Crowdfunding 201: Movie Cloud’s Messaging Problem

One of the harder parts of writing about crowdfunding campaigns, especially campaigns in progress, is writing about failure. There’s a line you don’t want to cross, in terms of hyperbole, that you don’t have to think about when a campaign is succeeding, because no one ever gets mad at you for going overboard with praise.

Sometimes you’re a vocal minority, and sometimes the failure is easy to see in retrospect. But a campaign in progress is a different prospect entirely. Can they correct things? Will they? Is a rally brewing?

This week we’re going to do things a little differently. First, I put this question to my twitter followers:

Let’s try something. Why is Movie Cloud’s campaign failing? (I may quote you) bit.ly/JuLeKq

— Lucas McNelly (@lmcnelly) June 27, 2012

Dov Simen’s IndieGoGo campaign for Movie Cloud has gotten a ton of press from all over the place, due largely to Simens’ name recognition and the ambitious nature of the campaign. Yet, with 10 days left, it has yet to break 15% of the $315,000 all-or-nothing goal.

That’s a pretty big hill to climb. If it didn’t have Simens’ name on it, we’d assume it was dead in the water. And it might be. Most people have seen the campaign (the pitch video has over 10K views on YouTube), but very few have backed it. Why?

Let’s go to Twitter.

@lmcnelly The pitch video is so abrasive and incoherent I bailed after 3minutes…with no clue how Movie Cloud works. And Chris Dodd? Why?

— Brendon Fogle (@bfogle75) June 27, 2012

Four different people referred to Lewis Black, which is a lot. Lewis Black is pretty awesome, but he’s a professional comedian and the yelling works in that context. In a pitch video, it just comes off as someone screaming at you. Or, to quote Gregory Bayne, “Folks don’t like to be yelled at when they’re being asked for money.”

From what people have told me about Simens’ course, that’s kind of his schtick. But it isn’t always. For example, here’s a video he did with Film Courage where he walks them through the Movie Cloud concept.

Which version would you rather get behind?

But more important is Brendon’s point about not understanding what Movie Cloud is after 3 minutes. He’s not alone. If someone gives you 3 minutes to watch your pitch video and they still don’t know what you’re raising money for, then your pitch video needs work. It’s as simple as that. A pitch video is no different than any other type of pitch. If you can’t sell it before the elevator doors open, then you need to re-think something.

@lmcnelly The product is unclear. Wants to be everything to everybody. Do we really need another service for actors to post headshots?

— Joe Gold (@joetgold) June 27, 2012

Movie Cloud is a big, sprawling concept. No one denies that. But is that working against it? If Simens can’t explain it in three minutes, then is it too much for crowdfunding, which generally works better when someone’s attempting to fund one tangible thing? Why not break it into component pieces? I went to the source, Simens’ business partner Derek Christopher, who answered some questions over email.

We’re coming to people with a revolutionary concept. How can you explain that in just a few paragraphs and a few visuals? It’s not a film where we can just show you a trailer. It’s not a watch where we can just show you the watch. It’s a movie theatre, a movie studio, a movie bank, a filmmakers’ resource center, a social network…It’s a lot to explain in the limited space we have.

Did we consider breaking it into smaller components or a smaller version? Absolutely. But that’s not fun, and it would have taken away from the grand and bold vision of what Movie Cloud is. We believe in Movie Cloud, and we think the people do too. Sure, some people may think the concept is too broad, but an equal amount of people understand the magnitude of what it is we’re trying to do.

There’s a fine line between “grand and bold” and biting off more than you can chew, a line that becomes more crucial when you opt for the all-or-nothing option from IndieGoGo.

First of all, a lot of people don’t even realize IndieGoGo has that option. Obviously, that’s the only option on Kickstarter. So why go with IndieGoGo over Kickstarter when you’re going to be facing an uphill battle to explain that to people? Christopher points out correctly that the “flexible funding” option puts artists in a “quandary as to how to deliver the product we not only wanted to, but promised our supporters”, should they only raise a portion of the goal. It’s a point that a lot of people fail to grasp when deciding on a platform.

