Crowdfunding is how indie bands and other under-the-radar creative types raise money to record their next album, produce their next short documentary or put up their newest art show. It’s hip, it’s democratic, it’s trendy, it’s part of the everyday vernacular of millennials.
It’s also finding favor within the corporate board rooms of giant, public companies.
Hasbro is one of them. The toy titan has more than 5,000 employees around the world and annual revenues north of $4 billion. Founded in 1923 and publicly traded since 1968, it’s the company behind Mr. Potato Head, My Little Pony and Transformers. Today, it’s turning to the 15 million monthly users on crowdfunding platform Indiegogo to help it find its next home-run game idea.
To be sure, crowdfunding is not about the money for Hasbro, which is a $9 billion company. “For us, it is building that relationship directly with the creators and makers,” says Brian Chapman, the company’s head of global design and development. Soliciting ideas from the public through crowdfunding is Hasbro “reading the pulse of the gamers,” getting a sense of the popular ideas and trends in the community, he says.
Hasbro and Indiegogo will be accepting applications to compete in the challenge through Sept. 30. The idea is to create a party game -- one that encourages face-to-face, real-life interaction -- not a game played on one’s phone.
A team of internal designers and game developers at Hasbro will pick their five favorite submissions. Those five game ideas will run crowdfunding campaigns on Indiegogo from Oct. 30 through Dec. 1 to raise money and generate user feedback. Hasbro will pick a winner, taking into consideration how many backers each contestant attracted with their campaign. The winner will get $10,000 on top of what they already raised and a trip to Hasbro headquarters in Pawtucket, R.I., for a chance to meet with all the game-making-pros and get advice on everything from manufacturing viability to marketing strategy.
For Indiegogo, working with a big company like Hasbro brings new eyeballs to the platform. The San Francisco-based platform has recently devoted more time and resources to what it calls the “Fortune 500 Projects,” including putting together a small, internal team devoted to these sorts of brand partnerships. Running brand partnerships presents a new revenue stream for Indiegogo, as the platform charges big companies a higher rate than the typical 5 percent commission on funds raised.
“Most brands are new to crowdfunding and they don’t fully understand the potential that crowdfunding has as a market research, market validation tool and we really want to support that use case,” says Christian Busch, Indiegogo’s senior vice president of marketing. “What it is in it for the brand is it is an amazing way for them to directly engage with consumers and to really find out what the audience cares about. It’s a way for them to uncover innovation.”
Hasbro isn’t the first big company to turn to crowdfunding in search of innovation and consumer engagement. The value of a crowdfunding campaign backer versus any other individual surveyed in expensive market research is that a crowdfunding campaign backer has skin in the game.
“Product developers understand all too well that there is only one way to know if a product will sell. You have to convince people to pay for the product you believe in,” Taylor Dawson, product evangelist at FirstBuild, General Electric’s incubator for the next generation of home appliances, wrote in a recent blog post about his experience in running a campaign on Indiegogo.Related: What's to Prevent Someone From Ripping Off Your Crowdfunding Campaign? Not Much.