Potato Madness. It all started in Columbus, Ohio; a man wanted to create a popular side dish — only, he asked the world for funding. But what was originally a modest $10 goal to create his first potato salad became a project enticing over 6,000 supporters from across the globe to contribute more than $50,000. All of this was possible in the span of 2 weeks. Such is the power of crowdfunding.
For those that don’t know, crowdfunding is a form of alternative lending which compiles funds from various backers to finance a business or an initiative. Generally, these investments are met with rewards or perks, whether it is a piece of merchandise or a simple “Thank You” letter. Crowdfunding platforms, like Kickstarter, are typically created to fund ideas; they can be inspirational, innovative, or just plain silly.
The campaign Zach Brown created wasn’t for a marketable product, but evolved from its initial conception as a joke into a web-fueled statement. Pledging to an online potato salad not only brings laughter and a sense of community to its contributors, but also shows that such whimsical projects can achieve viral and financial success.
Although potato salad is a strange example for raising capital, aspiring entrepreneurs can learn a lot about successful crowdfunding from Zach Brown’s project. First off, he kept his Kickstarter pitch short and sweet. “Basically I’m just making potato salad. I haven’t decided what kind yet.” Under risks and challenges, he comically notes that “it might not be that good. It’s my first potato salad.” Maybe it was the simplicity of the project that caused it to go viral. Maybe it was the modesty. Maybe it was because it was just plain funny.
Although a humorous pitch isn’t always the best way for small businesses to raise capital, accessibility and simplicity are essential for audience engagement in a successful Kickstarter campaign. One way Zach Brown has maintained active engagement with his audience is by regularly updating his Kickstarter page. These updates include videos and links about his growing success, as well as promote additional awards for contributors. For various crowdfunding ventures, online credibility is defined not based on a campaigner’s credentials but by his or her activity and influence on the internet. For the aspiring entrepreneur looking to crowdfunding for additional financing, online credibility is essential.
While crowdfunding does have it’s perks, there are downfalls. Crowdfunders are able to raise funds for their projects in a seemingly inexpensive fashion, however, the rewards promised to the donators in exchange for funding can be costly and time-consuming. Simply fulfilling that promise for many crowdfunding entrepreneurs can pull their focus, distracting them from actually accomplishing their goals or creating a marketable product. For example, Zach Brown has the challenge of delivering a bite of his potato salad to homes across the world, an expensive ordeal that hardly seems probable. And because crowdfunding is considered an additional source of income, taxes are applied to the funds, which further diminishes the money available for the project. Finally, donators, although they’re highly discouraged from doing so, have the option to opt out of funding the campaign.
The reality is, while there are successful crowdfunding projects like the potato salad campaign, many of these projects fail to meet their goals. Crowdfunding in a way has become it’s own economic system, with countless competitors in the market fighting for funding. Therefore, critics of the potato salad campaign consider it appalling that a simple side dish is able to collect thousands of dollars, especially when there are impoverished people asking for help on fund-raising sites like GoFundMe. Does the creation of a potato salad really trump the needs of homeless and hungry?
Several online commentators have demanded a large portion of the funds to go towards charity. However, Kickstarter prohibits crowdfunders from donating their money to charity. But Zach Brown is a charitable guy who’s doing all he can to put his funds into good use. And also, hopefully, make some potato salad.
Image Credit: Andrew.T@NN, Flickr.