4 Things to Love & Learn About the American Heart Association’s Crowdfunding Challenge

4 Things to Love & Learn About the American Heart Association’s Crowdfunding Challenge

On Valentines day, it seems fitting to discuss matters of the heart.

The American Heart Association (AHA) is doing something innovative to improve heart health by 20% by 2020.  The AHA issued an Open Innovation Challenge to entrepreneurs in the medical marketplace to improve heart health.  Currently they are in the final stages of selecting the winner and will announce the winners on March 6th.  The AHA is using the crowdfunding site Medstartr to run the program.

What is the challenge

Here is the challenge the AHA issued to potential participants:

“Our Open Innovation Challenge invites you to create a solution and submit your early stage product that uses consumer technology to help people prevent and/or manage cardiovascular disease and stroke. We know the next big idea is out there in the crowd, and our challenge gives innovators the chance to win money and share their invention with the world.”

What entrepreneur doesn’t want to take on that challenge?  “You mean to tell me I can share my invention with the world and get money for doing it?  Awesome, I’m in!” said the medical entrepreneur.  They even said “we know the next big idea is out there in the crowd”, for the optimist this is all they need to hear!  This type of challenge stirs the competitive spirit.  By putting up the funds for the challenge it allows the creators to concern themselves with what they do best: design solutions to existing issues.  It also allows the investors to do what they do best: analyze an idea to see if it’s scalable.  This challenge allows people to do what they do best and leave the rest to the others.

How does it work

Medstartr is a crowdfunding site dedicated to the medical profession.  Medstartr’s website boasts that their model finally makes it possible to crowdfund in this sector.  They also boast a 68% success rate with their projects.  To put that in perspective Kickstarter is at about 44% while Indiegogo is at 34% according to the Canadian Media Fund.

Medstartr says their projects are too important to fail.  They offer many benefits to those who campaign on their site such as editing copy, providing a mentor, promoting the idea and partnering with another expert just to name a few.  The number of services offered to individual projects and the opportunity to partner are helping the success rate remain higher than the industry average.

Projects that tug my heart strings

Captureproof is an app that allows doctors and patients to use videos and photos to explain symptoms, track progress and get faster diagnosis with fewer appointments.  It is compliant with health care laws like the Health Insurance Portability and Accountability Act (HIPAA).  This idea is leading the way for the challenge at 39% funded.

WellTexts, a service that provides text message reminders when to take medication.  It does not stop there though, patients must respond or the app sends a to other people who look after them.  Talk about accountability!  The online portal enhances the functionality because it allows the clinical staff to access who has taken the medication and who has not.  Because the service has a well rounded group of interactive platforms it provides benefits to the patient, the loved ones and the medical professionals.

What’s to Love & Learn

Love: 3 Winners all get $25K then present to a panel.  I love this idea because it includes more ideas that will get funding. As opposed to a winner take all mentality this idea will shine the light on many people with great ideas.  I think of American Idol as an example of how this can play out in the “losers” favor.  Jennifer Hudson was in 7th place in her season of American Idol, what about the other 6?  They are not even close to her level of stardom.  Her album won a Grammy and Hudson went on to win an Academy Award for Best Supporting Actress.  Amazing!  Somebody saw talent and tweaked it from singing to acting and here you have a star.  The potential is here as well because the 3 finalists will all have a stage.  Regardless of who wins it gives them all a chance to impress perhaps a different panel of judges.

Learn: A brand or an association can influence entrepreneurs in their market to run a campaign.  Then they can fund the best ideas, as opposed to creating the idea on their own.  Nonprofit organizations who are always looking to invest in innovative ideas can learn from a contest like this one to fuel innovation in their own industry.  Watching the challenge grow to the popularity it has, tells me that it can work in other industries as well.  Now as important as the heart is to the human body, there are other industries that speak to a consumer’s soul.  The organization that has the capital may not be the most creative or solution oriented group.  When you have entrepreneurs innovating out of necessity or passion you can have some rich ideas blossom.  These larger organizations can use challenges to start a conversation in a marketplace and allow the crowd to bring out ideas.  

