During the Golden Age of Hollywood, five gigantic studios produced almost every major motion picture. Producers, actors, directors, cast and crew – even screenwriters – were all contracted employees of single studios and were assigned to many projects a year by the big execs. Most films earned respectable returns, and the runaway hits more than covered the losses of the year’s biggest flops. As long as the film industry ran, studios were in business.
After the vertically integrated system broke down, big studios downsized and esssentially became backer-distributors rather than production companies. They would hire production companies or freelance creatives to work on their projects. With less control over the production process and monetising at fewer stages, studios took fewer and fewer risks, ultimately leading to the highly formulaic, reliable, massive-scale tentpole productions we see from the big studios today.
This opened the doors for independent cinema to fill an artistic void in the film industry. However, this meant people were specialising in essentially unreliable and largely unprofitable films. Small-scale film financing largely became a gifting economy, forcing the best creators into a network of boozing, schmoozing, nepotism, connections and wealth. Any original talent without access to this network will have a hard time indeed of getting their film made.
So where does that leave a prospective filmmaker today? Crowdfunding, when it emerged ten years ago, presented a radical new alternative to outdated industry standards for funding. Even some big names like Charlie Kaufman ($406K) and Spike Lee ($1.4M) turned to crowdfunding to realise their passion projects. However, crowdfunding ultimately depends on fandom and altruism, and could never become a fully sustainable model for film funding.
Here at LiveTree, we are revolutionising the way films are funded. Because we are using blockchain technology, small financial transactions can be made throughout the world with great efficiency, meaning that royalty contracts remain profitable for financiers on tiny scales. If the LiveTree community notice a pitch that they love, want to see more from a new director or need to see a sequel to a sparkling indie flick, they can pool together and fund the project with Seed tokens, the world’s first film and television cryptocurrency.
The blockchain enters each backer into contracts of rights and royalties with creators which cannot be altered or dishonoured. This is of great contrast to the purposefully opaque and notoriously unreliable royalty agreements made through studios. Audiences can fund the content that is meaningful to them, and then earn their share of the profits. Meanwhile, creators can be assured of a scaleable fanbase for their content. Fewer middlemen and fat cats leads to a fairer, more reliable, more equitable deal for creators, as well as much greater creative control.
The alpha version of LiveTree’s own streaming channel, Blossom TV, launches 5th November, so why not register now, stay up to date and discover the future of entertainment.
If you’ve heard of LiveTree ADEPT, you’re probably now interested in the compelling mission and values of a business that is about to build a platform which places the power of creative entertainment into the hands of those who create, invest and watch it, rather than the corporates, but what next?
If you’re an investor with a wallet of crypto-currency and blockchain investments, look away, you know what you’re doing and the market is a fascinating and dynamic place, enjoy!
But LiveTree is different, it has clear mass market appeal beyond the crypto-players and this is what differentiates it from the vast majority of blockchain propositions and here’s how:
LiveTree, the reward based crowd funding site is an established revenue generating business that has seen 20% growth month on month. Over the last six months alone, it has crowdfunded some 120 film, TV and content projects. It has also built a network of 14,000 entertainment companies and their employees. That’s great, but there was always a bigger plan in the LiveTree house and finally the time has come to build it.
So why get involved now? For start offs there’s a very attractive discount scheme designed to make the offer feel good to even to the smallest stake of interest. Whether it’s your great uncle who always keeps a couple of grand to one side ‘for interesting things’, or if you’re an up and coming film director, a TV and film mega fan, an established TV production company or a seasoned film investor, LiveTree ADEPT is for everyone.
Even for the casual observer, the platform will quickly become a fascinating space to immerse yourself in the wonder of our potential creativity, when the arbiters of taste, judgement and culture don’t have exponential company growth to think of.
To the uninitiated, setting up a digital wallet might also seem a little daunting but it’s as simple, if not more so, than opening a bank account, just follow the videos here: https://adept.livetree.com/
Most crucially, the cultural implications are broader and deeper than a speculative flutter. If you believe that the films we make and the stories we tell can change our hearts and minds, then this is for you. As a fan, you can get closer to the creators, have a say in the direction a project goes in, you could even own a piece of it.