So, then you’d go to Kickstarter, right?

We liked IndieGoGo because it better represented the entrepreneurial spirit of Movie Cloud. It’s the upstart, the underdog. Kickstarter is great if you have a single project – a movie, a new printer, a videogame. But IndieGoGo is better suited for start-up businesses and entrepreneurial ventures. It’s no mistake thatIndieGoGo just announced $15 million in new VC funding. It’s funny, at the start of our campaign everyone said, “Why not Kickstarter?” And we would explain why. After IndieGoGo announced they received $15 million in funding, no one is asking us that question anymore. We saw it coming.

I think there might be a mentality behind this answer that shines a little light on it. Your crowdfunding platform is not your business partner, not in the traditional sense. Choosing one over the other means very, very little the second after your campaign ends. During the campaign, it means everything. You aren’t going to be working with them for the next 2 years, so the current round of VC funding for either platform is completely meaningless to your project. So is the growth potential of the platform. Maybe it affects your next campaign, but for the one you’re about to launch? All you care about is what platform will be the best fit for your campaign over the next 30 or so days. And right now, if you’ve got a U.S.-based, all-or-nothing campaign, there’s no reason to go anywhere but Kickstarter. None. Will that change in 6 months? Or 6 years? Maybe. But why do you care? Your campaign will be over by then.

@lmcnelly: Too large a concept. No description of the technology behind it. It’s a tech company with no tech in place. No demo. No substance

— Matt Watkajtys (@mattwatkajtys) June 27, 2012

I quoted this tweet in my questions. Christopher’s response:

One of the reasons we are looking for $315,000 is so we can fully integrate the elements we have together. We could show you the Movie Studio…but what makes it cool is how it will integrate with the social network. We could show you the social network…but what makes it cool is how it integrates with the movie theatre. We’re a start-up in the truest sense of the word. If we had the entire Movie Cloud up-and-running already, and all of the pieces we’ve created were already seamlessly integrated so we could show you a killer demo, there would have been no need for us to go on IndieGoGo. So to call us a “tech company” at this stage of the game is very premature. We’re a start-up with a revolutionary concept and business plan, and a lot of the elements created and ready to go. But showing the elements separately isn’t sexy. It’s the whole package that counts. A lot of companies have the technology, and it doesn’t mean a thing. Look at Prescreen, for example. They had $1.4 million in funding, the technology, and it was started by executives from Google and Zoosk. Google! And what happened? A few weeks ago they announced they were going out of business. With Movie Cloud, you’re contributing to a start-up, a revolutionary idea that will shake up Hollywood and how people make and see movies.

But doesn’t that feed into the issue of not knowing what Movie Cloud is? If you’re claiming to revolutionize Hollywood, people need a proof of concept before they’re going to get behind that. What does the software look like? How will it function? It’s just not there. There’s a lot of hype, and a lot of hyperbole, but very little substance. I’ve been researching this campaign for 2 days, and I’m still not sure what Movie Cloud will be.

The rest of the interview is below (with some commentary in italics):

McNelly: The campaign hasn’t posted a backer update in 29 days. Why not?

Christopher: Most of the updates we do are on our Facebook page, or via e-mail because most people just send us private e-mails with questions. But you’re probably right – we should post more updates on the campaign page. But I probably respond to 10-15 e-mails a day – everything from people wanting to invest in Movie Cloud for equity, to people asking technical questions, to people asking if they can change the type of pen they picked.

McNelly: What was the thought process behind starting the perk levels at $29? Especially since IndieGoGo’s own FAQ recommends starting at a lower tier. Why is the highest tier only $1,129?

