Hot Seat: Alan Crabbe – Pozible
Australian crowdfunding platform Pozible is taking the big leap into the United States. Its co-founder Alan Crabbe has relocated to San Francisco, where his micro-team is putting the final touches on a venture that should launch in the coming days. The U.S. platform introduces some key evolutionary features. There’s a new subscription model, which enables users to receive ongoing revenue from one-off projects. And a new self-hosting tool, which allows users to embed a non-branded crowdfunding campaign on their site or domain. Crabbe and his colleague Rick Chen established Pozible back in 2010. The pair had met on a road-trip from Sydney to Noosa. That road trip, clearly, is an ongoing journey. To date, Pozible has hosted more than 4,300 projects, and boasts more than $14 million in pledges and has existing offices in Melbourne, Sydney and Xian, China.
Why the U.S.?
The point of crowdfunding itself is that it’s very democratic. We’ve heard feedback from people who’ve used Pozible that would like us to have a more global presence. And part of that means we need to be thinking outside Australia and looking to establish relationships with the industry. It’s something we’ve always wanted to do, to see ourselves as a global player in crowdfunding. And it’s a natural progression to look at the U.S., especially for the creative industries. I’m here, trying to establish ourselves, the relationships and the processing of the transactions. The mechanical side of it is pretty complicated. We want to be seen as a global player and build relationship with the press. Not many people know Pozible exists, yet. But we’re the third-largest reward-based crowdfunding platform in terms of total transacted and number of projects. We’ve maintained our position as the crowdfunding model has developed. We’ve done over $14 million in distributions and we’re currently well over $1 million per month in Australia alone.
How will you raise the brand’s profile in the U.S.?
The strategy is not too much different to how we launched in Australia. We’ve always been at the grassroots level, looking at organizations and communities of people who are already (creating), emerging talent whether they’re in film or music going to these people and getting their feedback, and finding out what they want from the platform. We’ve been quite active in building a network of people who are supportive of people running projects, giving advice and feedback and hopefully improving the level of success. We have a success of more than 10% above other platforms. Kickstarter is about 43-44%. Pozible is 56-59%. Our average success rate is 55% or 56%. We’re doing a platform which has a majority of successful projects; other projects are in the minority. We announced we were coming here and we hope to launch in first week of October. We’ll launch with a few campaigns, and some projects which have decided to use the subscription-based model and the independent model. We’re currently in beta-testing, and we hope to launch in early October.
Not many Australian companies expand into the U.S. What have been the big challenges?
It’s not so much a challenge, its being able to succeed internationally that is the big challenge. Obviously there’s big conversation in the area of crowdfunding, where you’ve got Kickstarter and Indiegogo as the two big players in the market. Generally Kickstarter is known as the “gorilla in the market.” The key thing for us is we didn’t want to come into the market and directly compete. We wanted to differentiate ourselves from other platforms so we had something to talk about when we launched. That’s the reason we launched the subscription based model and the self-hosting model. It’s something the other big crowdfunding models aren’t providing at the moment, but I think it provides a good service for anyone wanting to use crowdfunding. We wouldn’t have come to the U.S. if we didn’t have anything to differentiate ourselves. When we started thinking about how to innovate the model, these were the questions we asked back. We had to address, how can we compete and provide a service that’s different to Kickstarter and Indiegogo.
Are you happy to be No. 3 in the States?
I don’t think any entrepreneur is happy to be No. 3 (laughs). We see ourselves as being really strong in the creative industry. We’d like Pozible to be No. 1 in the core categories of music, film and the categories in the industry, which is for emerging creatives relying on external funding support. For me, my desire is to be No. 1 in that space specifically in music, film, theatre, visual art, publishing. Our focus has always been on the creative industry. For us, it’s the market we want to further develop.
What lessons were there to learn from Amanda Palmer’s $1.2 million Kickstarter campaign?
The one big lesson, and many people have heard her TED talk about her experience, is to look at her career progression and how she used crowdfunding as another stepping stone for what she’d already been doing – putting herself out there to her community and asking for support. And making it more about being open to the fans and inclusive, and trusting the fan to make her successful. The key thing people using crowdfunding must realize is it’s not their project, it’s more about if you can raise the target you can achieve it together. Its not about, “I want to do this to get a record out.” The mindset we picked up on early, but the creative industries are realizing now, is that the fans are the core to the business. They should be the centre of everything you do. They’re what propel you, and they can get the message out through word of mouth. Along with the pitch, you need strong and compelling reasons to make the project successful.
Did failures like Sellaband or SliceThePie damage the crowdfunding biz?
The crowdfunding movement started with music. In my eyes Sellaband and SliceThePie were the pioneers – it’s unfortunate that they didn’t lead Crowdfunding in music. We don’t spend a lot of time looking at competition or other platforms; we’ve always been lead by the community of creators and our partners.
Is the space for crowd funding becoming cluttered?
A lot of people have picked up the concept and idea and think it’s an easy service to provide. And with most things where there’s an online attraction, you have a lot more players trying to carve out a niche market. I’m not sure if crowdfunding has got the stage where it’s going to break out into niche categories. There’s only a couple of players who’ve been able to operate in one-niche categories. There’s a lot of platforms. Are there too many? It’s probably too fragmented at this stage. Of course, it’s really up to the person running the project who decides what platforms work.
I know ASIC issued a warning to crowdfunding businesses to stay on the side of legal. Have you had much to do with ASIC?
We first spoke with ASIC prior to our launch in early 2010 and we have a contact in the organisation that deals specifically with Crowdfunding. With the liberalisation of Equity crowdfunding laws overseas – the government is very interested in how this might impact the Australian creative industry and business startups.