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Equity Crowdfunding Works for B2B Businesses

Posted on March 19, 2020March 19, 2020 by Clive Reffell

There is a common misconception that crowdfunding is only applicabe to B2C businesses. On recently seeing a question posed on Quora, asking if anyone had got some examples of B2B startups that had used crowdfunding, there were three that immediately came to mind.

Energytech
A crowdfunded B2B business I have invested in is Pavegen. They generate sustainable electricity from people walking on their floor tiles which are installed in high-traffic places like shopping malls and sports stadia.

Their customers include transport system operators, and owners of shopping centres and sports and entertainment venues: Pavegen – Global leader in harvesting energy and data from footfall.

Transport infrastructure

Another B2B company that has used equity crowdfunding in the UK is MacRebur. They reinforce asphalt with recycled plastic to create a more resilient road surface, and help reduce the amount of plastic waste.

They have also resurfaced some airport runways, and recently announced a pothole repair material that will be available in 20kg bags: macrebur.com. Their customers include airport owners, local councils and highway authorities.

Agritech

To give a third example, I made an equity crowdfunding investment not long ago in an agritech business called Hectare. Traditional farmers’ markets in the UK are closing down at a rapid rate, meaning more and more farmers have to make long and arduous journeys to take livestock to market. And sometimes it means driving their fit and healthy animals through areas where there is a higher risk of disease.

Hectare provides online marketplaces for farmers to check current prices and sell animals at SellMyLivestock and crops at Grainindex. Their B2B customers are farmers and agricultural produce buyers: Hectare Agritech | Reinventing Farm Trading

Online shopping is hurting the high street, but new tech can also help bricks-and-mortar retailers

Posted on November 30, 2019December 18, 2019 by Clive Reffell

Many well-known retail brands have shut down in the past few years. We’re no longer dropping in to Maplins, Toys R Us, Oddbins, LK Bennet, Karen Millen, British Home Stores or Mothercare. And that’s just a fraction of the list.

Many others have already re-negotiated their rent costs, or are planning to do so, through CVAs (Company Voluntary Arrangements) to buy time to develop a new business plan that will cope with current pressures of reduced customer footfall, sales figures and profits that are largely held to be attributable to online shopping.

CVAs spread retailers’ challenges – ok, risks – to a wider community of corporate owners of retail space and their shareholders, such as British Land, Hammerson and the Intu Group. Those shareholders, indirectly, include millions of us through pension schemes and government investments. So when media headlines declare “the high street is dying” we ought to take note.

Though is it really dying, or is it a case of transforming to the new reality of a business landscape that now has to include a share of online shopping? Latest figures from the Office of National Statistics show 19% of all UK retailing is done online, and the figure is still growing.

Online shopping is hurting the high street, but new tech can help bricks-and-mortar retailers

It’s not the only factor that bricks-and-mortar retailers are having to deal with. The level of business being lost to online retailers is enough to tip many shop owners in to a danger zone, and other factors are under scrutiny. Many local council traffic and parking policies, for example, are based on deterring people from going to their local shops and high street, rather than encouraging them to make a visit.

Changes to the way independent retailers do business are clearly needed, though many people are instinctively resistant to change. Even those that do grasp the nettle, who are willing to change and face up to the costs of doing so, may not be able to work out the best options to choose. But they are on borrowed time if they just sit still.

At a recent “Future of the High Street” meeting organised by the non-profit Smiley Movement, Lucy Stainton of the Local Data Company confirmed a very healthy 64% of UK retail outlets are independently owned. When asked which types of retailer are most commonly going out of business she replied “The boring ones!”

Despite the fact that it’s new technology that has created the new challenges, there are many enterprising tech startups that can help physical retailers. Here are five of them.

Launched in 2014 by a husband and wife team who began their retail careers with a market stall, Down Your High Street enables local independent retailers to have an online presence in a digital marketplace. Shoppers can source out-of-the-ordinary products from 530 independent shops based all over the country, and also opt for a deferred payment plan if they wish through collaboration with the fintech payment platform Clearpay.

Dotty Directory provides advertising for small and medium size retailers on a number of websites that have a local focus on areas around the UK. In return, their details are passed on to service providers such as insurance companies who will try to sell to them.

MaybeTech offers courses on using social media for local retailers to raise their profile and attract more customers. Their platform uses AI (Artificial Intelligence) to help larger organisations listen and engage with their customers through social media, benchmark their results, and optimise the ROI of their activity.

LoLo (short for Local Loyalty) has started rolling out a mobile app that enables shoppers to benefit from using tokens that represent cash price reductions in local stores. It aims to increase customer loyalty to local independent shops.

The retailers can in turn use the tokens they accept to enjoy savings on goods and services they require for their business, and receive customer data feedback in order to improve future decision-making. The scheme is networked so that wherever tokens are earned they can be used with any other retailer or service provider that is signed up to LoLo.

Near Street is a search engine that shows the availability of items in nearby physical stores alongside the regular online options. Any stores that maintain online records of stock levels can participate. The system also helps product manufacturers and brand owners check where their goods are after they have been delivered to distribution centres.

