Interview with Daryl Hatton, Founder of Connection Point/Fundrazr
Recently we got a chance to sit down with Daryl Hatton, Founder and CEO of one of our customers, FundRazr, a leading and innovative crowdfunding platform.
Can you tell us about FundRazr and who its users are, what it does, and what makes it special?
FundRazr is a general purpose crowdfunding site that, since 2009, has helped our users raise money for personal causes, nonprofits, sports teams, school groups and entrepreneurial projects. We redesigned and relaunched it in 2010 and since then it has grown into the system we have today with over 125,000 campaigns raising over $100 million in 25 countries. We specialize in enhanced storytelling and social media marketing techniques that help our customers deliver their message to a broader audience.
What metrics do you pay attention to for business success?
It’s still an ongoing debate within the team as to what is the most important metric. There are hundreds of them. One of the key things that we look at is conversion rate starting from when we’ve attracted someone to the campaign page, inspired them to take action and then moved them through the contribution cycle. We also measure the size of the average contribution. We are optimizing for inspiring larger and larger donations and helping people be more impactful when it comes to their donations. We are also looking at their safety and security when making the payment so they are willing to risk making larger dollar contributions.
Can you tell us something unusual about you and your work?
We have an office in Gastown, the tourist area of Vancouver. It’s a lovely office with old brick walls, old wood beams and modern glass and a great atmosphere. It is kind of strange but because I’m an entrepreneur, my most effective work habits keep me slugging away in coffee shops, bars and restaurants. I will leave this great office and go down the street and have coffee and work for a while just a few hundred steps away from my team because it’s the environment I’m most productive in.
Can you tell us about your journey into offering payments – what led you to explore payments, how was the process, what did you learn along the way?
When we started out with the original FundRazr model of collecting money to support personal causes, payment technology was unsophisticated. We were an early adopter of some of the new features PayPal introduced at the time for supporting crowdfunding transactions and those certainly enabled third-party payments but we still had a real challenge with onboarding users. Many of our users are facing emergency situations where they can’t easily get hold of all the information needed for meeting the legally mandated Know Your Customer (KYC) requirements. If they’ve just lost their house to fire or had to travel across the country for emergency healthcare treatment they often cannot quickly gather all the information needed. We wanted to help them begin accepting money during the often critical first 24 hours after an emergency when the need and the desire of their friends to help is strongest.
So any delay in getting them started on their campaigns is very troublesome. The benefit that we have with WePay is that we can get them started up with their campaign and begin accepting money immediately. They can then go through the KYC process at a later date when it’s more convenient. This lets them receive money into their campaign right away and still adhere to the rules. As a result they can catch the initial burst of energy at the beginning of the campaign and get closer to raising the money they need to meet their target and only clean up the paperwork as they go.
What prompted you to want to integrate the payments experience?
For us, payments are crucial to the customer experience, so counterintuitively, the more invisible we can make them, the better the contributor’s experience. One of the things we appreciate about WePay’s interface is that we weren’t having to do clumsy redirections and yet could still maintain the security of the system. It helped us design the best experience for our users. Removing the friction that happens in a donation process or an e-commerce transaction (and we do both), i.e. the more we can simplify and smooth the flow, the better. And we can maintain our branding at the same time as we give the customer a more seamless experience.
What impact has adding payments had on the end-to-end user experience?
One of the big impacts is to reduce the number of steps in the donor payment process. We not only have to collect the information we need to process a payment but also the information we need to provide a tax receipt. The ability for us to collect the payment card information and then default it into the tax receipting process can really cut down on a whole bunch of extra clicks. As a donor you still see the fields you need to fill in and have the choice of changing the things you want to change but if it’s a standard scenario and you accept all the defaults it cuts way down on the number of clicks that you have to do to move forward.
I think as we move forward into mobile and Apple Pay support and some of the innovative things were are doing around donor data collection we can cut many, many more steps out of the process, especially when you are on a mobile device. And that is a key thing for the Millennial population now who are really wanting to get the job done and move on. They may not want to handle everything on their phone at the time they are making the donation, so things like collecting the payment information from the device and letting them know they can fill in all the rest of their data later for things like getting a newsletter or getting their tax receipts, all the things they might be prompted for they can do at their convenience as opposed to having to do it right during the transaction. That kind of flexibility makes it a much better experience for donors which is really important in our industry right now.
What do you think is important for people to know about FundRazr and what you are doing?
We are seeing a little bit of donor fatigue creeping into the industry. There are so many places where people are asking for funds and so many places to donate that the donors are having a difficult time knowing what to contribute to and how much they want to contribute. One of our key research areas is how do we bring causes, corporations and consumers together in a cycle that helps them increase the funding for projects they care about and that also delivers a “win” for each one of those participants. We’ve been doing work on how to add sponsorships into crowdfunding campaigns so that the donor can also receive something back for their contributions. For example, if a cause is sponsored by a retailer you might get a discount card for shopping with the retailer for supporting the cause. The cause gets more marketing and support for the cause from the retailer. The retailer gets community awareness for their support for the cause. This helps build their corporate social responsibility brand story with the customers. The donors learn that by supporting their favorite cause they get the ability to have a more cost effective transaction with the retailer. Everyone wins!
Can you give us an example of a customer or two who show more precisely what is different about FundRazr that makes it successful?
We have a very wide variety of stories. I could tell you about users who are raising money for treatment for health issues or who are doing crazy things to support a non-profit. But what might be more interesting is one of our users who is running the largest ever crowdfunded science project, The American Gut Project. It operates out of the University of California, San Diego (UCSD). The project looks at the human microbiome, the internal and external community of living organisms and bacteria that are part of the human body and which may be more important to us in terms of our lives and our health than our genetics.
The project was founded by Rob Knight, a brilliant researcher. He set it up so that people who wanted to find out about their biome could pay to be part of the study. The perks for the campaign allowed you to get information about your biome and how it compares to others when you contribute to the project. It succeeds through participation from people around the world and through their social sharing helping find other interested candidates. The community of users has raised almost $2 million. By using rewards and incentives they have also been able to tell and spread their story more effectively and keep the project running for over 3 years.
One thing that has happened in general is that there is confusion in the market between peer-to-peer fundraising and crowdfunding and how they differ. We’ve been able to make them work together. A great example is the fantastic Aprons for Gloves project that raises $200,000 every year for at-risk groups through an all-volunteer organization that operates a boxing tournament for people in the food service industry in Vancouver. They use FundRazr for both crowdfunding and peer-to-peer fundraising to simultaneously let participants raise money to pay for their training and also raise money for the non-profit.