Archives for: May 2014

As the crowdfunding industry is looking forward to welcome equity-crowdfunding as a legislated form of startup funding, the impatience about the slow rate of its introduction is growing. There are some serious issues however that makes it worth considering whether or not every potential investor should be exposed to the possible dangers.

Startups fail

After 10 years, about 80% of the companies have went bankrupt. A big number has big consequences that most equity-crowdfunders might not always realize, especially when the entrepreneur is somebody you know. It’s hard to keep in mind the numbers and not be swept away by their persuading manners, well-developed business plan, and enthusiasm. Crowd-investors aren’t familiar with developing portfolios or spreading risk. Think, would you let your 10-year-old drive a car even though he knows where the steering wheel is?

Scams are rising

Companies might fail due to external developments (bankrupt customers, imploding industries, etc.) despite all the talent an entrepreneur has and the effort, time, and money invested. There are people out in the field however, who are actually looking to harm investors via scams, like the infamous Kobe Beef Jerky. The list with scams is growing and though the awareness is growing, there is no standard policy that protects crowdfunders. 

The crowd is uneducated

Though some claim that “the wisdom of the crowd” will filter out faulty projects, the “crowd” exists from uneducated individuals that simply aren’t as educated as most professional investors. The private investors are accredited for a reason. Crowd-investors don’t have a background in startup development, company organization, revenue models, or finance.

Many of them might expect a quick win, while investing in companies usually locks you in for 3-7 years. There is also no way to get rid of SME shares as a standards way that is implemented in every campaign. So how are you going to get your ROI? Dividends are easier to grasp, but most startups won’t make profits within the first few years, and when they do it might be better to reinvest instead of paying dividends.

Let’s work towards safer funding!

Let’s get real: equity-funding is not going to be forbidden. Though there are still some growing pains in the equity-crowdfunding industry, the potential is enormous. In order to create a healthy funding sector, policies and accreditation should protect the crowd-investors. The opportunities are to promising, and it’s unlikely anyone would want to stop a way to further develop our economy by democratizing capital streams and empowering the crowd.

Ludwine Dekker

How much time do you spend each day checking in with your social networks? Odds are good you not only use social media extensively, but you spend more time on it than all other online activities. We spend more than three and a half hours per day on social media, reports Ipsos, which accounts for about one-fourth of the time we spend awake. Companies have long since realized the marketing value of social media but still struggle to make their brands stand out to consumers. Gamification—applying the typical elements of game playing (think scoring points, competition and rules of play) to nongame applications to encourage engagement with a product or service—helps bridge the gap between quality content and user interaction. What can gamification do for your social sites?

Demographics And Spending Power

Perhaps the strongest argument in favor of gamification lies within the purchasing power of those who use social games most frequently. Though millennials spend more time on social sites than any other age bracket, it’s their parents—who have much larger wallets and more discretionary income—who spend more time on social games. Go-Gulf reports that one in four adults over the age of 46 plays social games, a higher percentage than any other demographic. A company or brand offering gamification will be more likely to attract these coveted social users.

Phone Frenzy

When it comes to marketing your brand, what medium should you expect your customers to utilize? It’s a mobile world out there for social gamers, with nearly 70 percent of casual social gamers reporting they prefer to game on an iPhone rather than an iPad. There’s no need to program an iOS app to specifically run on one or the other, but it’s important to keep in mind that the majority of your users are accessing the Internet via their mobile devices. You will, however, have to create a platform that runs on both iOS and Android devices in order to reach a greater market. Develop a game that can be played on a lunch break or on a bus by a smartphone owner and you’ll be more likely to have smartphone and tablet users share the game among their friends than if you develop games better suited for a desktop computer.

Pay To Play?

It goes without saying that your company’s game should be free to play. This does not mean, however, that you cannot recoup some funds. Microtransactions have become the engine for successful game development, allowing users to directly purchase anything from extra lives, to character clothing, to cheats by dropping a dollar or two into the game. Users like it because it lets them game without paying $60 for a game station disc; developers love it because they pull some two billion dollars annually, according to insidesocialgames.com. With a microtransaction system within your company’s game, consumers become financially, as well as emotionally, invested in the product before they ever go to your site’s actual sales page.

Wade Johnson