To close, I should declare an interest, as I manage social media for LoLo.

Despite Extinction Rebellion’s Efforts, Will Weaponized Robots Give Us Enough Time To Tackle Climate Change?

Posted on October 29, 2019October 29, 2019 by Clive Reffell

In October 2019, the activist movement Extinction Rebellion disrupted daily routines in major cities around the world to highlight the dangers from man-made climate change, and that time is running out to do anything meaningful about it. In London, demonstrators glued themselves to office building doors, the pavement, trains and cars – even to the top of an aircraft about to take off!

They also ran a UK crowdfunding project with a target of £1 million to fund their activities, maybe even to pay some of the fines their members picked up – just a guess. As at October 29 the crowdfunding is still running and they’ve reached nearly £965,000, they’re almost there.

Though within the 30-50 year time frame we are usually told is going to be decisive, some people believe there are other threats that ought to be taken just as seriously, if not more, from artificial intelligence and robotics.

Robot threat to jobs

Many of us have become accustomed to doom-mongers’ comments about the threats to livelihoods from robots doing repetitive and menial work. Inevitable consequences usually list mass unemployment, with non-working people subsidized by far higher taxes levied on those still in work. How would norms of social inclusion and the rule of law cope with an ever more divisive and polarized world of haves and have nots? And that includes having a sense of purpose as much as anything else.

Stuart Russell, a professor of computer science at Berkeley, California, and one of the world’s leading experts in AI, has weighed in with his own opinions in a new book published this month titled “Human Compatible: AI and the Problem of Control.”

He asks readers to imagine a scenario in which a comparable risk is external, one in which advanced aliens from another world email the United Nations and say “we’re coming, we’ll be with you in 30 to 50 years.” Would our planet’s best minds be mobilized to prepare for this extra-terrestrial incursion more than we are preparing for the creation of our own super-humanly intelligent machines?

Pace of technology leaves controls behind

Technology continues to develop at a faster and faster pace. Machine learning-powered artificial intelligence is increasingly likely to enable automation to take on more complex tasks thought were once thought to be ‘machine-proof.’

Flying aircraft, as an example, is a highly skilled profession, not one of the highly repetitive jobs that are supposedly under most threat from robots. Airline pilots can earn substantial incomes and generally receive public admiration. How close are we to that changing, with their role totally automated?

The Probability of Job Automation By Occupation

Lockheed Martin, the US global aerospace corporation, is currently sponsoring an open innovation challenge to combine AI, machine learning and fully autonomous flight. The goal is to create an AI framework that could pilot racing drones through high-speed aerial courses without any GPS, data relay or human intervention.

420 teams from 81 countries have been whittled down to nine finalists who will compete in four races in the coming months. The winning team will win $1 million plus an extra $250,000 if their AI drone can beat a human-piloted drone: the challenge-winning drone will race the fastest 2019 DRL Allianz World Champion pilot at the end of the season.

However, there are often unintended consequences. In a less sporting context, weaponization of drone technology has already been achieved. In 2016, the Islamic State of Iraq and the Levant (ISIL) carried out its first successful drone attack, killing two ‘opponents’ in northern Iraq. Terrorist groups are increasingly using drones and elementary artificial intelligence in attacks. Improved AI could prove a formidable threat, allowing non-state actors to automate killing on a massive scale, creating incidents of mass destruction.

A former Google software engineer and member of the International Committee for Robot Arms Control, Laura Nolan, has warned that autonomous killer robots could accidentally start a war in the future. She has called for automated weaponry to be outlawed by international treaties. Which ones? What treaties do terrorist organizations sign up to?

Terrorist groups aren’t the only parties involved. Stuart Russell’s book points out Israel has developed an autonomous “loitering munition” called Harop, which can hunt and destroy objects it classes as hostile. Anti-personnel microdrones equipped with facial-recognition systems and explosive weaponry might already exist. Slaughterbots, they are called.

At the time when Extinction Rebellion were disrupting major cities around the world, and targeting hubs of finance, media and transport, Russell put forward the notion that the leading tech firms in Silicon Valley and China must learn to accept regulation in the area of weaponry. “Let’s hope it doesn’t require a Chernobyl-sized disaster (or worse),” he warns, “to overcome the industry’s resistance.”

But whilst authors and activists can point and warn of the dangers, I have to ask the question again about “who can introduce enforceable regulation, and act with whose authority?” Any suggestions or comments out there?

Maximising the Impact of B2B Social Media

Posted on August 25, 2019 by Clive Reffell

Responsibility for executing an organisation’s Marketing has changed drastically. Back when digital multi-channel television and colour photographs in newspapers were becoming the new normal, I was planning where and when international clients and household brand names should run their media advertising campaigns, and convincing their heads of marketing to sign off eight-figure annual budgets.

Today, just as importantly for the businesses involved, I handle social media accounts and write articles for B2B clients to post on their websites and elsewhere as part of a Content Marketing strategy. In terms I learned at school in GCSE Economics classes, Marketing for many organisations, particularly smaller ones, has transitioned from a capital intensive activity (needs a lot of money) to a more labour intensive one (less cash outlay, though needs more time spent on it). Whose time should it be?

