California’s Indiegogo is an international fan-funding website that provides artists with an alternative way to raise money for their projects. The site is not limited to musicians, and is also used by various film maker, charities and small business, so M3 got in touch with the company’s co-founder and CEO Slava Rubin to find out more about how fan funding works…
M3 – First of all, could you tell us a bit about yourself, and what it is that you do?
Slava Rubin – I’m the CEO and co-founder of Indiegogo — the world’s funding platform — which provides anyone with passion the opportunity to fulfill their dreams and fund creative, entrepreneurial, or cause campaigns. The service has been used for over 30,000 campaigns and distributed millions of dollars in 200 countries. In 2011, Indiegogo was named one of the partner companies for Startup America, President Obama’s initiative to stimulate entrepreneurship in America.
Prior to Indiegogo, I was a Strategy Consultant leading growth initiatives for clients ranging from MasterCard to Goldman Sachs to Fedex. I started Music Against Myeloma, an annual charity event raising funds and awareness to fight this rare form of cancer. I’m also an advisor to Ubershare and Romper Games.
I’m a member of Renaissance Weekend and the KIN Global Summit (Kellogg Innovation Network), and a former member of the Young Leadership Fund of Chicago and currently a media advisor to multiple Jewish non-profits in NYC. I graduated with a B.S.E. from the Wharton School of Business. I loves food, film, travel and the World Cup.
What inspired you to start the Indiegogo site? What is your own musical background?
My dad died of Multiple Myeloma, Cancer of the bone marrow, when he was 15. I started a charity called Music Against Myeloma to raise money for Cancer research. While much of the initial reasoning was quite “selfish”, the process opened my eyes up to endless opportunities.
The frustration of using the Internet to raise money in 2005 had me asking, “why not make an easier way to raise money for anyone with passion?” After sharing this with Eric Schell and Danae Ringelmann, we decided to launch Indiegogo in January 2008.
Despite the 2008/2009 economy, we believed in the mission and the ultimate goal of democratizing fundraising. Being the son of immigrant parents from Belarus and being born there, I knew no other way, but to work hard, stays disciplined, and persevere through energy.
What would you say are the advantages and/or disadvantages the fan funding approach has over the traditional, top-down record company funding method?
Starting a crowdfunding campaign allows you to test out your marketing strategy and gives you room for trial and error in order to refine it. When someone validates your idea by putting money down, they’ve also just confirmed your target market. In the world of Twitter, Facebook, and targeted emails, it’s easier than ever to test your marketing message and approach.
Looking at the music industry, do you think fan funding is just as viable for amateurs and unknown bands as it is for famous bands and already established acts?
Yes, definitely. Anyone can use crowdfunding to raise the money they need.
Do you think fan funding could be the future of financing projects? Is it a viable alternative to existing revenue streams?
Yes. What excites us the most about Indiegogo is that it is a powerful marketplace and it does empower people to both get their ideas out there and also vote with their dollars for what they want to see come to fruition. Our perks model allows campaign owners to engage with funders in multiple ways, including giving them potential decision making power for their project. We have seen this manifest in the arts, small business, and even community related projects. As crowdfunding continues to pervade different arts and verticals hopefully this phenomenon of creation, as opposed to destruction.
Which fan-funding campaigns would you say have been your biggest successes?
George Clinton’s Fundraiser for C Kunspyruhzy and What Production Studios
Mr J. Medeiros and The Saudade Campaign– a fan based record label
Similarly, have you ever had a campaign that has failed to reach its target, and if so, what happens in this case?
Because Indiegogo is open to everyone and offers both flexible and fixed campaigns, there will always be examples of people that didn’t reach their goal. For example, if a campaign owner has a goal of $25,000 and just raises $23,000 that doesn’t mean that they won’t be able to achieve their goal, or that the campaign was unsuccessful. Just because a campaign doesn’t reach their monetary goal doesn’t mean its not successful.
Indiegogo offers fixed funding or flexible funding and charges the below breakdown per option:
flexible = 4% hit target, 9% if not
fixed = 4% hit target, no money changes hands, no charges if not.
The campaigns that find the biggest challenges are the ones that believe you can just post it and funders will come. No one wakes up in the morning and says “I wonder what zero funded campaign I can go give money to today”. A successful funding campaign will take effort and the more effort anyone puts in to it, the more Indiegogo will amplify them even further.
In how far has the Internet strengthened fan funding platforms?
The environment for today’s up and coming artist is more volatile than ever. Aspiring artists are faced with several new challenges: obtaining a loan continues to become more difficult, banks are refuting any application with less than two years worth of a track record, and credit card rates are continuing to rise.
While all this volatility is indeed challenging, at the same time, the marketplace for artists is actually more dynamic and exciting than ever. Thanks to the convening power of the Internet, social media, and online transactions, getting capital for your endeavor is actually easier than it seems.
With crowdsourced fundraising, anyone with a passion, idea, or cause can post their campaign on an online funding platform to raise capital for just about any goal.
What would be your preferred medium to listen to music (eg. Vinyl, CD, tape, MP3 etc.), and why?
Whatever is streaming on Pandora.
Do you think the digital age has rendered traditional concepts of copyright obsolete, or do you think they are still relevant?
They are still relevant. For example, George Clinton turned to Indiegogo to raise enough money to have the rights to his music and archive it. Being one of the most sampled artists, he wasn’t making any money off of it. Copyrighting is still important.
What do you personally believe the future of music distribution will look like?
It’s amazing how quickly things are changing in all these industries due to technology and ease of access, and I feel like its pushing the quality of music higher and higher and I’m excited to see how it goes.
Finally, what does the future hold for Indiegogo?
There are many exciting announcements and partnerships in the pipeline for Indiegogo. We pride ourselves on being an open and flexible platform. We can’t wait for the next big star to come make a name for themselves on Indiegogo.