Love: The top 10 all get to keep their money.  So no matter what happens their time will not be fruitless.  I know that we live in the “everybody gets a trophy” society, which teaches people that it is ok to lose.  I am not ok with that.  It is important to recognize that a good idea is still a good idea and deserves whatever funding they earn.  Just like there is a person that “needs” an Apple iPhone there is also a person who needs the Kyocera Kona to make phone calls.  For every person that “has to drive” the Mercedes Benz E350 sedan there is still a need for someone to drive the Kia Optima.  Just because you are not the winner does not mean you do not provide value to the market.  Allowing the top 10 submissions to keep their money and add value to the marketplace, helps achieve the AHA's ultimate goal of bringing consumer technology into the fold to reduce heart problems.  

Learn:  The partnership aspect of the site is quite intriguing.  They have over 50 partnerships with other organizations from venture capitalists to government entities to hospitals.  This platform allows the larger organizations to place challenges in the marketplace for smaller companies.  The smaller companies can operate with a great sense of certainty knowing that they are working on an idea that has an opportunity to be funded.  This takes some of guess work out of the equation.  As opposed to rolling the dice and hoping your idea is what an investor is looking for or vice versa where an investor is looking for that gem.  The partnership aspect allows the attraction to occur without the chance.  It is like the difference between going on a blind date from a random dating site or being setup by your best friend and you already know the other person’s preferences.  While you might hit it off with the random encounter, chances are good that if a third party puts you together based on your needs it will be a better fit.  Currently they have over 100 partnerships and have launched other types of campaigns to encourage these type of interactions.  

On March 6th it will be interesting to see who does well and wins the contest.  It will also be interesting to see how other crowdfunding institutions put in place a similar model to their campaigns.

Your Fundit,

Thomas S. Wilkins

Follw me on Twitter @tswenterprises

Add me on LinkedIn Thomas S. Wilkins

+Me on Google+ +Thomas Wilkins

Sources

http://associationsnow.com/2014/02/crowdfunding-help-decide-next-big-thing-heart-health/

http://www.medstartr.com/aha

http://about.medstartr.com

http://crowdfunding.cmf-fmc.ca/facts_and_stats/how-likely-is-your-crowdfunding-campaign-to-succeed

   

http://www.billboard.com/articles/columns/reality-check/513688/top-24-american-idols-of-all-time?page=0%2C2

http://starmagazine.com/2013/05/15/10-most-successful-american-idol-contestants/

http://www.kyocera-wireless.com/phones/

Some Crowdfunding History: 3 Lessons from Lady Liberty

Some Crowdfunding History: 3 Lessons from Lady Liberty

Crowdfunding has been around long before the internet.  The definition of crowdfunding given by Crowdsourcing.org is financial contributions from online investors, sponsors or donors to fund for-profit or non-profit initiatives or enterprises. It is typically divided into 3 types of models:

(1) Donations, Philanthropy and Sponsorship where there is no expected financial return

(2) Lending

(3) Investment in exchange for equity, profit or revenue sharing.

A great historical example of a donation model is the Statue of Liberty, which raised $102,000 in 1885.  Around 80% of those donations were below $1, now that is a movement!  Joseph Pulitzer was responsible for making this push by printing the request in his newspaper the New York World.  No internet, no television commercials, no YouTube.  Just a piece of compelling copy.  He was appealing to the everyday American by saying, “Let us not wait for the millionaires to give us this money.”  Pulitzer also promised that if you donated, your name would be printed in the newspaper.  Who doesn’t want their name printed in the paper?  I know my mom still has my newspaper clippings from high school!  What is even crazier is that the French raised $250,000 from it’s citizens to build it in the first place.  French and American citizens were united by the idea of freedom and justice for all.

This is the spirit of crowdfunding.  It is a group of people getting behind an idea and supporting it with whatever they have to give.  We are currently in a place where we can generate ideas and share them at a much faster pace than in the 1880s.  However it is spreading the ideas between people that remains the most fundamental aspect of crowdfunding.  Even today when you look at the most successful crowdfunding campaigns they involve an element of a united front.  

What can we learn from this story?

A) It is important to hinge your crowdfunding campaign on an ideal.  

An ideal to which people will immediately connect.  Star Citizen, a game that raised $37 million through crowdfunding, claims that the PC game is still alive.  For the PC gamers this is something to get behind, especially in a time when new gaming consoles like XBox1 and PS4 are released.  The ideal can make a campaign a sensation when it resonates with the community or fizzle into the obscurity of the internet when it evokes a half hearted response.

B)  How you communicate this message is important.  

