At the beginning of this month, Indiegogo rolled out new Trust & Safety programs, including a Crowdfunding Trust Alliance with GoFundMe (The Verge describe GoFundMe as Indiegogo’s ‘rival’, which is a bit of a stretch – the two platforms tend to run very different types of campaigns)
I talk a lot about how backing a crowdfunding campaign is a huge leap of trust, given the lack of restrictions/oversight/consumer protections involved (and, therefore, why creators need to take every opportunity to build trust with their audiences). It’s fair to say that Indiegogo in particular was starting to build a bit of a reputation for those ‘revolutionary!!’ product campaigns which never actually delivered (whether that’s through creators’ accidental mismanagement or deliberate deceit is always hard to pin down).
Despite the problem with any kind of ‘trust and safety’ initiative (having to explain to your customers that actually you are trustworthy is usually a challenging start!), this sounds potentially very useful, just in terms of clarifying what creators and backers can expect from each other.
But I’m waiting to see more about how it’s going to work in practice, and whether it’ll in effect prioritise (for example) large companies using crowdfunding as a pre-sale platform over independent creators. Some of the best and most exciting and innovative campaigns come from first-time crowdfunders – and if they get frozen out because of increased risk aversion, Indiegogo’s platform will be poorer for it.
I thought this was an insightful point (from The Verge’s piece) , though: “Entrepreneurs, however — especially those seeking to raise money — have been incentivized to oversell their ideas and present them as groundbreaking or revolutionary, a mindset with which most crowdfunding backers are unlikely to be familiar. That can create something of a gap in understanding between the two sides.” Are Indiegogo planning to get creators to scale back their Big Claims? (not unlike Kickstarter’s guidelines on ‘Honest & Clear Collaboration’) Or, are they effectively going to spend more time and energy on educating backers and putting roadblocks in the way of them handing over money? Because that would make for a very interesting business decision.
It does sound at this stage like Indiegogo’s route may rely heavily on seeing returning crowdfunders as inherently trustworthy; bigger businesses and organisations, with money to throw behind product launches and targeted advertising. “Our Trust Loyalty program will highlight new campaigns from entrepreneurs with a track record of success and tailor our vetting to match the historical risk level of these entrepreneurs.” says Will Haines, Indiegogo’s VP of Product & Customer Trust.
It’s a very difficult line to walk – to give businesses, especially start-ups or non-profits, the freedom they need to say ‘hey, we’re raising money for this, we think it might work – who’s in?’, while also giving backers a reasonable level of protection. I don’t envy any of the platforms having to figure it out. But I’m not convinced that relying on repeat crowdfunders will, in the long term, help either Indiegogo or backers.