Christopher: The perks are one of the most difficult parts of a campaign, because you never really know what’s going to work. What most people don’t realize, though, is you can contribute as little as $1 – which people have. The $29 is just a starting point to actually receive something tangible. Plus it just felt strange to say, “Give us $5…And we’ll thank you.” That just seems so lame. So the $29 perk was really us trying to give people something cool – a personalized certificate they could hang on their wall, and permanent mention on the Movie Cloud “Founder’s Wall.” On the opposite end of the spectrum, we kept the highest tier on the lower side too because we wanted to make sure that people felt they were getting more than their money’s worth regardless of what level perk they chose. For example, if you pick the $1,129 perk, you not only get a Movie Cloud subscription, but you get classes by the biggest gurus in the world on filmmaking and screenwriting. The classes alone are worth more than $1,129. That was really our thought process – to come up with amounts and perks where people felt they’d get their money’s worth.

People can give less than $29, but they aren’t. As of last night, only 17 people had backed the campaign and not selected a perk level, which is lower than you’d expect from an average campaign with a $1 perk. So people aren’t giving less than $29. They aren’t giving anything. That’s precisely why you have a $1 perk, so people know at a glance that they can give $1.

I probably don’t have to tell you that $29 is a lot for a certificate, but it is. Consider that most campaigns will mail you a DVD at that level. A certificate is probably a $10 perk. That’s a pretty deadly combination.

McNelly: I’m going to presume that the classes Simens teaches has resulted in a pretty large email database. Every filmmaker I’ve spoken to who has taken the class has said good things about it. Yet, they aren’t backing the campaign. Why do you think that is?

Christopher: For a lot of people, it’s financial. People are hesitant to pledge $100, $250 or $500, because who knows if they’ll need that money three or four months down the line? That’s understandable. The people who’ve taken Dov’s class LOVE Movie Cloud, and they’re the ones Facebooking and tweeting about it. I can’t tell you how many people have said, “I want to contribute, but I have rent to pay.” Or “I want to contribute, but I just lost my job.” We’d be real assholes to say, “If you really believe in it, you’ll contribute!” That would be ridiculous. People should take care of themselves and their families first, and then, if they have the money, they can consider contributing to Movie Cloud.

Movie Cloud’s backers are coming in at $207/backer, which is nearly triple the average campaign. It’s even higher when you consider there’s not even a $5,000 perk level to skew it higher, much less a $10,000 one (we don’t know what individual people have actually given, of course). Part of what makes crowdfunding work is that a lot of little contributions add up to big contributions. So, yes, people are hesitant to give $100. But there’s a big difference between $100 and $5.

McNelly: How would you say the campaign is going in comparison to your expectations?

Christopher: We would love to have seen it come out of the gate faster, but we believe we’ll have a big, big, beg ending. Movies aren’t made by the first or second acts…it’s wowing them in the 3rd act that people remember.

McNelly: If you started the campaign today, what would you do differently?

Christopher: Woulda, Coulda, Shoulda. We’ve talked about it ad nauseum – different perks, different copy, different visuals, different marketing. We’ve put together a campaign we’re very proud of. Just because something doesn’t meet your expectations the first time, or doesn’t succeed the first time, doesn’t mean it’s bad or misguided. It just means it didn’t work the first time. It just means you take a step back, reevaluate the situation, and try to come out of the gate stronger and faster the next time. We still have over a week to go, and the momentum has been building. We’re still in the race.

McNelly: What happens to Movie Cloud if the campaign fails?

Christopher: Movie Cloud will happen whether the IndieGoGo campaign succeeds or fails. Ask me in 10 days when the campaign is over.

Extra Credit

As we predicted last week, Seth Godin’s campaign has completely flatlined. It seems to be pretty much dead in the water. In other words, the tribe isn’t growing….Whoopi Goldberg has a documentary on Kickstarter…The German LGBT film The Other Side of the Rainbow is raising money for post-production on IndieGoGo. They’re all-or-nothing, but being European, Kickstarter isn’t an option for them….M.J. Slide is raising money for her short film Those Lighter Fluid Days

Lucas McNelly is the filmmaker behind A YEAR WITHOUT RENT, UP COUNTRY, BLANC DE BLANC, and GRAVIDA. He consults on Kickstarter campaigns for a living. He hasn’t lived anywhere in a long time.