Pulitzer wrote a short and engaging piece for his newspaper.  He tugged at the heart strings of Americans at a time when they were just 20 years removed from the American Civil War.  He showed that people were already behind the idea and that you even as a small investor had a chance to be a part of history.  What better way to show your Patriotism than to invest in a monument that demonstrates American idealism?  For any crowdfunding effort you must communicate the message concisely and precisely.        

C) People need to understand what they are getting for their money.  

The people who gave their hard earned money knew a couple things would happen when they made their pledge.  First they were going to get their name printed in the paper.  People get excited to see their name!  Second people knew that if they raised enough money then this monument would be erected and stand forever.  They would have the opportunity to view the statue so they could enjoy it for years to come.  Short term and long term value is being offered in this instance.  It is important for people to see what they get now and what they will get later.  

We may never see another opportunity like this to create a monument for an entire country.  It is clear though that whatever the campaign it must make people feel that warm, tingly feeling you get when you hear, “life, liberty and the pursuit of happiness”.

Your Fundit,

Thomas S. Wilkins

Follw me on Twitter @tswenterprises

Add me on LinkedIn Thomas S. Wilkins

+Me on Google+ +Thomas Wilkins

P.S. If you are a nerd you can read more about the history below:

The French Connection http://www.nps.gov/stli/historyculture/the-french-connection.htm

Joseph Pulitzer http://www.nps.gov/stli/historyculture/joseph-pulitzer.htm

Statue of Liberty History http://statueofliberty.org/Statue_History.html

Trade Your Pundit for a Fundit: 3 Reasons Why Entrepreneurs Need aFundit

You know a pundit when you see one.  They are on every tv channel that has a desk for a set.  They talk about sports, politics, stocks and whatever else people want to hear about from a person who knows more than they do.  People enjoy hearing and seeing them.  A pundit is defined as an expert in a particular subject or field who is frequently called on to give opinions about it to the public.  Soooo then what is a Fundit?  It's an expert in finance who shares his or her findings about ways people can fund their small business.

My goal by the end of this (& who really knows when the end is coming) is to use all of this information I collect to fund my basketball business, Hoops Education.  Additionally I want to help others fund their businesses as well so I will share the information I have uncovered in a simple "how to" manner.  Everybody wins!

3 Reasons Why Entrepreneurs Need a Fundit!

1. Financial advisors and consultants are expensive!

How much money do most new business owners allocate towards a business consultant?  If you wanted a consultant VentureStreet.com guesses that you'll probably have to pay minimum $250 per hour or $1700 flat fee for a meeting.  Carl Dickson, founder of CapturePlanning.com, estimates that you could pay around $100 per hour for a consultant making a six figure salary.  You could see how this would add up quickly!  For most entrepreneurs just getting started this is just not an option because they do not have the cash flow yet.  A Fundit is a much cheaper alternative and probably more fun.

2. Not enough money is always on the list of reasons why small businesses fail!
Sure there are other factors hindering people from success in their small business pursuits.  Many businesses lack a written plan.  Many business owners are amazing at creating a product or delivering a service but are not good at the management side.  Even if an entrepreneur does get a little cash, money management tends to stunt and stifle growth.  Many potential owners simply cannot define all of the costs so they fail to create an accurate budget.  Lacking an accurate budget often leads to underestimating your operating costs.  Also it takes money to acquire certain types of funding like SBA loans or loans from banks.  At the end of the day if you do not have the capital to keep your head above water as an entrepreneur things get ugly!  You need a person who can help you plan out the details so you can focus on generating great products and services.  That is where a Fundit comes in to help.

3.  Entrepreneurs are already working the 25/8 schedule!
That is 25 hours per day 8 days per week.  You might not be working that much but it could feel that way.  The Princeton Review sites that the average number of working hours per week for a successful starting entrepreneur is 70.  That is nearly double the typical workweek of the average employee.  Chasing a dream is time consuming.  You are already overcommitted to the numerous "important" activities that must be completed.  How many different places would you have to go in order to find the right information?  How will you know what option is the best for you?  What is the opportunity cost of the time spent researching vs. the time you could have spent creating?  Super ugly!  Spend your time doing what you do and let your Fundit do what they do!   

I am excited to kickoff the Crowdfunding exploration in the month of February.  If you have any suggestions please send them my way!

Your Fundit,

Thomas S. Wilkins

Follw me on Twitter @tswenterprises

Add me on LinkedIn Thomas S. Wilkins

+Me on Google+ +Thomas Wilkins