Old School Marketing

Imagine standing at a podium in front of a large crowd of people, telling them things about your business. Some of them are your customers, some of them are people you’d like to be your customers, and some of them are people who could be asked for advice on whether they think you’re any good. You have the only microphone, you are standing on an elevated stage. You know where your audience is to face them, though you can’t see them very well through the stage lights.

This is how much of marketing communications used to be done – broadcasting. Whilst there is some element of audience interaction – you can hear if you make them laugh, or when they didn’t at a point you hoped they would – it is fundamentally a one-way experience to deliver a controlled, scripted message to an audience switched on to politely sit and ‘receive.’

To ensure the advertising and PR message(s) being put out were the correct ones, and that they were delivered professionally and effectively, you would have hired an advertising agency and a PR company. The messages would be relayed through media owners – the press, radio and tv companies – that controlled the gateways to reach their readers, listeners and viewers. Or you could use direct mail, or some leaflets delivered door-to-door.

Whatever a business chose to do, it was almost totally handled externally, and managed by an internal Marketing team or person. By far the majority of any organisations’ employees had nothing at all to do with it.

Today’s Reality

Now think about sitting at a table with a group of eight or ten people from that theatre audience, who have been selected to discuss your business and its ‘brand values’ – the reputational values and core skills you want your business to be associated with. You can all see each other on the same level, there are no microphones, no stage lights. The process of communicating is very different, and the biggest difference is now that you will have to spend a lot of time listening.

As you begin to talk there will be interruptions, of agreement and disagreement, it will be a true iterative process. The people round the table will start talking to each other, maybe some to defend you, others to pile on the pressure of what they think your business lacks or is failing to do (or say) properly, or even chip in with personal poor experiences. You will be debating, advocating, persuading and interacting. You might find it can be a bit like this when you’re networking at events.

Then add to the table a couple of your employees. The other people at the table are likely to make judgements based on what they say as much as what you say. Do they support or deviate from your own core messages; how enthusiastic are they; do they project a ‘united front’ of consistent values, knowledge and skills? Or maybe they sit there absent-mindedly gazing out of the window while ignoring the conversation, your customers, influencers and other stakeholders who are present.

This is more what Marketing has become in the interactive two-way street of social media, with direct and immediate person-to-person (C2C) contact without permission or approval required from gatekeepers, and with every person creating and delivering their own messages in their own style. It’s a powerful process that can easily use images and video clips. It’s also chaotic, noisy, cluttered and taking place 24/7. And it’s a process that at best you can hope to influence though never actually control. So wouldn’t it be better if there were a few more people helping out?

Marketing Is Not A Person

Inside your own business, think about the numerous people responsible for direct contact with your clients, with key decision-makers: are they all saying the right things, the same things, about the business? And with what degree of enthusiasm or lacklustre detachment?

You also have other ‘back room’ employees in contact with your clients’ counterparts, and occasionally perhaps local authorities, licensing bodies, suppliers, professional trade bodies, the taxman, local and specialist professional media – don’t think this is unimportant. Every contact point at every level influences external perception of your business and what it’s like to do business with you: how the phones are answered; how emails are worded; accuracy and timing of the response to questions; timely and accurate billing; how problems are handled – do people take responsibility or play the blame game? As a start point, it’s why you’re (usually) all smartly dressed and presentable for business meetings – to project a good image. Everything else is simply an extension of this.

Marketing’s ‘New Normal’

These days, a wider appreciation of Marketing should be part of a successful company’s DNA, woven in to its very fabric. In the new “always on” digital-era business environment, it’s more a state of mind, a company culture, not restricted to people who have the word in their job title.

Supporting the company’s digital and social media marketing doesn’t require anyone to spend large amounts of time on it, start writing their own engaging content or become a social media influencer with a multitude of followers. A fuller commitment to the company’s business aims can start with as little as a Click now and again on a LinkedIn Update ‘Share’ or ‘Like’ buttons, or a Twitter re-tweet or a ‘Like.’ To do nothing is to gaze out of the window.

The Sky Is Not The Limit….Your Mind Is!!!

Posted on August 4, 2019 by Clive Reffell

It was terribly sad to hear the recent news that Mandla Maseko, a South African who had won the chance to be the first black African in space, has died in a motorbike crash before his dream trip was realised. I had met him when was a panellist at the international CSW Europe 2016 conference in Brussels, Belgium, and he impressed everyone who spoke with him with his infectious optimism and enthusiasm.

Born to a school cleaner and auto tool maker in Shoshanguve near Pretoria, South Africa, he beat a million entrants from 75 countries to win one of the 23 places to be the first “Afronaut. ” It was going to be a non-orbital 103km (64 miles) trip into space, travelling at speeds up to Mach 3 – three times the speed of sound. The Axe Apollo Space Academy competition had been organised by the US-based space academy SXC (Space Expedition Corporation) to crowdsource aspiring space travellers, and Mandla was a source of national pride in South Africa.

He also hoped to be the first African to walk on the Moon. After being accepted for space training he became a fighter pilot in the South African Air Force, and used his public persona as a role model to inspire and ignite ambition among young Africans right across the continent. The main lesson he went out with was to teach them that any dream is possible through self-belief and determination – after all, that’s all he’d had to start with.