As a creator, up and coming or established, the platform is the place to go with all of those ideas and developed projects that you know aren’t going to get commissioned or financed through the traditional routes and gatekeepers. These tend to be the best, ground breaking or frankly diverse stuff which a now risk averse, money obsessed environment can’t take a punt on, obsessed as the system has forced us to be on revenues. These ideas can have a willing audience to pay for it if there was a mechanism to share the story, through word of mouth and decent marketing. That mechanism is LiveTree ADEPT. Or maybe as a producer you don’t want to give up the value of what you create to a massive internet company that doesn’t pay its taxes and in this digital wild-west, is answerable to no one, not even its own algorithms.
As a sales or distribution outfit, you have a new pipeline of content to do deals with if you choose and as a viewer, you have a pre pay per view channel where what you watch is what you and your community have helped to make. If you were to imagine a version of Netflix where your voice is heard on what gets made and you have the chance to share in its success in every way, and so does everyone else in the network, then for me, that’s just a buzz.
When we can see that the power for change is in enough of us coming together to enable this new future. The digital token being offered at the root of LiveTree ADEPT (Advanced, Decentralized Entertainment Platform for Transparent distribution) – is a stake in a new world of entertainment where everyone’s welcome.
Let’s take a trip back into digital prehistory. We’re in 2004 and improved internet speeds and connectivity mean you no longer need a physical DVD to watch your favourite film or TV show. You can stream your entertainment over the net, in your own time, in your own place.
Netflix, a Californian entertainment company founded in the late Nineties as a DVD-by-mail operation, has recently gone public (2002), selling 5.5 million shares at a price of $15.00 of common stock (approx. $85million, LiveTree’s current Seed Token Sale cap is approx. $50m more on this later). It is also busy migrating its postal business into a streaming business in an effort not to die with DVD. But to its credit, Netflix persevered. And we all know the happy ending to this particular story.
Happy ending for Netflix, that is. The jury is out as to how happy the ending will be for the creative community.
Today, Netflix has become a household name, a meme and a synonym for streaming video. It’s on virtually every device with a screen. It’s become a powerful force in modern culture. From an end-user perspective, Netflix provides a great service. But there’s a darker side to the Netflix phenomenon, namely its practice of using your data to maximise its profits.
Next time you switch on Netflix, check out your ‘personalised content’ feed. This is compiled via algorithms similar to those used by Facebook’s newsfeed. It works like this: Netflix gathers data from its users’ viewing habits, which it then uses to rate everybody and everything involved in a production — actors, directors, set designers, even romance levels, plot conclusiveness and the ‘moral status’ of characters — to judge whether a piece of content is worthy of transmission. This user-data-based scoring system has a single objective: to maximise Netflix’s profits.
I personally find this annoying — I seldom want to watch what Netflix has decided I should watch — but, more importantly, it’s dangerous. It’s dangerous for creativity. It’s dangerous for consumers. And we need to rethink it.
Netflix is a centralized operation. In other words, the power resides in the top execs and it is answerable only to its shareholders, not to its users or the creatives who produce its product. In essence, it takes your data and controls it within a non-transparent structure.
The unstoppable growth of the centralized online giants — and I’m not just talking about Netflix here, but also YouTube, Amazon, Apple — is creating an entertainment marketplace dominated by content whose sole function is to make money. Brave, thought-provoking, game-changing content that adds to society’s creative and cultural stock isn’t part of their remit. I call that scary.
Netflix doesn’t share the data it uses to drive the algorithms that determine what content it shows to its subscribers. Even the people who create its content aren’t allowed to see the data. This is bad news for consumers, because it limits choice and will ultimately result in a world of cookie-cutter content. And it’s bad new for content-makers, because creativity and originality will be sacrificed on the altar of profit.
Unfortunately, the bad news doesn’t stop there. Digital rights management (DRM) is shaping up to be the next battlefield. Netflix’s DRM policy is to license content in perpetuity. This means that content-makers cannot realize the true value from their IP from any other channel, Which in turn means that their IP’s long-term value is lost. Irretrievably. Again, this is disturbing, not least for the distributors whose job is to navigate the increasingly murky waters of DRM to realize the best price for content. Distributors are also beginning to be cut out of the deal. You may think this is no bad thing — but if the alternative is a single gorilla that could overpower you in a heart beat, it’s a worry. In October, Netflix had 109 million subscribers worldwide, including 52 million in the US. A rudimentary calculation shows that, at a subscription of roughly $5, it’s netting around $545m per month.
