SA Crowdfunding Blog

Monday, 05 November 2012 00:00

Crowdfunding Success Series: Penny Arcade

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Penny Arcade is an Internet comic site that used crowdfunding to improve what it offers to its visitors. Like many other sites on the Internet, Penny Arcade had to convert to an advertiser funded model, which the creators were not quite happy with. Advertisements, though they can bring in good revenue, take away from what a site has to offer by cluttering the site up, distracting visitors and, in some cases, visitors actually end up resenting the advertisements. Further, when a site is funded by advertisements, it makes it difficult for the creators to allow people to create apps and other ways that people can interact with the site, as they may lose advertising revenue.

Penny Arcade wanted to change the way it works. To that end, they started a crowd funding project with a goal of $250,000 so that they could convert to an advertisement free site. In the end, they brought in $528,144 off the Kickstarter site.

The company set up funding goals that were somewhat like videogame goals in the way that they were arranged. At each assigned increment, a new feature was unlocked. For example, at the $900,000 funding level, the company released its work under the Creative Commons license. At the $999,999 level, Penny Arcade when online ad free. There are other goals that lie ahead, though they are tantalizingly listed with "???" on the project's page.

Why It Worked

Penny Arcade did some things right. For example, the company added some truly value increasing features at certain levels of funding. At the $750,000 mark, the company released a comic reader for mobile operating systems, for instance. Each time the company surpassed one of these goals, readers and funders got something back in return.

The company also offered something that people like right from the start. By pointing out that they wanted to offer the site for free with no advertiser support, they essentially set themselves up as exactly the type of Internet site that people tend to like. Even though many Internet sites rely upon them for revenue, hardly any Internet surfers are really that intrigued by or enamored of advertisements. In fact, the advertisements that pop up on the screen tend to cause outright rage in some surfers. Penny Arcade offered something in the form of an advertisement free site that a lot of people who read Internet comics will no doubt appreciate.

Take Away Lesson

If there's one thing to take away from Penny Arcade's success, it's that you shouldn't be afraid to be fun with the gifts you give when you reach certain dollar increments. You should also not be afraid to offer new products in exchange for the funding that you're receiving. This creates a situation where the people giving you funding are made very aware of the fact that you appreciate the money that you got and that giving just a little more may result in something truly enjoyable coming their way from the company. Of course, making a nuisance-free site has quite a bit of appeal, as well.

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