Space exploration can be used as a metaphor for any great personal challenge and his uplifting, aspirational message at a human level was: “the sky is not the limit, your mind is.” He had poignantly said he planned to call home from space, adding: “I hope I have one line that will be used in years to come – like Neil Armstrong did”. I think he’d already said it.

Rest In Peace, Mandla.

Equity Crowdfunding and Venture Capital Working Together

Posted on May 21, 2019June 3, 2019 by Clive Reffell

Not so long ago it was still quite common to come across articles that tried to pitch VC investors and equity crowdfunding supporters and platforms against each other, as if every startup business entrepreneur faced a binary choice of which investment route to pursue. There are growing signs that the complementry rather than competitive nature of these sources of startup and scaleup business funding are beginning to be appreciated.

Many startup founders seek investment budgets that are beyond the resources of friends and family backers, yet are too small for VCs to normally bother getting out of bed for. And if a business is in its earliest days without a trading history or future sales orders, there’s precious little hope of securing a business loan, whether from a traditional source like a bank or from a peer-to-peer lender such as Funding Circle. So there is a true gap in the business investment market that equity crowdfunding occupies, at the same time as providing better returns for small-scale investors than they can get from high street deposit accounts or investment schemes.

It remains fair to say that equity crowdfunding is not yet a fully developed entity due to the small number of exits that have allowed investors to reap their rewards: the UK Crowdfunding Association’s website has just one solitary case study (though there have been more). Other business finance commentators harp on about the startups that still fail, sometimes within months of raising seven-figure sums through crowdfunding, as if crowdfunding ought to provide some mystical defence shield against business failure.

Despite these shortcomings, the rude health of hundreds, even thousands of startups around the world that have traded equity for an investment from a crowd of backers supports enough confidence for the practice to continue to grow and spread.

It has now reached a point where venture capital firms are not only taking notice but some also want to be involved. In the UK, for example, the startup support division – called G – of the global accountancy firm Grant Thornton works with the equity crowdfunding platform Crowdcube.

It is a symbiotic relationship: Crowdcube can offer its clients a longer business development path than just realising their earliest investment rounds, and Grant Thornton gains an entry point to build relationships with promising entrepreneurs before they are big enough to usually be worth their attention. G also offers to make introductions to some of its network of investors who have indicated they are open to the idea of making early seed-stage investments. Here is an example of this co-operation in practice.

Gunna is a range of uniquely-flavoured, craft-made soft drinks which aims to disrupt the established carbonated drinks marketplace in a similar way that craft beer has. It retails at a competitive price for a product made with better quality ingredients, and contains less than 5% sugar to be part of a healthy lifestyle. In 2018 it was available in over 3,500 UK stores, sales were up 300% on the previous year, and their highly experienced founders wanted to raise funds to accelerate the growth rate.

Initial discussions with Grant Thronton indicated that £500,000 would be appropriate to build distribution through recruiting additional sales people and investing in trade marketing. Although this amount is below Grant Thornton’s minimum threshold, their growth finance team remained involved to get Gunna investment-ready to run equity crowdfunding via Crowdcube to raise the money.

Support from some cornerstone investors who wanted to get involved at the ground level, introduced by Grant Thronton, strongly reassured a crowd of smaller retail investors. The equity crowdfunding project generated £819,150 from a total of 245 backers. As Gunna grows it’s likely there will be a need for further, larger rounds of investment which will meet Grant Thornton’s VC-backing criteria. Gunna’s hoped-for exit strategy is acquisition by an international drinks company.

A less formalised example is that of a business founded in 2013 that recycles surplus fruit and vegetables to make traditional recipe relishes and chutneys, Rubies in the Rubble. They were able to gain investment backing from Mustard Seed, a VC fund that takes a principal investor role in world-class early-stage businesses that generate compelling financial and societal returns. However, beyond accepting £160,000 from Mustard Seed, the founder of Rubies in the Rubble, Jenny Costa, used it as cornerstone funding to launch an equity crowdfunding project on the Seedrs platform.

A rule of thumb has evolved based on empirical evidence that successful crowdfunding projects ought to start with very early pledges of at least 30% of their financial target. This is achieved through personal pre-selling by the project leader and their team to guarantee – as far as possible – that their project starts with a bang and not a whimper. This creates momentum as it gives vital confidence to what are usually smaller retail investors who require some reassuring encouragement to take the plunge.

Rubies in the Rubble set a target raise of £300,000, in which Mustard Seed’s investment easily covered the 30% requirement. By 3 June 2019 the project on Seedrs has easily surpassed the initial target and wss overfunding at over £535,000. The funds are to support the launch later in the year of a mainstream ketchup product and a vegan plant-based mayonnaise. The business aim is to capture 3% of the UK ketchup and mayo market by 2023, whilst continuing the fight against food wastage. A trade sale is the most likely exit strategy.