Pause to catch breath.
I keep thinking that, if just one month of Netflix’s revenue were invested into LiveTree’s new digital token, Seed, it would be enough to reinvent the entertainment industry. It would be enough to create a new marketplace that’s fairer, more efficient and more transparent. More importantly, we could create marketplace that would be sustainable because it would protect and nurture the product — creativity — that drives it, rather than exploiting it for short-term gain.
In today’s world, dollars equal power. Netflix is using this power just like the Hollywood studios — themselves centralized ecosystems — to increase their power, profit and control. For example, it is now making lock-in deals directly with Hollywood stars, including Will Smith. Netflix also declines to license to cinemas, which means none of its films will ever be seen on the big screen. Ergo more money and control to Netflix; less choice and diversity for consumers and creatives.
All this has me worried about the future of creativity. Imagine if Netflix decided to up its subscription fee to $10? Or $15? Or $50? After all, who’s to stop it? That would put a severe dent in not only your entertainment choices, but your entertainment budget. The spectre of creativity governed by profit rather than passion was one of the reasons we at LiveTree ADEPT started to think about what could be done to turn the ship. It’s possible, achievable and, actually, not that difficult. We’ve got the technology, we’ve got the vision. All we need is your help.
For more information, or to register to participate in the LiveTree ADEPT token sale, please visit adept.livetree.com.
Crowdfunding is a risk free way for creatives, communities and entrepreneurs looking to fund their project. A well run crowdfunding campaign can take an idea and turn it into a reality, yet crowdfunding may seem easy but there are some considerations to take on-board before starting. When a crowdfunding campaign fails, many business owners or project creators often wonder what went wrong. This blog takes you through some of the common pitfalls.
So why doesn’t crowdfunding work? Or, for better words, when crowdfunding doesn’t work, what happened? Below are some of the reasons crowdfunding doesn’t work and how LiveTree’s improved version of the typical crowdfunding platform can work for your business. LiveTree offers the best crowdfunding solutions for your project and can create successful crowdfunding campaigns for any project.
Define your crowd
The reason crowdfunding often doesn’t work is often due to weak marketing strategies (which can kill your crowdfunding project) and failure to define their crowd in order to get the right funding, recognition and opportunities. You need to consider who would be interested in your project and, more importantly, who would be willing to financially invest in your project. Defining your target crowd/audience defines who would be willing to back you financially or be interested in promoting your story. Consider the themes driving your project: Are there online forums, groups, location suppliers, or businesses relevant to your film? Could you reach out to those people? Are there bloggers or journalists that would be interested in telling your story?
While developing your career it’s important to have a good slate and a crowd that supports you. When you have a crowd, it makes it much easier for us to market you to raise more funding and introduce you to relevant partners like BFI.NETWORKS, Film London, RedRock Entertainment or any of our relevant partners. LiveTree is here to get you funded and develop your career.
What the industry needs
The industry needs a different kind of crowdfunding platform which focuses on the success of their campaign creators and can provide them with the kind of features they won’t find anywhere else. With many crowdfunding platforms, project creators are offered a crowdfunding platform and little else. Project creators need resources they can use to help build their businesses and grow their crowdfunding efforts. Features including videographers and legal advice, as well as other tools project creators need should be included in a convenient online directory.
Business owners know that it is good business to align themselves with non-profits and other charities. With existing crowdfunding platforms, there isn’t a non-profit element and that is something that can often add value to a crowdfunding project. Project creators need all of these features and more if they are going to succeed.
This is where LiveTree comes in. LiveTree understands that the non-profit/charitable organization element can help influence others to help promote a crowdfunding project, making it that much more successful and effective. LiveTree also offers a wide range of useful tools and resources that can help give projects the momentum they need to succeed.
Another advantage that LiveTree has over any other crowdfunding platforms is a sense of community. LiveTree has built their online community by focusing on both sides of the crowdfunding project and offering backers a financial incentive for promoting crowdfunded projects. LiveTree offers no hassle crowdfunding that will ensure your project’s success.
