Indiegogo CEO on Crowdfunding During the Pandemic
Indiegogo’s Evolution and the Future of Crowdfunding
Andy Yang assumed the role of CEO at Indiegogo during a period of significant change. Concurrent with a leadership transition due to personal reasons, the crowdfunding platform also underwent workforce reductions. Having recently transitioned from Reddit, the new CEO faced less than a year at the helm before the onset of the global COVID-19 pandemic.
A Maturing Platform
Now in its 13th year, the San Francisco-based platform has grown in parallel with the development of online crowdfunding. Indiegogo has been a direct observer of the industry’s successes and challenges. While the platform has facilitated numerous million-dollar campaigns, it has frequently been compared to Kickstarter, a service widely recognized as a leader in the crowdfunding space.
Yang engaged in a discussion regarding the changes at Indiegogo under his leadership, the evolution of crowdfunding, and its potential future in a post-pandemic world.
(This interview has been condensed for brevity and clarity.)
Initial Objectives as CEO
What was your primary goal upon becoming CEO?
My previous role at Reddit focused on core product development. When Indiegogo’s board and founders contacted me, they were seeking someone with product experience and a strong understanding of community building. The organization was undergoing a reevaluation of its fundamental values.
Upon assuming leadership, my focus was on solidifying those core values, identifying target segments, and determining our product strategy. We’ve spent the last two years concentrating on what we call “bringing the crowd back into crowdfunding.” Many platforms have become overly transactional, leading backers to expect instant gratification, similar to the experience offered by Amazon.
Re-emphasizing the Crowdfunding Premise
The core principle of crowdfunding differs significantly. Backers should understand that perk delivery may not align with initial timelines. Educating backers and nurturing the community is central to our mission. Despite the challenges of the past two years, including COVID-19, we have maintained profitability, allowing us to control our direction and invest in crucial areas like trust, safety, and community.
Was the company unprofitable when you joined?
Initially, we were not profitable. After my arrival, we achieved profitability, or at least a neutral financial state. A change in leadership naturally led to some personnel changes, effectively rebuilding the company overnight. We’ve been strategically adding staff over the past two years, always prioritizing profitability and maintaining control of our future.
Achieving Profitability
Beyond personnel changes, what steps were necessary to achieve profitability?
We focused on optimizing our sales pipeline and ensuring a diverse range of campaigns across various categories. While tech and innovation, particularly consumer electronics, remain our core strength, we’ve explored opportunities in areas like comics, travel, and outdoors. We’re actively identifying growing categories where our brand resonates with both entrepreneurs and backers.
A key shift involved focusing on the backer experience, something we hadn’t prioritized previously. Drawing on my experience at Reddit, we aimed to re-engage the community in new and meaningful ways.
Engaging with Backers
What does it mean to connect with backers, and how do you cultivate those relationships?
Without backers, crowdfunding platforms wouldn’t exist. We collaborate with entrepreneurs to foster community building, encouraging them to engage their initial supporters and generate excitement for their campaigns. We provide support with storytelling and community development.
Internally, we emphasize being “campaign-agnostic” or “campaign-independent.” Our goal is to cultivate a love for Indiegogo beyond individual campaigns, engaging backers through content, our blog, and social media channels, showcasing the journeys of our entrepreneurs.
Addressing Past Failures
Many associate crowdfunding with campaigns that failed to deliver rewards or were abandoned. How can you regain the trust of those who have had negative experiences?
We acknowledge that our platform has experienced failures. Over the past two years, improving trust and safety has been a primary focus. This begins with education, clarifying that crowdfunding is not simply shopping. We prominently display this message during the checkout process, countering the expectation of immediate delivery fostered by companies like Amazon.
For those who have been burned, we take responsibility. We partner with entrepreneurs to ensure consistent communication with backers throughout the campaign lifecycle. Transparency regarding challenges, such as chip shortages or supply chain disruptions, can foster understanding and leniency.
Streamlining the Project Approval Process
Historically, it has been easier to launch a project on Indiegogo compared to Kickstarter. Is this changing?
Yes. We are committed to enhancing our processes. We’ve been implementing changes behind the scenes that we will announce soon. We recognize the need to improve our platform. We actively monitor feedback from communities like the Shitty Kickstarters subreddit and aim to incorporate that perspective into our vetting process, fostering dialogue between the community and entrepreneurs. This reflects a broader shift in the tech industry towards greater platform responsibility.
Shifting Expectations
Could changing expectations and the relationship between backers and entrepreneurs involve de-emphasizing rewards and adjusting those expectations?
We are at a pivotal moment regarding the reputation of crowdfunding and addressing perceptions of Indiegogo’s reliability. We are implementing features and platform changes to enhance trust and safety. We want to be judged by our actions.
While rewards remain a key incentive, we’re seeing a segment of backers motivated by a desire to support innovative projects. This presents an opportunity for more formal expectations between backers and entrepreneurs, potentially exploring pre-order models.
The Global Fast Track Program
What is the Global Fast Track program?
It’s a concierge service for companies and entrepreneurs in the Asia Pacific region, particularly China, and now launching in Japan. We provide comprehensive support, including storytelling, visual assets, and copy, to ensure a successful campaign launch.
Why was this program launched in Asia, and could it expand to other markets like the United States?
We launched in China to bridge cultural and language barriers and address the complexities of global launches. There was significant demand from entrepreneurs in that region. We believe this model is scalable to other geographies and already collaborate with select campaigners to enhance their success.
Differentiation from Kickstarter
When you took the job, differentiating Indiegogo from Kickstarter was likely a major concern. After two years, how has your perspective evolved?
Initially, the answer was that each platform excels in specific market segments or categories. Indiegogo is known for tech and innovation, while Kickstarter is popular for creative projects like board games and comics. GoFundMe focuses on donations, and Patreon caters to the creator economy with a subscription model.
Our differentiation lies in providing a comprehensive ecosystem and supporting entrepreneurs throughout the entire lifecycle. Our breadth of campaigns, focus on tech innovation, and hands-on support are unparalleled.
The Impact of COVID-19
How has COVID-19 impacted Indiegogo and crowdfunding in general?
It was a net positive for us, accelerating our business, particularly in categories where we were strong. E-bikes, health and fitness products, and home-based solutions experienced a surge in demand. We were pragmatic and prepared, leveraging insights from our team in Shenzhen to anticipate the challenges of a lockdown environment.
Navigating Component Shortages
How does your platform’s flexibility address worldwide component shortages?
Clear communication and realistic expectations are crucial. Entrepreneurs must be transparent about potential challenges, and we aim to provide tools and features to help them set appropriate expectations. This is essential for maintaining trust and safety.
Long-Term Implications of the Pandemic
Do you foresee any long-term implications of the pandemic for crowdfunding?
It’s difficult to predict, but we’re observing shifts in campaign types and categories. We’re seeing increased interest in green tech, reflecting a growing desire to build a sustainable future.