Please get in touch for further insights and support on how you could use crowdfunding to raise money to startup or scaleup your business, plus reap the benefit of numerous other advantages. I’m an independent crowdfunding advisor, not tied or affiliated to any particular platforms: [email protected]

A “Surveillance Capital” Market Sells Our Personal Behaviour Data

Posted on March 22, 2019March 22, 2019 by Clive Reffell

Surveillance Capitalism is a name for the process through which the likes of Google and Facebook use their knowledge of our personal experiences as a free source of raw material. Without asking us, they convert it to behavioural data, combine it with their vast proprietary capabilities in machine learning and AI, and out of that come predictive patterns on what we are going to do and how we are going to behave under given circumstances. They sell this predicitve information in to a new kind of marketplace that trades exclusively on future predictions of our behaviour.

The author and Harvard Business School professor Shoshana Zuboff was labelled “the true prophet of the information age” by the Financial Times for her groundbreaking book, “In the Age of the Smart Machine,” a seminal work on the social, economic, and emotional consequences of computer technology published back in 1988. She is currently on an international tour to promote her latest book that took her seven years to write called “The Age of Surveillance Capitalism: the fight for a human future at the new frontier of power.” It’s a warning against unfettered manipulation and use of data we all freely, albeit sometimes unwittingly provide, and I was fortunate to catch up with her on her book tour in London.

Surveillance Capital was pioneered by Google in 2001, a time when the dotcom bubble had burst and they were under money pressures, as a way to use what they termed “digital exhaust” – their leftover data after helping advertisers to get us to click through on their online advertising. After 2001 advertisers no longer chose, they were told where their advertising would appear, scheduled by a “magic, black box of tricks.” And the advertisers must have found it was working. From 2001 to 2004 when Google went public through its IPO, their net advertising revenue grew by a staggering 3,590% (it’s on page 87 of Zuboff‘s book).

Off the back of it, future “click behaviour” has become a predictor of all behaviour. Our private and personal behaviour has been brought in to a marketplace where it is bought and sold over and over again, and we have no idea who has it or what they are doing with it.

It’s a model that was increasingly copied by tech startups as a way to speed up and maximise monetisation, and virtually everyone is doing it. Think of all your online purchases, it’s all data about you that’s packaged up and sold. And major players in other industries want to get a share of this market as well. In 2015, Ford CEO Mark Fields started speaking about how the company was thinking beyond making vehicles to being more of a transportation analytics company. They had data on 100 million Ford vehicle users around the world – where they went, what they ate, what they watched, and so much more. He wanted to combine this with financial data from Ford Credit and start to match the price/earnings ratios of Google and Facebook.

Many of us have been dismayed and somewhat shocked, perhaps too naively, by revelations that identifying groups of key people and influencing their decisions through feeding them selected information – which may not be true – has impacted disproportionately on major political decisions. I’m particularly thinking of President Trump’s election and the UK referendum decision to leave the EU. A major theme of the best seller Homo Deus is that democracy is based on the free will of people to make up their own minds and vote accordingly, but what if that “free will” is corrupted by access to only a limited amount of the news, or even fake news?

But what can we do? Boycotting search engines, all social media and anything else that captures personal behavioural data in an age of digital mass connectivity isn’t a viable option if we’re going to remain part of our communities. In February 2019 the German Chancellor Angela Merkel closed her Facebook account, though still uses Instagram. And the siren calls of the Internet of Things are beckoning us to go further, deeper.

Google has launched Nest Thermostats. Home temperatures can be controlled via smartphone to improve efficiency and comfort and reduce bills. It sounds good. The thermostats can also be used as a hub to connect to all other IoT devices in the home. However, all the behavioural data picked up from every device is sent to a myriad of third parties, who sell it on to even more. Zuboff reckons anyone would need to check up to a thousand privacy contracts to know what’s happening to the data the thermostat users provide for free.

And you can’t just click on “Don’t Agree” to their privacy policy, because then your thermostat won’t work. There isn’t a Nest-lite, or a Facebook-lite, or a “lite version” of any privacy policies that you can click on to say you don’t want your data used but you still want the product to function.

I’ll mention another new book, “Zucked: Waking Up to the Facebook Catastrophe” by Roger McNamee who has been a Silicon Valley investor for 35 years. A piece adapted from the book appeared recently in Time Magazine.

Tech has been McNamee’s career and passion. He had been an early adviser to Mark Zuckerberg and an early investor in Facebook. Their drive for monetisation has overwhelmed everything else and he was particularly disappointed in 2016 that Facebook only came clean when forced to, and revealed as little information as possible, “when confronted with evidence that disinformation and fake news had spread over Facebook and may have influenced a British referendum or an election in the U.S.”

Monopolistic dominance of the tech markets by Facebook, Amazon and Google has enabled them to build no-go zones around their core operations, he says, by simply buying up any competitors before they can have an impact on their bottom lines. He suggests government protection and even subsidies for tech startups, limits on the markets in which these Big Three are allowed to operate, and that individuals should be allowed to own their own data and decide for themselves who’ else is allowed to use it.

Will any of that happen? There was a public movement against the worst capitalist excesses of the Industrial Revolution, with the formation of trade unions and the development of workers’ rights that became enshrined in law. The time has come, believes Zuboff, for a similar response by people who share privacy, political and psychological interests regarding the negative aspects of the Information Revolution before it becomes too late.

