Kickstarter is for creative projects. CrowdRise (acquired last week by GoFundMe) is for nonprofit fundraising. And Indiegogo is for… well, exactly what does differentiate Indiegogo from the rest of the crowdfunding universe?
Until recently it was hard to answer that question, and the company’s momentum was suffering as a result. Then, last January, COO David Mandelbrot was installed as CEO. Over the last year, he has given the platform a renewed focus on product entrepreneurs and built tools and capabilities to better serve those organizers. In November, that strategy culminated in the launch of equity crowdfunding, managed in partnership with MicroVentures, making Indiegogo the first of its peers to experiment with Title III of the JOBS (Jumpstart Our Business Startups) Act.
Mandelbrot’s strategy is already paying off: Yesterday, Indiegogo said that entrepreneurs on its platform have raised over $1.4 million from equity backers in just two months—a sizable portion of the nearly $20 million that founders on all platforms have raised through equity (or “regulation”) crowdfunding so far. (The wider pool of capital raised through other aspects of the JOBS Act is now in the billions.) Mandelbrot spoke with Fast Company about how Indiegogo has evolved, and where the platform is headed next.
Why have you decided to focus on entrepreneurs?
To try to be all things to all people raising money would stretch us too thin and wouldn’t allow us to develop a compelling proposition. Many of the most successful campaigns on our platform were campaigns for product entrepreneurs. Frankly, it was also a segment of the market that we felt was underserved by other platforms. We realized that this was a group of people that we were in a position to really help in a unique way.
Where does equity crowdfunding fit into that vision?
Our strategy was to move beyond crowdfunding and help entrepreneurs through all phases of the life cycle. Not just raise money, but also help them with manufacturing, design, retail. Equity crowdfunding was a very natural extension of that strategy.
What makes Indiegogo better positioned on equity crowdfunding than a platform like Crowdfunder, which is focused exclusively on equity?
We have a lot of experience in knowing how to effectively expose the issuers on our platform, how to tell their stories in a compelling way. We also bring to it a very large audience of backers, people wanting to get behind those latest innovations—11 million people visit Indiegogo on a monthly basis—and a large base of entrepreneurs. The other thing is that we do offer basic crowdfunding. Backers can see the success of the business in real time, and then invest in real time. Perk campaigns validate the market.
What kinds of products are doing well on the site right now?
There were a lot of wearables and drones a few years ago. Since then there has been a shift toward manufactured products that are more mainstream. For example, we’ve seen a substantial rise in products that people use in their kitchen. And larger companies are using Indiegogo to go direct-to-consumer with their product. GE launched a new ice maker on Indiegogo, and it raised over $2 million. We’ve also seen an increase in mobile devices, as in devices that make people more mobile—electric bikes, electric scooters.
Is GE’s presence part of a deliberate move toward enterprise campaign organizers?
We launched our enterprise program last January. Every month we’re seeing new enterprises use Indiegogo as a platform to enable market validation and connect with their customers directly. They can learn what users are interested in, they can get feedback. GE doesn’t need to raise money. But they use Indiegogo to figure out which of the products in their lab are going to reach an audience that’s excited. They say it’s much better than surveys.
What comes next?
The big thing for us in 2017 is continuing to help entrepreneurs take their ideas from concept to market. That means more partnerships, and more product features that help entrepreneurs beyond the crowdfunding phase. The second thing you’ll see is more solutions for early-stage entrepreneurs that are interested in reaching a new audience but may not be interested in a crowdfunding campaign. Indemand [ecommerce] has been fastest growing part of our business over the last two years.
This interview has been edited and condensed.