Live the Lie: how narrative is used in crowdfunding

The saturation of the internet with crowdfunding campaigns is forcing project creators to resort to narrative tricks to lure in potential backers – and we're falling for them. Oscar Schwartz scours the playbooks of digital marketing gurus to explain why some crowdfunding campaigns fare better than others.

This a story of two stories. The first is about Bianca. Bianca is homeless. She is nineteen, has three children with a man who is now in jail, and she is pregnant with her fourth. The second story is about Kurt, or Dave, or Zack – their stories are different, but only superficially so. Kurt wants to pay a skywriter to ‘spell out stupid jokes in the sky’, Dave wants to create an inflatable sculpture of Lionel Richie’s head, and Zack wants to make a potato salad.

Bianca needed $450 to pay for temporary accommodation for her children. Bianca made $0. Kurt made $6,820, Dave made £8,016, and Zack made $55,000.

How does this happen?

Like bees to honey

At a dinner a few weeks ago, eating vegan paella in a zero-waste share-house, a postgraduate law student asked if anyone had heard of Flow Hive, a new technology that lets you drain honey straight out of a beehive without disturbing the bees. No one sitting around the table was a bee expert, but everyone had heard of Flow Hive, and so the conversation moved to the plight of bees, the ecological impact of urban beekeeping, and the ethics of harvesting honey. 

New Invention - Flow: Honey on Tap Directly From your Beehive

Since launching in February this year, Flow Hive has raised over $12 million at Indiegogo, one of the many crowdfunding platforms that have risen to prominence in the last few years. Flow Hive is the second most successful Indiegogo campaign ever, and one of the highest-funded projects on any crowdfunding platform. What was it about a new style of beehive that has been able to generate such excitement? I didn’t know the first thing about harvesting honey. Nevertheless, as people around the table attempted, in turn, to describe how Flow Hive works, I found myself completely engaged in the story of this product. 

On  Flow Hive’s Indigogo page, their promotional video tells the story of a father and son team – Cedar and Stuart Anderson – who invented a high-tech beehive on their idyllic property in the hills outside Byron Bay. By donating to the Flow Hive campaign, it seemed as though backers weren’t just supporting the development of a new kind of beehive, but an entire aspirational way of life. The Andersons’ narrative is a rare combination of high-tech innovation, DIY food culture and environmentalism – and Flow Hive’s crowdfunding success is the perfect example of how an interesting product can be bolstered by an even better narrative.

Authentically narrativised... spam

The amount of money raised globally on crowdfunding platforms grew from US$7 billion (AUD) in 2013 to approximately $20 billion last year, and is projected to at least double again this year. Despite this impressive growth, there is still a limit as to how much people can afford to give to other people’s projects –and the saturation of the internet with crowdfunding campaigns now implies a new type of competition between them. The question that people who are embarking on a crowdfunding project are starting to ask themselves is no longer, ‘Is what I have to offer good enough?’, but, ‘How do I get people to care about me in a global network of people asking to be cared about?’

Vaynerchuk proclaims that he has figured out how to synthesise the addictive element of narrative, jab it unwittingly into potential customers, and make them so hopelessly addicted to his authenticity that they are essentially incapacitated.

According to internet marketing sage Seth Godin, the secret to getting people to care about a crowdfunding campaign is not the product, but whether the product can be authentically narrativised. Authenticity, in other words, is about commitment: commitment to an idea creates a narrative, and commitment to that narrative eventually makes it come true. There is an underlying philosophical worldview here: truth and value are constructed socially. In marketing-speak this translates as: ‘live the lie… until your lie comes true’. 

If Seth Godin’s understanding of how narrative works in marketing is philosophical, Gary Vaynerchuk – owner of VaynerMedia, a digital agency that focuses on social media marketing – has an approach that borders on pathological. In his most recent book, Jab, Jab, Jab, Right Hook, Vaynerchuk explains that ‘social media is like crack’, and that the single most addictive element is the authenticity of personal narrative. Vaynerchuk proclaims that he has figured out how to synthesise the addictive element of narrative, jab it unwittingly into potential customers (who he conceptualises as ‘opponents’ in a boxing ring) via social media, and make them so hopelessly addicted to his authenticity that they are essentially incapacitated. He then delivers a knockout Right Hook – the overdose – and collects his money. 