Five Nominees Remain in International Crowdfunding Award

Posted on February 28, 2019 by Clive Reffell

The public online vote for entries in the international BOLD Awards, launched by Crowdsourcing Week, has closed leaving five nominees in the Crowdfunding category – as well as in each of the other 11 categories.

The main factor each entry had to satisfy was that they had achieved something significant beyond reaching or exceeding their financial target, whether it was a donations-for-rewards project or equity crowdfunding. Here’s a run through of the final five nominees.

Borrow a Boat

After they launched in 2016, I met up with the startup team at the London Boat Show in January 2017. Almost all privately-owned pleasure/leisure boats remain unused for the majority of their lives, moored up and incurring charges in commercial marinas or yacht clubs, while the cost of boat ownership remains prohibitively expensive for the majority of people.

Borrow a Boat connects people wanting to enjoy boating with boat owners who welcome a contribution to the cost of ownership. Through working with partners they have standardised requirements for qualifications, experience, insurance, boat safety, and charter contracting. This has made the whole process simpler and more accessible for people wishing to enjoy recreational boating.

Borrow a Boat ran an equity crowdfunding campaign on the UK-based Crowdcube platform at the back end of 2017. Against a pre-fundraising company valuation of £1.2m they set a target of £200,000 which was smashed when 688 backers invested £468,880 in exchange for 28.1% equity. This was an average of nearly £682 per investor and valued a 1% share of the company at £16,686.

In January 2019 a second round of equity crowdfunding, again using Crowdcube, raised just £20 short of £1.5m from 564 investors for 30% equity. This was an average of £2,660 per investor and valued a 1% share of the company at £49,999.

Last year 18 million people in the UK wanted to go boating, but only 4 million did (source: British Marine Federation, Futures Project). Borrow a Boat has transformed the boat charter business through creating an affordable entry route to open the pleasures of sailing and motor boating to a much wider audience that seeks life-enriching experiences, while providing an income stream and safeguarding the interests of boat owners. They now have over 16,000 boats available for hire via an app that’s used in 60 countries.

StartupItalia

This is the largest Italian community dedicated to startup founders and investors. A team of 20 talented people in Milan and Florence creates a daily newsletter with crowdsourced content from 600 contributors and it’s sent to 50,000 subscribers.

They also organise the largest Italian event dedicated to the startup ecosystem and have plans to launch the largest digital training academy for the professions and new businesses of the future. Additionally, they want to create a 3,000 square metre space for a newsroom, with 8,000 square metres for events and networking and 1,000 square metres for training, in a former factory building in Milan.

Their current equity crowdfunding project on Mamacrowd.com closes March 31. To date almost 1,700 backers have pledged over €2.25m.

Tam Development llc

There is a growing number of Saudi youths who are facing problems in finding a job or starting a new business as they have grown up in a rather undemanding and cosseted lifestyle to be passive, unconfident, and inflexible.

Tam Development LLC was established in 2012 with the purpose of engaging and activating the public and helping them reach their full potential, and has successfully designed and implemented over 50 local and regional projects in partnership with 20 government and private entities in Saudi Arabia and the wider Arab region.

They provide access to the range of expertise required to execute startup initiatives from start to finish through Jasarah, a crowdsourcing and initiative management platform that enables users to flexibly engage the public at large plus targeted groups of specialists to help create, manage and deploy challenge solutions that meet global standards in fast-paced advanced technology.

Scribit

Scribit is an intelligent writing robot that ushers in a new way of presenting digital content, makes it possible to instantly reconfigure and personalise a wall – whether it’s a storefront, an office lobby or your living room.

Any vertical surface can be transformed into a screen where images, messages or feeds are projected through an ‘always-on’ web connection, allowing you to download, upload or source any content from the Internet, or use your own content. Applications include restaurant daily menus with changing availability, stock market prices, art displays and sports results updates. Checkout here the video from their Kickstarter campaign.

Their Kickstarter project in 2018 generated $1.6m of pre-orders from 4,352 backers.

RAPPLER

Rappler is social news network of stories in the Philippines that inspires community engagement and digitally fuels actions for social change. Rappler comes from the root words “rap” (to discuss) + “ripple” (to make waves). Readers are encouraged to contribute to crowdfunding projects set up to address some of the issues raised in its content, and to also actively contribute to supporting independent journalism and press freedom, through its crowdfunding and e-commerce platform.

The five nominees here and in each of the other BOLD Awards categories will now be studied by an international panel of judges. They will make their decisions on who are the winners in time for an award ceremony at a black-tie gala dinner in Venice, Italy, on 5 April 2019. A few remaining event tickets are available to spend an evening with award winners, category and event sponsors, and the Crowdsourcing Week team and some of its investors.

UK-based Food Sharing App Targets $1 Trillion Annual Wastage

Posted on January 30, 2019 by Clive Reffell

Half the food wasted in the UK is thrown away at home. In total, a third of all the food produced in the world is wasted. It represents an annual value of $1 trillion and it’s one of our planet’s greatest problems. There are millions of people who don’t have enough, deforestation to create grazing and arable land afflicts ecosystems for farmers to produce too much, and animal methane gases contribute to global warming and climate change.