Why Should You Choose LiveTree?
If you are serious about growing or expanding your business, making your startup succeed and creating a successful and effective crowdfunding project, choosing LiveTree is an important start. LiveTree goes beyond being just a transactional marketplace and focuses on the success of project creators and offers the best crowdfunding solutions in the industry. This ensures that business owners can get the financing they need for their projects while helping others succeed in their crowdfunding projects as well.
Contact LiveTree Now to Get Started
The next time you are considering a crowdfunding project for your business startup or expansion, choose LiveTree and avoid the above reasons many crowdfunding campaigns fail. Contact a LiveTree professional now and let us create a successful crowdfunding campaign for you today!
When it comes to crowdfunding platform, it is very important that you understand that not all platforms are the same. With so many options to have to choose from such as Crowdfunder, GoFundMe, IndieGoGo, Kickstarter etc. it’s understandable if you are confused about all the options out there. Here is a quick handy comparison guide to help you choose the right one for your next project.
When it comes to getting your name out there, you might be better off going straight to Facebook (it’s free) than choosing crowdfunding platforms. As they rely entirely on your existing network in the hopes that they will spread the word for you. Although this is a good place to start it is a market that soon falls flat, which is why most of these platforms have a less than 30% rate of projects, which achieve their goals successfully. They do nothing to help you build or grow your network; you are more or less left to your own devices, sink or swim.
Kickstarter won’t give you a single cent if you don’t reach your goal, while LiveTree will. Kickstarter does, however, like LiveTree, offer a reward of appreciation to the contributors when a goal is reached. Crowdfunder and IndieGoGo offer little benefits in this regard when compared to incentivisation of the entire global LiveTree community to participate in your project. LiveTree’s fees are lower in comparison that opting to donate to charity won’t even put a dent in your budget, while the exposure and goodwill that comes from it are priceless.
Expert Support with Bonus Exposure
Unlike all the other platforms, LiveTree offers one on one support from day one through to completion of your project and beyond.When making one final comparison, the bottom line, it is clear what makes the most sense when it comes to selecting the right platform to crowdsource funds for your project.
LiveTree doesn’t have an all or nothing rule; as they recognise that projects evolve and adapt and how important it is to have flexibility. Backers of projects are given the opportunity to refund their pledge before the funding deadline and if a backer makes a pledge within two weeks of the funding deadline they will always have a minimum 2 week “cooling off” period. After those two weeks, the funds are then made available to the creator of the project at the end of the project.
Unlike these platforms, LiveTree has revolutionised the crowdfunding scene by introducing a concept called Branching. This gives people the opportunity to share your project on various social platforms, incentivising them with a commission if their share leads to a donation. LiveTree has connections with various charities; by donating a percentage of your earnings to these charities you are further exposed to their followers and an even greater audience, who will appreciate your goodwill. A portion of the commission that the Branchers earn can even be donated if they so wish. You do not get exposure like this from other platforms; in fact, GoFundMe clearly has a different model entirely; on their website that you should not expect to be assisted by strangers at all – they recommend contacting the media if you hope to gain outside assistance. Branching tools promote the growth of your network, which will grow to include other bloggers, as well as the greater creative community. For this reason, LiveTree is a firm favourite.
Crowdfunding campaigns involving creative projects such as filmmaking have often been unsuccessful or encountered difficulties in raising their required funds. This is because creative projects are often less popular and successful when competing against various other genres of campaigns such as technology. This has in turn resulted in many filmmakers and independent filmmakers feeling hesitant or fearful of embarking on a crowdfunding journey. This is where the LiveTree crowdfunding platform steps in and is able to assist creative individuals such as filmmakers by providing a crowdfunding platform that is uniquely tailored for creative projects and enables filmmakers to reach a wide audience and creative community. These advantages are specifically provided by the LiveTree crowdfunding platform and are not usually provided on the majority of other crowdfunding websites; making the LiveTree platform ideal for filmmakers and independent filmmakers.
