How can a new crowdfunding platform create social change? We spoke to founder of tech for good crowdfunding platform UpEffect about how we can support sustainable projects and make our digital future better.
UpEffect is an award-winning crowdfunding and support platform for social impact startups. Whilst most people criticise crowdfunding a cynical marketing tool, UpEffect have a different approach, they actively encourage people who are using their platform to treat their campaigns like a 30-day marketing campaign and have cleverly spotted the value in the data that comes with a crowdfunding campaign, using UpEffect gives startups market validation, traction and access to funding all in one place. We’re really excited about what Sheeza is making and the impact UpEffect could have on the technology of the future.
Q: Tell us about your background
A: I’m a computer scientist, project manager and a lover of technology for good. Though the core of my career has been focused on delivering IT solutions for clients, since a young age I’ve maintained a keen interest in amplifying impactful solutions for global issues. From working for non-profits and social enterprises to organising overnight teams to lead fundraisers for underserved causes, I've seen first-hand how limited the impact of a donation can be. Billions of people across the world faced with a multitude of problems, lack of access to clean water, poor nutrition, expensive medication, limited educational resources, and they spend years waiting on external bodies to secure funding, come in and essentially, save the day. Sometimes the solution's impact lasts a few weeks. Sometimes one or two years. Without sustainable measures, these solutions fail to deliver on a long-term basis.
Thankfully, the rise of social entrepreneurship has meant that people are starting to take it upon themselves to find long-term and sustainable answers to these challenges. Which is why I founded UpEffect; a tool that harnesses digital tech to create social change around the world with the use of a crowdfunding platform. We connect those with the means to contribute to change, with ground-breaking ideas and sustainable projects to carry it through to high impact.
Through UpEffect, I'm able to champion these solutions and help these entrepreneurs build an entire community around these ideas to help bring them to life and eventually turn them into movements.
Q: So what exactly is UpEffect and how does it work?
A: Raising capital and gaining traction for a project or an idea can be a daunting task for startups. Traditionally, entrepreneurs do one of two things: 1) seek loans and pay high interest or 2) spend months pitching to investors and end up sacrificing a slice of their equity pie. Given that startups need to focus on accelerating growth, raising funds and gaining market validation has become a huge problem for early-stage companies.
This is where UpEffect comes in. It’s a rewards-based crowdfunding and support platform for products addressing today’s greatest societal challenges. We vet companies based on their purpose and profit, impact KPI’s and credibility of team. Selected companies then benefit from our network of crowdfunding experts, social entrepreneurs, marketers, videographers and much more to help them convert their idea into a tangible campaign. We're dedicated to supporting social change - be it environmental, social, healthcare - to bring people together and provide them support to harness their innovations into rewards for everyone involved.
Q:. Can you give us an example of a project on your platform?
A: The Social Innovation Lab (SIL) was founded in 2013 to facilitate driven young entrepreneurs and social organisations in tackling social challenges through the combination of humanistic knowledge and sustainable business practices. Their goal is to catalyse a moral re-imagination of contemporary societies. Their crowdfunding campaign enabled them to deliver a summer incubation program in Hunza Valley, Pakistan to help women entrepreneurs make their supply chains more sustainable.
SIL’s community engagement efforts have resulted in spreading the amazing story and craft of women carpet weavers at Gulmit to the rest of the world. As part of this exercise, the SIL team was able to concretise the Gulmit women’s supply and value chains, get them access to urban markets in Pakistan and beyond, as well as arrange an exhibition for them in Lahore at the Lahore University of Management Sciences.
Q: Why is it so important to have a separate platform for social good products? Why can't an existing platform do the same job?
A: There are great brands in the market, no doubt, but statistics have shown that the major platforms have failed to support early-stage entrepreneurs, particularly social entrepreneurs who seek a wealth of educational resources and support when starting out. More than 50% of crowdfunding campaigns fail and on Kickstarter alone, approximately 9% have failed to deliver a single reward. How much do we know about the impact of funds being channelled into these campaigns?