Co-founders Tessa Clarke and Saasha Celestial-One knew each other from their MBA studies at Stanford Business School where they became firm friends. They hatched an idea to start OLIO in 2015, an app to connect neighbours with each other and with local businesses so surplus food can be shared, not thrown away. This can be fresh or packaged food nearing its sell-by date in local stores, spare home-grown vegetables, bread from a local baker, or the groceries left in the fridge when people go away.

They launched the OLIO app in 2015 and now have almost 25,000 volunteers operating in over 50 countries. I met Tessa recently and she kindly agreed to share her story with me.

How did you first test for public support of your idea to engage the crowd in a breakthrough solution?

We carried out some market research using SurveyMonkey and we found that 1 in 3 people are “physically pained” about throwing away good food. We then set up a WhatsApp group with 12 people and found they were very enthusiastic about sharing food that would otherwise go to waste. From that we received incredibly valuable feedback and suggestions.

With the support of our first investor we built the MVP (minimal viable product) version of the app. And working like crazy, exactly 5 months after we’d incorporated the company (we were Mums on a mission with no time to spare!), we launched the app in the App Store on 9th July 2015, quickly followed by Google Play three weeks later. The very first version of the app was extremely basic, and could only be used in five postcodes in North London. But that didn’t matter, we were live and ready to bring food sharing to the world!

And what’s your growth been like since those early days?

We’re absolutely thrilled that we’ve now got 750,000 users plus 25,000 brand Ambassadors (volunteers) all over the world. And together they’ve shared over a million portions of food – which is the environmental equivalent of taking almost 3 million car miles off the road!

How do you cope with different food safety regulations on person-to-person food exchange in all these different countries?

Food safety and regulation is something we take very seriously. All the food redistribution undertaken by our “Food Waste Heroes” – who collect unsold food from local food businesses and share it via the app – is governed by an incredibly robust Food Safety Management System. And the neighbour-to-neighbour sharing is covered in our standard T&Cs.

You’ve already mentioned a “first investor.” What was it like, raising funding to be able to dedicate yourselves to OLIO and make it grow?

Our very first investor was Simpleweb, who are a development agency in Bristol, and they absolutely loved the problem we are trying to solve and so wanted to partner on it. That enabled us to get the first version of the app built. Since then we’ve raised three rounds of equity financing, and each one has been very different – our latest round was a $6m Series A round led by Octopus Ventures this summer. Fundraising is always challenging, but incredibly rewarding once completed. It’s been quite a sobering experience being a female-founded startup team – because only 2% of VC funding last year went to female founded startups.

How does OLIO make money?

OLIO generates revenues by charging businesses for the service we provide via our Food Waste Heroes Programme to enable them to have zero edible food waste stores. Businesses are increasingly recognising that it’s no longer acceptable to be throwing away perfectly good food – their customers don’t like it, and their employees don’t like it either.

Is there ever a clash between volunteers helping for free and the OLIO founders want to make money?

Our volunteers understand that OLIO needs to have a sustainable business model, and therefore generate revenues, to be able to continue to exist and have the incredible impact we’re having. So they’ve been some of our biggest supporters as we’ve started to monetise.

Your growth rate has been really impressive. What marketing have you used?

Our Ambassadors have definitely been at the heart of our growth. We’ve also had some amazing bursts of new users whenever we’re featured on television, or in the App Store. Press has been useful for reinforcing the brand and credibility although it doesn’t drive immediate downloads. In terms of paid advertising, Facebook and Google have been most effective.

What are your plans for the future?

We have an unashamedly bold ambition for the future – in 10 years’ time we want a billion people to be using OLIO. When we raised our Series A funding this summer, it enabled us to double the size of our team and so now we’re really accelerating our growth.

Thank you Tessa, your story is so inspiring.

If you would like sign up to OLIO and start sharing recyclable surplus food then please go to their website now to download the app.

Crowdsourced Marketing Makes a Big Impact and Saves a Packet

Posted on December 4, 2018December 5, 2018 by Clive Reffell

One of the biggest recent trends in marketing is crowdsourcing. In the last decade, 85% of the top global brands have used it in some form.

In pre-digital days it was pretty much restricted to publicity stunts or involved celebrities, or both, and relied on the media gatekeepers – print and broadcast media owners – to be a vital part of the process. Media owners were the b2b crowd that a brand owner sourced, and the media provided the b2c link. Mass digital connectivity has widened the net, and crowdsourced marketing can skip the media owner involvement and still achieve phenomenal results.

Today’s digital connectivity enables all of us to publish online material, if we want to, and social media spreads the word to encourage direct access to content created personally or in-house by brands. It also means people can respond to brand owner call-outs with an array of written content, photos and videos. This means crowdsourced marketing can involve consumers voting on or even submitting ideas for marketing campaigns and advertisements. A well-known example is the Doritos “Crash the Super Bowl” contest in which consumers submitted homemade Doritos commercials for the chance of their work being shown during the American Football end-of-season Super Bowl. It ran for 10 years.