Unlike some other creative projects, filmmaking usually requires a lot of financial resources in order to achieve and bring to life. For this reason, filmmakers, independent filmmakers and those making indie films often face the challenge of acquiring enough money and funds in order to make their films a reality. Crowdfunding therefore is a logical and fruitful route for filmmakers to take in order to raise the necessary funds to create their films. Crowdfunding was not available in the past, and filmmakers around the world have been reaping success from this wonderful opportunity that the modern world has created. It is therefore highly recommended that filmmakers take advantage of this opportunity in order to make their dreams a reality.
LiveTree is a unique crowdfunding platform that can particularly assist creative projects such as filmmaking. LiveTree hosts a number of different types of crowdfunding campaigns but unlike most other crowdfunding websites, LiveTree is especially helpful for creative projects such as filmmaking. The LiveTree team can help creative individuals such as independent filmmakers create the best marketing strategy and they even provide on-going help and support that is very hands-on. The LiveTree team not only helps creatives start and set up their crowdfunding campaign but also provides on-going assistance every step of the way to ensure that these campaigns are seen to completion. This can help to calm the nerves of any independent filmmakers who may feel anxious or even clueless as to how to create a successful campaign. LiveTree also provides the option for a portion of all funds raised during the campaign to be given to charity, and this also helps campaigns to increase their funding.
A unique aspect of the LiveTree crowdfunding platform is the ability to connect creative people such as filmmakers into a creative community. This is an advantage that filmmakers would otherwise not have, and allows them to connect with a larger audience than they would be able to by using their own networks. These creative communities can have a major influence on filmmakers and are filled with people who are looking to promote and sponsor creative projects and independent films. LiveTree can assist in partnering and exposing filmmaking projects and ideas to the right audience of people, and this allows filmmakers to have the confidence in exposing their creative ideas. Many independent filmmakers have become hesitant to share their creative ideas on crowdfunding websites because of the fear of being criticised or because of the fear of failing and not being able to properly promote their projects. The LiveTree team has acknowledged these issues and have designed a platform that is tailored for creative projects and provides assistance especially for creatives and filmmakers. LiveTree is therefore an ideal crowdfunding platform for filmmakers.
LiveTree will not only assist filmmakers in raising the required funds to begin their projects but will also help to connect filmmakers with the right target audience and support network. They will also provide assistance so that filmmakers can create a campaign that works for them. This gives filmmakers who may feel hesitant or nervous about creating a crowdfunding campaign the confidence in order to embark on their crowdfunding journeys. Receiving assistance from professionals who have helped to create loads of campaigns and who have extensive knowledge in how to create successful campaigns can give filmmakers the confidence they need. LiveTree provides support for creative projects, especially for filmmakers. Another example of one of the ways in which LiveTree cares for and encourages independent filmmakers is through one of the competitions that is provided exclusively for filmmakers. The winner of the competition is awarded £500 as well as access to BlackMagic cameras in order to create their film. This offer is exclusive to the LiveTree platform and is just one of the wonderful ways in which LiveTree supports filmmakers and independent filmmakers.
Since LiveTree is directed toward creative projects; the platform also attracts many people from all around the world who are specifically interested in viewing and sponsoring creative projects. Filmmakers are therefore able to attract more funding and support by utilising a platform, which places a major focus on creative individuals and filmmakers.
If you are ready to get started with creating your own crowdfunding campaign in order to create the film of your dreams, simply click on the link below in order to create your campaign with LiveTree; the best crowdfunding platform for filmmakers and independent filmmakers.
Kickstarter is the largest platform for crowdfunding a new business or creative project. Alongside it, the relatively new LiveTree is a just a sapling. But it’s growing.
When considering your options, there are two big questions you need to answer: Who are you funding for? And who are you funding from?
Who are you funding for?
Sounds pretty obvious: what is the project and how will the money be used? This will become the central framework to any good campaign, establishing why you need the money, and why anyone should hand it over.
To an extent you’re also funding for, well, the crowdfunder. Upwards of 8% of the money you raise through a Kickstarter campaign will go in fees.
But have they persuaded you why you should hand over your money?
Let’s have a look at what you get for that fee. The Kickstarter model relies on the creator’s own social media network to form the initial donor base. Kickstarter is a way to organize and activate your tribe, it does nothing to create or build it.
