During his two-day tour in New York, Indiegogo CEO David Mandelbrot stopped by DT Daily’s NYC studio to talk about what’s happening lately at the crowdfunding website, as well as the crowdfunding industry in general.
Since taking the position in 2016 (he previously served as Indiegogo’s Chief Operating Officer and Senior Vice President of Operations), Mandelbrot has been leading the company to profitability. Indiegogo, which launched in 2008, has raised more than $1 billion and the platform is now not only used by more than 10 million backers, major companies are launching new products there as well. The company has also moved beyond just being a crowdfunding platform, providing resources and support for budding entrepreneurs and startups to help them see their product from idea to reality.
“The big change in crowdfunding is that each big company [Indiegogo, Kickstarter, GoFundMe] has established its sort of specialty,” Mandelbrot said. “GoFundMe’s got a real focus on personal cause and nonprofit fundraising. Kickstarter is really focused on the creative community, with video makers, musicians, and tabletop game makers.
“Indiegogo, starting in 2016, became hyper-focused on product and entrepreneurs — really helping product entrepreneurs get all the way, from an idea in their head to a product in the market,” Mandelbrot added. “We really support those entrepreneurs by helping them go direct to consumers.”
It’s support and experience that many entrepreneurs lack, particularly in the early days of crowdfunding. They may have completed a wildly successful campaign, but that doesn’t mean they have the resources to get it made and into backers’ hands.
This leads to campaigns that fail to deliver on time or not at all — worse, if it had a wildly successful fundraising campaign, it creates a perception of something dishonest. Mandelbrot said that fewer than 1 percent of campaigns can be categorized as “scams,” and that Indiegogo has a trust and safety team that identifies and removes questionable campaigns.
Instead, Mandelbrot said that the big issue with failed products is “that product entrepreneurs face is that they raise money for their project, and they may not have expertise in manufacturing or logistics, so they run into challenges in manufacturing and delivering that product.”
“So what Indiegogo has done is that we have partnered with companies, like Arrow Electronics for manufacturing and Ingram Micro for shipping, to help entrepreneurs at each step of their journey to make sure they can ship products,” Mandelbrot said. “For example, Arrow Electronics — one of the largest distributors of electronic components in the U.S. — will review the bill of materials for the entrepreneur, to make sure none of the components in their products are at the end of their lifecycle and help the entrepreneur to ensure that they will actually be able to ship the product.”
For Indiegogo campaigns to check out, Mandelbrot lists the Mate X electric bike, Cosmo Communicator pocket computer, and Hydrow exercise machine as his favorites. His all-time best is the Flow Hive beekeeping system.
As for the future, Mandelbrot said, “you’ll continue to see Indiegogo doing more to ensure backers are ultimate getting the products that they fund. You’ll see more products with guaranteed fulfillment, establishing more partnerships to help ensure the entrepreneurs are successful, and even more large-scale companies using Indiegogo to launch new products and connect directly with consumers. Just last quarter both Lego and Gillette actually launched new products on Indiegogo as a way to connect with their audience and demonstrate innovations even large companies are doing.”
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