Indiegogo’s Danae Ringelmann on Crowdfunding as Market Research

Wade Roush6/5/14,  Xconomy

On the crowdfunding platform Indiegogo right now, there’s a campaign for a product called theNew Matter Mod-t. It’s one of the first low-price 3D printers designed as a home appliance, allowing consumers to print their own craft items at home. (The New Matter video shows objects like towel holders, refrigerator magnets and pencil holders.) As of yesterday, the campaign had shot past its goal of $375,000 and was on its way to $500,000, with 28 days left to go.

Behind most crowdfunding campaigns there’s an individual or a small startup team—the kind of innovators who’d probably have a hard time raising money from traditional sources like banks, angel investors, or venture capital firms. But New Matter is a little different: the company was co-founded by Bill Gross, a serial entrepreneur best known for starting Idealab, a business incubator that has spun off dozens of successful Internet startups.


Gross is a multimillionaire who doesn’t really need donations from a crowd of strangers to get a cool new product to market. So what is New Matter doing on Indiegogo? And what does it mean when so many other deep-pocketed entrepreneurs are flocking to crowdfunding sites to raise money? (In a 2012-2013 Indiegogo campaign, to pick another example, Misfit Wearables raised $846,000 to get its wearable fitness tracker to market, after it had already raised more than $7 million in venture funding.)

To Danae Ringelmann, it’s all about connecting with customers.

Ringelmann is chief customer officer at Indiegogo; she co-founded the San Francisco-based startup with Slava Rubin in 2007. She says the company’s fundamental goal is to make it more efficient and less painful for average people to raise capital, or to put money toward causes they believe in. And in practice, the majority of the campaigns on Indiegogo are run by individual creators or non-profit groups.

But Ringelmann also sees crowdfunding sites as platforms that established companies and entrepreneurs can use for market testing and product validation. Because Indiegogo is open to all—fundraising teams don’t have to pass muster with Indiegogo staff, the way they do at New York-based Kickstarter—it’s turned into a vast marketplace of prototypes and potential products, from Mod-t to Puracoat (a nanotech coating that supposedly protects mobile gadgets from scratches and water damage) to Solar Roadways (a massively popular project to develop modular solar panels that can be used as an energy-generating paving system for roads, driveways, and parking lots).

Not all of these companies need the money; often, they’re just as interested in how potential customers respond to their ideas. “We are seeing venture-backed companies using Indiegogo as a way to connect and get market feedback and data,” Ringelmann says.

Ringelmann spoke about Indiegogo this week at Xconomy’s Napa Summit and I buttonholed her during a break for the short interview below. We mainly talked about the role of crowdfunding in startup innovation, and how other projects are affected when established organizations turn to Indiegogo and Kickstarter to test the market.

Xconomy: What makes Indiegogo different from other crowdfunding sites?

Danae Ringelmann: We are open, so we don’t curate what comes onto our site, at least not via human curation. [There’s a measure called the “gogofactor” that determines a campaign’s search rankings and placement on the site.—Eds.] We believe everyone deserves the right to at least try to get their idea off the ground. We see gatekeepers as the source of friction in the process, and the last thing we wanted to be was the source of friction. We are like the YouTube of funding. Not every video on YouTube will get a million hits, but every video has the chance to go viral, and it’s all about how hard the creator works.

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