At UpEffect, we focus strictly on impact KPI’s to ensure entrepreneurs are frequently engaging with their funders on their impact metrics. Not only this, due to intense competition for visibility on the major platforms and with hundreds of new campaigns launching every day, niche products disappear amongst the clutter. We present an ideal audience for social good products to reach their target consumers to maximise impact.
Q: What are you working on at the moment?
A: We’re currently connecting the key players within the ecosystem to ensure social entrepreneurs have support from ideation all the way through to implementation and market launch by engaging with accelerators, incubators, educational institutions and investment funds.
Q: What about funding for UpEffect, how are you funded at the moment? Would you turn to crowdfunding?
A: I’m a firm believer in bootstrapping. We’ve been self-funded so far and I think companies don’t do this enough. When you’re short on cash, you’re forced to think creatively and put in the much needed effort to make the business succeed. For example, instead of paying for automated systems to thank your customers, you focus on building great one-to-one relationships by sending them personal thank you notes. You also walk away with a wealth of knowledge by teaching yourself skills in the absence of resources.
Furthermore, you’re in full control of your company when you have no investors telling you what to do in the early days of the business as you still figure things out. This allows you to adapt, pivot, and progress at a much faster pace. With that said, we do believe that when bringing great investors on board, not only are you adding to your pockets but you're strengthening the company intellectually.
Crowdfunding is an option we have considered almost every day but we have to keep reminding ourselves that it’s far better suited for product-based companies, unless it’s an equity crowdfunding campaign which I think we’re not quite ready for yet.
Q: Why do you think traditional methods for funding, eg vcs / investors aren’t able to support the growth of social good products?
A: There is a huge growth in impact investment funds being initiated which I’m absolutely thrilled to see but as with any product, it needs validation prior to investment and crowdfunding presents the perfect environment for this. As a platform, we’re presenting vetted companies for impact investors to select for their portfolios.
Q: What are your top tips for people who turn to crowdfunding?
A: Too often, entrepreneurs launch a crowdfunding campaign on a platform and anticipate “platform traffic" to convert into “campaign customers” and by the time the campaign is over, they feel like they’ve been conned. In their defence, the major platforms have done a poor job at educating the market on crowdfunding.
The number one tip and the most important tip from me would be to treat crowdfunding like any marketing launch - if you’ve decided to take a product to market, then be prepared to put in the hours to make your business succeed. Crowdfunding is a 30-day marketing campaign, it’s as simple as that. And in order to win a marketing campaign, you need:
Q: Usually people criticise the idea that crowdfunding is now used as a marketing tool...
A: We don’t. We strongly encourage it. It’s a fantastic way for startups to validate their ideas before they present it to investors and in fact, many companies we have dealt with have come to us after investors have asked them to try their hands at crowdfunding. It’s low-risk and there are no upfront fees, which is just what every new entrepreneur needs. It also allows investors to see first-hand how far entrepreneurs are willing to go to make their business work and whether there really is a market out there for the product.
Q: You recently took part in 5050tech Challenge, could you tell us a bit about your experience there and why it's so important to support women in tech with events like this?
A: 5050tech Challenge was an exhilarating experience - so much love and support from the startup community for female tech talent was truly wonderful to see.
According to TechCrunch only 18% of startup founders are women. Only 3% of businesses that receive venture capital are run by women, and investors currently allocate just 15% of their capital to female-founded startups. It’s incredibly important that the ecosystem begins to nurture a similar environment to #5050tech where female founders are given a platform to present their ideas to a room full of media, investors and key leaders. More importantly, having men involved in the same conversation is what will really move the needle and I was thrilled to see so many male supporters in the room. Bravo!
Q: So what does the rest of 2016 hold for UpEffect?
A: In 2016, we plan to impact hundreds of untapped communities that are underserved by financial platforms to enable anyone anywhere in the world to leverage our tool to launch a product and address a common societal problem.