"What has to scale is trust.” Tilt's crowdfunding platform is in it for the long haul
Having watched as Indiegogo failed to take action on crowdfunding sham after crowdfunding sham this year, seeing Tilt in early September take down the campaign for the Scribble Pen, which had raised $227,000 -- over twice its target -- was refreshing. In a blog post on the company website, co-founder and CEO James Beshara noted that the video for the miraculous pen that could write in any color was misleading and there were discrepancies in the basic information Scribble had provided Tilt. When you consider Healbe pretending to be from San Francisco on Indiegogo, or TellSpec shooting a video with a mock up of its device and pretending that it was a finished, perfected product, Beshara and Tilt were taking a proactive stance to protect integrity in crowdfunding that others have refused to.
“From a platform standpoint, it is about protecting future project creators, so they can launch and not be met with extreme skepticism, as well as backers not losing money,” Beshara tells me, the day after Tilt had pulled the Scribble campaign.
If you’ve been keeping half an eye open on the crowdfunding space, you might have an inclination to write Tilt (or Crowdtilt, as it went by until recently) off as the insignificant third guy on the scene, trying in vain to break into a scene that Kickstarter and Indiegogo have more or less locked up.
To Beshara this is small ball thinking. Today, yes Indiegogo and Kickstarter are the Beatles and Rolling Stones, the Armageddon and Deep Impact if you will, of crowdfunding. But he thinks that if you’re arguing that Tilt is late to the market, you’re ignoring just how early it is in the crowdfunding space. In the first five years, he says, nine million people have engaged in crowdfunding, a small fraction of a percent of the total market.
With Tilt and Tilt Open, an open source tool allowing for branded crowdfunding pages that can be set up with the ease of a Wordpress page, Beshara is helping create a site where people can get money for everything from a birthday party to a community project or traditional product launch, and different brands can fund special limited edition projects.
Beshara's version of crowdfunding is built upon a conception of it that goes far beyond the static definition we have now. He says he sees it eventually accounting for as much as 15 percent of all commerce on the web. Tilt isn’t a Kickstarter-killer now, but is building itself for a much different future. Fans raised $70,000 on Tilt to bring the Foo Fighters to Richmond, Virginia, McSweeney’s funded its 15th birthday party, and Soylent launched a brand new product. Everything from a band wanting to sell a new T-shirt to a traditional company looking to launch a new product has a place on Tilt.
Beshara says we don’t think of Amazon as “e-commerce” anymore, and in Tilt’s ideal future we won’t think of everything we do there as “crowdfunding” either.
Which is why Beshara thinks crowdfunding’s current existential funk needs to be solved, quickly.
As Beshara concedes, Tilt, like all other crowdfunding sites, are powerless to eradicate every single instance of fraud. So with that reality in mind, crowdfunding sites (cough… Indiegogo… cough) need to stop thinking of themselves as a neutral platform, simply facilitating the transactions that happen. A bad apple anywhere in the crowdfunding ecosystem hurts every crowdfunding company, at this point. Healbe was bad for Tilt, too.
“We want to remain neutral. It is the ideal position for us. But something like the Scribble campaign was misleading. The way we can remain neutral is by helping project creators, being upfront with contributors, and we didn’t feel like that was happening,” Beshara says.
“It’s about coming off the bench to police something as needed," he adds. "You have to take a human approach, not just create a policy. Fraudulent campaigns anywhere are a pyrrhic victory for all of us. The campaign might be successful, but consumers reading along in the press, following all of the ideas, they read about it and feel badly about crowdfunding on the whole.”
The central tension is between being an open platform scaling at speed and having a sustainable way to actively detect and ferret out scampaigns. “I don’t think by pulling the campaign we’re optimizing for scaling fraud prevention if we had 100 million campaigns. But it doesn’t need to be that complicated. What has to scale is trust,” Beshara says.
With the Scribble campaign, Beshara says that Tilt paid close attention to what customers were saying and what blogs were writing about it. He thinks that the ‘crowd’ element has a big part to play in preventing fraud.
“We’re learning as we go. You’ve got to take a principled approach. With Scribble it was very clear. We will get to a point when we won’t know for sure either way. I know we won’t be able to prevent all fraud. But we want to establish a reputation of really going above and beyond, so you’re allowing for people’s first interaction to be a very positive experience.”
I wonder aloud to Beshara whether with Tilt Open and turning crowdfunding into an open source platform like Wordpress, he’s taking the crowdfunding fantasy of totally democratized financing and co-opting it for major companies. He’s emphatic in his response against that.
“That’s conjecture, a complaint that might be raised today. Look at Wordpress, it started as a blogging platform and now it powers everything from CNN to Pando, as well as being a tool for the little guy,” Beshara says.
Tilt are launching more campaigns each day than Kickstarter, according to Beshara’s numbers, but the average size of the campaigns is half as small. Kickstarter and Indiegogo are built for a static life cycle, one thing, one campaign, a funding period, and a wait for rewards to be delivered. He’s helped build Tilt into a tool that makes crowdfunding infinitely more malleable.
How high Tilt flies depends on certain chips falling its way. A lot more people need to come to the crowdfunding party. Companies need to get behind the idea of using it to produce limited edition products. Groups need to find it easier for smaller projects than opening the checkbook and taking care of things offline.
Points must be given to Tilt, though, for preparing for a crowdfunding future that looks a lot different than its present and to Beshara for realizing that getting to the promises of tomorrow requires taking care of the problems of today.
“How often has a space been dominated by two breakaway winners, with investors or tech writers feeling like it was all but won, and someone comes out of nowhere? We think a billion people will be crowdfunding eventually. We’re trying to create a new crowdfunding tool for that day.”
[illustration by Brad Jonas]