Af­ter a 30-day cam­paign, Pick­ell had ex­ceeded his goal by $221.

A month later, Van­cou­ver­based en­trepreneurs Mark and Paula Lam­ming launched a Kick­starter cam­paign to gather $50,000 so they could re­open their pop­u­lar Whistler bak­ery, Pure­bread, which had been de­stroyed by fire. They fell far short, achiev­ing only 8.55 per cent of their goal. (The Lam­mings found other means of rais­ing cash; they've since opened a lo­ca­tion in Gas­town and two in Whistler.)

How does an as­pir­ing small­town chil­dren's book au­thor cash in when an es­tab­lished busi­ness with a loyal fan base can't? Peo­ple from smaller com­mu­ni­ties seem to fare bet­ter on the plat­form, ac­cord­ing to Jor­dyn Hrenyk, who just pub­lished an aca­demic pa­per ex­am­in­ing who wins on Kick­starter. “We found it was par­tially be­cause the Van­cou­ver­based cre­ators had a harder time build­ing off­line ex­cite­ment and get­ting their projects out be­yond their per­sonal and pro­fes­sional net­works,” she says.

Hrenyk, a pro­ducer at web ser­vices firm An­imikii In­dige­nous Tech­nol­ogy, took an in-depth look at four B.C.based Kick­starter cam­paigns as a di­rected study in her fi­nal year of a bach­e­lor of com­merce de­gree at Uvic's Peter B. Gus­tavson School of Busi­ness. Her pa­per, com­pleted in 2015 and su­per­vised by pro­fes­sor Re­becca Grant, re­cently ap­peared in the Jour­nal of Strate­gic In­no­va­tion and Sus­tain­abil­ity.

Al­though Pick­ell's cam­paign had a smaller fi­nan­cial goal than Pure­bread's, his com­mu­nity backed him more en­thu­si­as­ti­cally. The au­thor re­ceived pledges from the pa­trons of his café; ad­ver­tis­ing from his son's school district, which in­vited him to do read­ings; and cov­er­age from the Lady­smith Chron­i­cle and his On­tario home­town news­pa­per, the Goderich Sig­nal Star.

In con­trast, the Pure­bread own­ers hes­i­tated to bug peo­ple about help­ing their cause. The Lam­mings also found that as po­ten­tial con­trib­u­tors, their cus­tomers didn't seem to un­der­stand why a suc­cess­ful bak­ery would need to crowd­fund, a con­fu­sion that wasn't helped by their video and other in­for­ma­tion about the cam­paign.

Hrenyk notes that projects that get lots of cash are few and far be­tween. In May 2016, Kick­starter re­ported that slightly fewer than 36 per cent of all projects had been suc­cess­fully funded since the plat­form's 2009 in­cep­tion, and 14 per cent never re­ceived a sin­gle pledge. The en­trepreneurs who thrive on Kick­starter aren't afraid to sell, Hrenyk con­tends.

“You have to bring the crowd to your project; the crowd is not go­ing to find it,” she says. “There's in­for­ma­tion over­load on th­ese plat­forms. You have to guide peo­ple to it, just like any other busi­ness.”

GOT ANY DOUGH? Pure­bread bak­ery came up short on Kick­starter

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