When seeking support for new enterprises, we should not just look to government and private investors, writes Ed Whiting FRSA, a co-founder of a crowdfunding business. He argues that the RSA is well placed to become a beacon of crowdfunding for enterprise.
The recent RSA Jobs Summit has provoked some fascinating writing on a vitally important subject, including in the Spring 2012 RSA Journal. Unfortunately, I missed the event but there was one paragraph of Matthew Taylor’s roundup blog that particularly piqued my interest: “Entrepreneurship is vital to future growth and job creation and there are probably more budding entrepreneurs around now than ever before. But we are still quite in the dark about the characteristics, which make for a successful entrepreneur and the context which most favours them. When we do find people who have, and act on, great ideas we should cherish them and encourage them to develop this talent in others.”
The way in which ‘we’ is interpreted matters enormously. Too often we look to government, policy institutions and think tanks; I think that would be a flawed conclusion. In supporting new enterprises, we should look to crowdfunding, a relatively new way of using social media to raise funds for exciting creative ideas from wide ‘crowds’ of people. Since 2008, crowdfunding has taken off with some gusto. My recent experience in starting a crowdfunding business – WeDidThis – has made me think that the only way we can create the context described above is to truly socialise the process of devising and growing new businesses. In short, we must create new avenues of popular support for very early-stage social enterprises, by giving micro-funders the chance to help and influence the growth of game-changing ideas right from their inception. The RSA could be hugely influential in making all of this happen.
Making new ideas really come to life is hard work. As I found with WeDidThis; you need to be willing to be a full-time evangelist for your idea, battling hard to get it heard, even when few seem willing to listen. At the start, it can be really tough to find the small pots of cash that you might need to research, test and develop your idea. That is why when getting off the ground, a lot of enterprises have to rely solely on the self-funding and family and friends, creating a risk that entrepreneurialism becomes an exclusively middle-class game and making it difficult to get really honest and constructive feedback.
Crowdfunding can be a really exciting way to break this cycle, by enabling new value to be created for both funders and entrepreneurs. For the micro-funders who back crowdfunding projects, the process of donating creates a relationship that makes them feel they are playing a valued and powerful role in making new ideas happen without needing to contribute the kind of money that would normally get your name over the concert hall door . For entrepreneurs, crowdfunding is a great way of creating the context where their ideas are indeed ‘cherished and nourished’ by a large number of people.
Judging by the feedback from project leaders, it is hard to overstate the benefits from opening projects up to offers of financial and non-financial help. As successful crowdfunder Rebecca Jones, of Just Jones &, puts it, the backers for her theatre project are her ‘crowdfounders': “The [biggest] reward for us, is knowing that we now have a group of people and organisations who are taking an active interest in what we do and why we are doing it. This is worth as much as the individual pledges.”
On WeDidThis, projects with a clearly articulated social benefit seemed to be the most likely to be successful, for instance, our most popular projects had a really clear social purpose, like teaching street dance to kids in Rwanda and running arts clubs at Peckham Space gallery for children.
The RSA is already supporting many of these sort of projects: those that have succeeded in obtaining RSA Catalyst funding show real potential to make a difference to local communities and social groups. A couple of projects have successfully supplemented their Catalyst funding through crowdfunding on WeDidThis: a workshop teaching textile skills to women in East London and a new busking festival in Bedford. With such a great alignment of a values-conscious RSA Fellowship and a pipeline of socially valuable Catalyst projects can we do more?
There are over 27,000 fellows in the RSA, all of whom have signed up to the organisation’s clear and strong social mission. If we can support Catalyst projects to open themselves up to new supporters through crowdfunding, and convince just 20 percent of you to support RSA Catalyst crowdfunding projects with your money and skills, we will have created 4,000 new micro-philanthropists. Even at the relatively small average donation size that we saw with WeDidThis (£200) we will create a new £54,000 funding stream to complement the direct grants made through the Catalyst fund. Fellows would have a direct say in what gets funded, and with every project giving them the opportunity to help and influence its growth.
I would love to see the RSA become a beacon for crowdfunded social enterprise. Supporting entrepreneurship should not just be about governments and big investors picking winners from those who have been lucky enough to secure increasingly rare seed finance, with ‘ordinary’ people on the sidelines until products are brought to market. We must create a society where big ideas start with small experiments, backed by many people making small donations, who passionately want the project to succeed. Starting with the RSA’s Fellowship.
Ed Whiting has spent most of his working life in the public sector. In January 2011 he co-founded WeDidThis.org.uk, which was merged in March 2012. For further examples of crowdfunding, see US platforms like Kickstarter.com or Indiegogo.com.