It’s not all about the money
Kickstarter follows an all-or-nothing set up, so you only get charged a fee if you reach your target, as do your donors. The idea is that it takes away the fear of giving money to a project that will be a dud, because it guarantees social proof, which is what we all experience before watching a new series on Netflix: if I’m going to sacrifice another twenty hours of my life mindlessly absorbed in another program, it needs at least three unprompted shoutouts on Facebook before I do.
If we’ve learned anything from recent global events, it’s that social (media) proof can’t guarantee we a good idea will get approval. In a great blog, Dale Pearson describes how ‘group-think and insularity have been hard-coded into our everyday lives via a vast online echo chamber’.
Social proof is no longer enough, and without it your project might sink. In fact as of August 2016, the success rate of fully funding a project on Kickstarter was just 35.85 percent.
Dale is right that this generation needs to be not just the ‘online generation’ but also the ‘networking generation’. But don’t worry, you wont have to engage your racist uncle in debate to break out of this echo chamber – LiveTree will help build a network of creatives (that you don’t have to see every Christmas).
Who are you funding from?
Like Kickstarter, LiveTree uses a rewards system, where a successful campaign will send thanks and goodies to its contributors. Unlike its rival, however, LiveTree also offers supporters the opportunity to become ‘branches’, and receive commission every time they promote further fundraising. Branches can support other projects and gain access to a network which extends into creative communities and beyond.
This means anyone in the LiveTree network could end up supporting and promoting your idea.
Crowdfunding has taken off partly as a result of the difficulty in accessing individuals and organisations who traditionally support such projects. What if, as well as developing an online community, you were able to open up opportunities with industry funding bodies and professionals? LiveTree does more than just provide a platform, they work with creators to support development before, during, and after their campaigns.
After the campaign, LiveTree helps creators to move beyond funding, and connects them with respected suppliers. If you don’t reach your target, you have the chance to make your case directly to your donors.
When an organisation is motivated by building communities and developing creative projects, it is in their interests to nurture them from the start. Projects need more than just capital to get started. It will ensure those projects are ready to fly before being launched, and will provide a network of branches to call home.
Rosamund Urwin unpicks the start-up rules of a new generation
A reblog from Evening Standard, Monday 18th April. (You can read the original article here.) You can also sign up to LiveTree using this invitation link.
The rules of start-ups are changing. Gone are the days when you had to plan every detail before launch — now entrepreneurs just need to hit “go”. As LinkedIn founder and tech investor Reid Hoffman puts it: “You jump off a cliff and you assemble an airplane on the way down.” If bank managers and venture-capital firms shrug their shoulders and turn you away, crowdfund or try new lending avenues. Most of all, you need to keep changing, developing, adapting.
London is ultra-competitive for start-ups. Here’s how the strongest survive.
Planting the seed
Research, schmee-search. In such a competitive market, entrepreneurs’ primary objective is to get their product out there fast. Better to send it out into the world with the hem unfinished than to see someone else wearing your outfit while you’re still making it.
As Robert Colvile writes in his new book, The Great Acceleration: “The latest craze is for the ‘lean’ start-up — start small, create a minimum viable product and be prepared to switch tack at a moment’s notice.” Hoffman puts it thus: “If you’re not embarrassed by your first version, you waited too long to ship it.”
Alex Head, the founder of catering company Social Pantry, can relate to that: “A resource you don’t have is time. I learned from the age of 15 — selling sandwiches off the back of my bike in Riyadh [Saudi Arabia] — what to do and not to do. I’m still learning.”
If there is some time, a new approach is small-scale peer research. Been to a dinner party recently, only to discover you’re actually there for a brainstorm about your friend’s business idea? This is (low-cost) market research for 2016. Sometimes these are straightforward ideas meetings with a hand-picked focus group from peers and former colleagues; at others, the wannabe entrepreneur is on the look-out for potential partners. You’ll know when somebody starts taking notes, and you’ll get asked for feedback afterwards.
“I was invited to one recently for a mindfulness business,” a fellow journalist tells me. “The other guests were a social media expert, someone in e-commerce and a management consultant. It was a guided conversation, so my friend could work out the best way of taking forward her idea.”