Sticking for the moment with crowdsourced marketing meaning generating editorial media coverage through newsworthy publicity stunts and appearances by celebrities, Richard Branson is very good at it. He continually makes himself a news item to promote one Virgin brand or another. The example below is a press conference for the launch of Virgin Voyages, cruise ship holidays. The media pick up on a lot of what he does, and he also uses his own social media to communicate directly with audiences.

Examples that relied on traditional media to leverage the message include the now defunct UK holiday company Club 18-30 (which catered to that age group) that used to get high levels of press media coverage by putting up risqué posters near to newspaper offices where they were bound to be seen by journalists: “Wake up at the crack of Dawn… or Lisa, or Julie” was one example. I created a case study about this back in the Noughties for the out-of-home contractor Clear Channel.

This and other similar poster executions won advertising industry awards for the creative ad agency, Saatchi & Saatchi, even if public outcry against indecency – ironically fuelled by the newspaper coverage they were designed to achieve – resulted in them having to be taken down early. But they had done their job.

Founder of the Ultimo lingerie brand Michelle Mone is another business person/celebrity who created her own media moments in the spotlight.

One incident, when she was still a cash-strapped startup just beginning to get the first shops to stock her products, involved hiring a dozen actors. They pretended to be plastic surgeons and demonstrated outside the Selfridge’s department store to try and prevent them stocking her cleavage-enhancing underwear.

They claimed they would be out of work if too many women decided to wear an Ultimo bra rather than have surgical implants, and blocked the road, the world famous Oxford Street. Their morning picketing was shown on lunchtime television news and Selfridge’s sold what was meant to be six months’ of stock in five hours. It’s all in her book, My Fight To The Top.

Up-to-date, and on a far more serious theme is an example from South Africa. Francois Du Preez, Digital Creative Director of Grey Advertising in South Africa presented a case study at the Crowdsourcing Week 2016 Global Conference. Dog fighting is an unsavoury and illegal activity in South Africa that causes many animals to suffer, not just the ones that do the fighting, and it’s a multi-million Rand industry when related gambling is taken in to account.

Criminals steal domestic small dogs to feed to pitbulls being trained to fight, to give them the taste. But over time a majority of the public had tired with and disengaged from the regular media coverage of tattered, battered and mutilated dogs. The ad agency created a mobile billboard that appeared to publicise a dog fight, Nitro vs Thor, with a website URL and a phone number. Social media exploded within one hour of it driving around affluent suburbs of Johannesburg. It was reported on radio news and in the next editions of newspapers. Angry people found out the website had been registered by Du Preez and some came looking for him.

The website was taken down after just three hours in which time it had received more attention than they had ever anticipated. Against this background of anger they ‘came clean’ that the advertised dog fight was a stunt and then got even more media exposure for supposedly trivialising the distasteful and illegal activity. The issue was suddenly important once again to many people.

The amount of media space and broadcast airtime costed as media advertising exposure was valued at Rand 1.7 million. The mobile ad had cost Rand 7,000, allowing a claimed ROI factor of 240 times the initial outlay. But not only had massive media coverage been achieved for such a tiny sum, the mobilisation of the crowd had made it so much more effective than if a real budget had been used with a regular “this is bad, let’s all help put a stop to it” style of message.

In the digital-era of personal connectivity, newcomer craft beer brewer Brewdog claimed to be worth £1.8bn in January this year (based on some corporate investment deals), and has vowed to never spend a penny on paid-for advertising. Though they happily hired and branded a helicopter to make a video of parachuting “fat cats” (stuffed toys, I hasten to add) in to the City of London to generate news coverage of the fact that they were crowdfunding. They went on to raise their first £5m through equity crowdfunding without the services of any expensive “fat cat” investment advisers.

A current example is the Royal Mail which has installed four musical post boxes in the run-up to Christmas. When cards and letters are posted they trigger a sensor that plays a loop of snippets from Christmas tunes and reindeer sleigh bells.

There is just one in each of Scotland, Wales, Northern Ireland and England. The one in England is in Greenwich, the historic area on the south side of London’s River Thames and a UNESCO World Heritage Site, very popular with tourists.

It has been mentioned in social media by many people and organsations including numerous bloggers and local businesses in the area, reported in local and national newspapers, on BBC tv news and by the advertising industry platform Campaign.

The Royal Mail are using the added media coverage to raise awareness of this year’s last posting dates. There, I’ve written about it and you’ve read about it, it works.

Crowdsourced marketing offers huge benefits for businesses. Crowdsourcing saves on marketing costs because either consumers are happy to submit their ideas for free in exchange for seeing them used in the marketplace, or because bloggers, journalists and editors fall over themselves to create engaging content featuring stunts and/or celebrities to entertain their audiences. Plus these days there is direct consumer-2-consumer connectivity. It’s a great way to get affordable coverage of a crowdfunding project.

If you’d like to discuss you own ideas for a crowdfundng project and to see how I can maybe help you please email me at [email protected]. Don’t forget, a dream isn’t a plan and hope isn’t a strategy.