Crowdtilt launches Crowdhoster, a WordPress for crowdfunding

James really needs to do an AMA of some kind - his story is awesome. His original idea was a microloan site for impoverished areas, but the tightened regulations around the 2008 market crash made that idea completely infeasible and he lost ~$20k in software investment. He pivoted to this as a way to re-use his (horribly messy, and - as he would later find out - completely unusable) codebase he'd paid so much for.

I still have the picture of the cup of coffee he bought me when explaining all of this and asking if I would be employee #3...

[1] http://perldancer.org/

When we launched the Lockitron campaign last year we had no idea if going off platform (i.e. not using Kickstarter) would work. What we found is using a self-hosted crowdfunding solution has a number of benefits which make it a better option than using Kickstarter or Indiegogo.

1) You capture long tail traffic. Launch day press directs to your site, and you can continue making sales after your campaign closes. For customers not willing to provide payment information you can still capture leads with an email signup. I won't disclose numbers here but this is hugely significant. There is a reason it is point number 1.

2) Order creation dovetails nicely into account creation. Managing shipping and payment information after a campaign closes is hugely stressful but can be even more so if you have to go through an intermediary that limits access. Getting people to create an account independently and as a second action months after they purchased the product but before it ships is unnecessarily painful.

3) You control look and feel. Not just important for establishing brand, but also for A/B testing, retargeting, and meaningful analytics.

4) Mitigate risk. You select your payment processor or can use multiple if necessary. A handful of crowdfunding campaigns have been torpedoed for both legitimate and illegitimate reasons. Kickstarter capped Lifx's raise a few days into the campaign after a few negative media pieces saying the company could not deliver what it promises, citing Phillips $5 million R&D expenditures as proof. At this point in time it appears Lifx is on track to deliver, but it is unfortunate that they had their knees cut out from under them. It is not unimaginable that your own campaign could be threatened by a spurious patent troll.

5) No arbitrary guidelines. In order to make an honest effort to be a donation site and not a pre-order site, Kickstarter prohibits you from "selling" items or offering "rewards" in bulk. These linguistic gymnastics get in the way of clear communication and prevent you from capturing multiple purchases. Lifx for example was only allowed to "reward" backers with a single lightbulb rather than allowing them pre-order multiple as most people would expect to do when buying lightbulbs.

6) Less risky than you would think. At this point there have have been a number of $1 million+ self-hosted crowdfunding campaigns. See Lockitron, Soylent, MYO, and Tile.

When people ask about building their own crowdfunding solution I point them at Crowdhoster. They have taken the work we did when we released our Lockitron crowdfunding code (Selfstarter) and turned it into the standalone solution it needs to be.

If you are crowfunding a company which needs to capture long term users and not launching a weekend project, self-hosting your campaign is the way to go.

The huge opportunity for startups currently is in planning, campaign analytics, and prediction markets for campaigns. Crowdfunding needs to be quantified like the financial markets so that information is more readily accessible to buyers and sellers to drive efficiencies (as a buyer it's hard to evaluate the trustworthiness of the seller, and as a seller it's hard to evaluate what the unexploited opportunities are).

Eventually crowdfunding might overtake the ownership industry and we can live in a real open source economy.