Sebastian Fernando is the founder of flavourme.co.uk. Launching at the end of the month, it is a sharing economy version of Deliveroo: it allows you to order home-cooked meals from your neighbours, delivered by flavourme’s fleet of drivers. It’s inspired by the cooking of Fernando’s Sri Lankan grandmother. Fernando, 27, reckons the most important piece of research is to look at why others who have done what you’re trying to do failed: “A year later there will be a solution.”
Another idea is to bring a business that someone else is already doing in another country here: home-cooked meal delivery is popular in the Netherlands and parts of the US. Jonathan Randall, who founded photobooth firm Flashmat last October, had the idea because a friend of his wife’s was already doing something similar in France.
Old school: commission market research from a specialist firm.
The new way: find out what works as you go along; the brainstorming dinner.
Head, 30, and Randall, 32, both self-funded their businesses, and Fernando applied for seed capital. But there are new ways to get funded.
“Funding has changed enormously,” says Toby Darbyshire, who co-founded solar firm Engensa in 2009. “When we set up Engensa, it was all about institutional investors and venture-capital firms. Now, it has democratised, with the rise of peer-to-peer lenders and crowdfunding.”
Growth Street is one alternative to a bank overdraft. “Over the past three-and-a-half years, bank supply of overdrafts for small businesses has reduced dramatically,” says James Sherwin-Smith, its chief executive. “If you don’t have a bank overdraft, you either have to get more expensive finance or you have to build up cash to survive a dip or if a client pays late. That’s money you’re not reinvesting in your business — hiring another person, say.”
Growth Street is a business-to-business marketplace to solve that: “We connect companies that want to lend because they have excess cash to businesses who want to borrow.”
Haggerston-based LiveTree, which launched two months ago, is another new funding model. Ashley Turing, its 37-year-old founder, explains: “We’re a crowdfunding platform and a marketplace once the product is built.” The model is to refer friends “because we believe personal recommendation is the most powerful way to get your product out there”. But while Google and Facebook collect users’ data, LiveTree returns the profit from advertising (skimming off a small share) to them. Users can do whatever they want with the profit they earn, including donating it directly to one of LiveTree’s partnered charities.
Interestingly, Darbyshire, 34, also says that the sums available from early seed and angel investor rounds have shot up recently. “The first round used to raise maybe £200k;, now we’re seeing people raise £2 million from a network of angels.”
Old school: venture-capital firms, institutional investors or a friendly bank manager.
The new way: crowdfunding, peer-to-peer lending or much bigger sums from seed capital or angel investors.
Fail to grow
Every entrepreneur stresses the need to innovate. “You don’t want a plan, you want an inkling,” says Joe Nelson, who founded TheyFit condoms in 2011. “You can’t be embarrassed to get it wrong. It’s not binary: if you mess up, you can keep playing the game. You still have 100 lives left.”
This is particularly true with online businesses, he says. “Everything is so fluid, you can change the website pages in the blink of an eye and be nimble.” Nelson, 34, would use feedback from every customer to improve both product and service.
If web-based, start-ups can do a/b testing from the beginning. That means visitors to the site will see one of two options. If there’s a big discrepancy in how much they go on to buy, the company knows which to choose. They can keep testing repeatedly to hone the site.
Sherwin-Smith, 35, found out the painful way why you have to keep innovating. He started his first business at school. Called Hitmatic, it was like an early version of Google Analytics. “It paid for my education. But Google bought one of our rivals [in the end] and our tech originally was better than theirs. I wish I hadn’t gone to university and had just worked on that.”
Head, who does the in-house catering at Brentford Football Club (150 people a day for breakfast and lunch seven days a week), argues having one consistent revenue stream is essential, especially in a seasonal industry such as contract catering.
Old school: everything polished on delivery.
The new way: fail fast, learn quickly.
Fernando is launching flavourme.co.uk in Dulwich first, before expanding to other parts of London. He’s going to advertise primarily on Facebook because it allows hyper-local targeting of ads. He says that ads can even be timed to appear when people are on their way home from work and potentially thinking about what they’d like to eat that evening.
For Randall, too, Facebook is his main place for advertising. “It allows you to target people with particular interests,” he explains. “People often have Photobooths at weddings, so I want anyone who’s engaged — weddings can be one of these interests.”
Edzard van der Wyck, 35, is the co-founder of Heist, which makes hosiery without seams. In his five-strong team, three of his staff do the social side. “We can behave like a retail brand, engage with our customers and react very quickly to what they want. It helps us to hone the product and you get immediate feedback.”
Head notes that social media is also an important recruitment tool. “I always ask in interviews ‘how did you hear about us?’ It’s usually that they follow us on Instagram or found us on Twitter.”
But it isn’t all about the new world of media, either. Nelson went on Dragons’ Den. Even though he failed to get funding, it had a huge impact for TheyFit.
“It doesn’t matter if you win or not. That’s a million people who’ve just seen your product and — unless it’s one of the really bad ones — a sizeable minority will agree with your idea. We had 7,000 hits a second at the peak of that, completely free. Those people didn’t all buy but sales still rocketed. The show gets repeated and you get another spike.”
He says there’s no need for a PR agent “as long as you’re willing to do stuff. Spend nothing, be clever, get on”.
Old school: hire a PR firm.
The new way: DIY and online marketing.
When to let go
Nelson sold TheyFit last year for $1.3 million. But the new advice — including from Kickstarter founder Yancey Strickler — is not to sell out too soon.
Fernando agrees with that. “I don’t want to be a serial entrepreneur, I want to do one thing really well. We’re a long-run business that requires shifting perceptions. It’s a bit like what Airbnb did: people couldn’t imagine renting out their homes before but now it seems normal. We want people to think, ‘Why would you go to Domino’s when you can order food cooked by your neighbours?’”
Randall’s eventual plan is to use the income from his photobooth business to move into other areas. “I’m looking at things that are more scaleable,” he says. “Start-ups are often burning cash to revolutionise something, but if you take an existing idea that works in another country, you can then put in place a manager while you can then go and pursue your passion project.”
He hopes that Flashmat would be the cash cow that keeps giving (and growing) but that he can use the photos that he owns either for “facial recognition, or other marketing uses. All the info I have could be valuable.” He notes that companies have been bought in the recent past not for their main business but for the information they hold on clients. “I’ll sell the business when it’s in a great state,” he adds.
Old school: sell as soon as a suitor comes knocking.
The new way: Please sir, can I have some more (money)?
Close your eyes and imagine a best friend… in fact imagine a friend that’s even better than your best friend if that’s possible. This friend is so good, he or she will always remember your birthday. They’ll remind you of your friends and family’s birthdays too. They know your favourite colour, your favourite food, what you like to do at the weekends, where you like to shop, what makes you laugh and what makes you cry. They also know where you’ve been on holiday for the last few years… your entire relationship history… your shoe size and maybe even what underwear you’re wearing. They’ll know your deepest, darkest secrets – the ones that you thought nobody knew and they’ll even be working tirelessly to figure out what you want to buy next…
All of a sudden they’re starting to sound like they’re not your best friend at all… they’re definitely at the top end of the “creepy” scale and you wouldn’t be unreasonable if you thought of them as a snoop.
In fact, this “friend” is the stalkiest stalker there will ever be, and the reason they are stalking you, is because the more they know about you – the more money they can make from you.
The “stalker” that we’re describing is actually a collective group made up of the search engine you use, the social media websites you go on and even your internet service provider (ISP). Between them, they collate information on everything you do in your life on a daily basis. These corporates make billions from your personal data.
“So what’s the problem?” you’re probably thinking… “if it’s happening to everyone, who cares?”
At LiveTree, we don’t believe that big corporations should hold control of being able to make money from your online activity. We think, that if it is going to happen – it should be transparent and you should be in control. You’re not a product to be sold for mega-bucks. After all, it’s your data, through online searches, things you share with friends, things you like and photos you upload.
That’s what LiveTree believes and that’s why we’ve developed a revolutionary, social marketplace which enables you to browse the latest fashion, search out the latest music and even connect to and help fund some of our partnered charities. But what makes LiveTree different from anything else, is that it’s built to help you make money transparently from the things that you would normally do anyway.
So if you’re ready to own the web and become an internet pioneer in the process, register yourself as a new user by clicking on the link below. LiveTree is an exclusive platform and once registered, you’ll need to wait for a special invitation before you’re able to begin your LiveTree journey.