Vaynerchuk’s motto is that a good story is one that is shareable and warrants retelling. This seems like a fair metric by which to judge the success of a narrative. The issue is that for Vaynerchuk, the shareability of a narrative doesn’t serve the narrative itself, or its moral message, or its aesthetic value – it only serves financial gain. In this Vaynerchuk’s model, narrative is completely instrumentalised – the meaning of your story doesn’t matter, as long as it is leading to more sales. For Vaynerchuk, authentic narrative is the most sophisticated type of spam that has ever existed. 

Failed narratives, and narratives of failure

Crowdfunded projects rarely progress according to the compelling, precisely-structured narrative roadmap creators present to backers. After money has been collected, the real story – the tale of production issues, slipping timelines, and, sometimes, catastrophic failure – has often yet to actually begin. Campaigners are expected to provide updates until the moment that a product is in the backers’ hands – and because transforming narrative into a reality inevitably involves unforeseen obstacles, this process almost always compromises even the most tightly crafted stories. 

When sci-fi writer Neal Stephenson realised that he wouldn’t be able to deliver CLANG, a historical sword-fighting video game that reached its funding target of half a million dollars on Kickstarter, he wrote his backers a heartfelt explanation of what went wrong and why. He identified the key problem: the game was technically innovative but not entertaining. Stephenson took responsibility for this failure, explaining that he ‘focused too much on historical accuracy and not enough on making it sufficiently fun.’ Stephenson also explained that not only did he absorb significant financial losses as a result of CLANG’s failure, but also that he was so affected by it that in order to digest what went wrong he wrote a short book, which he would consider publishing.

The reactions to Stephenson’s final message were varied. Some backers were virulent, claiming that they had been lied to and defrauded. But many felt that Stephenson had tried and failed, which is precisely what Kickstarter is designed to allow innovators to do. As dgatos42, one of the project’s backers, wrote on CLANG’s crowdfunding page: ‘It was a cool idea that just didn't work out. I can't speak for others, but I'm on this site to support ideas that wouldn't get quote unquote mainstream funding … The best way you would be able to give me a refund is by coming up with a new idea and making something awesome. And if that one doesn't work, try yet another new idea. We need people like you guys in the game industry, people willing to try stuff that no one else has thought of.’ Another backer, Adrian, added, ‘Kickstarter is about pushing the boundaries of "new" and "interesting" in ways that wouldn't/couldn't happen elsewhere - occasionally even past the point of "possible". The boundary may have been breached here, but I knew that going into the project. I'm grateful for the ride, even if it didn't get to where we all hoped it would.’

Stephenson’s final message to the backers was consistent with the transparent communication style he had used during the rest of the campaign. He frequently posted in-depth accounts of how the project was progressing, as well as welcoming feedback and suggestions from anyone who was interested in the various technical problems the team encountered. Via this steady stream of communication, Stephenson was able to transform CLANG’s initial narrative into a narrative of process, a creative struggle in which backers felt like co-creators. Stephenson made his backers feel more like experimental patrons rather than eBay shoppers or hard-lined venture capitalists. 

This is precisely what Seth Quest, a product designer who started a Kickstarter for an iPad stand called Hanfree, failed to do. Quest launched his project in March 2011, and fortuitously received some press from WIRED and CNET. This prompted an influx of investment, and within three months Hanfree met its proposed target of $10,000, eventually receiving $35,000 from 440 backers. But Quest hadn’t organised a production strategy prior to the campaign. Quest claimed that when he went searching for a manufacturer, they already knew how much money he had for the project, and used this information against him. Eventually, Quest lost almost all the money he raised to production costs, and was left with neither product nor cash to refund his backers. 

Unlike Stephenson, Quest panicked under the duress of failure, and let his narrative devolve into a hyper-reactionary back and forth in the comment section of his campaign page. Even after the project was panned in November 2011, there was another year of incensed and defensive comments between backers and Quest. These comments escalated into a different type of narrative: a lawsuit, hyper-anxiety, bankruptcy, and eventually Quest leaving the US to live in Costa Rica. 

Interestingly, neither Stephenson nor Quest breach Kickstarter’s terms of service. Kickstarter states that ‘when a project is successfully funded, the creator must complete their project and fulfil each reward’ in order to satisfy their obligation to their backers. However, Kickstarter also explains that backers need to acknowledge that crowdfunding is not internet shopping – changes, delays and failures are part of the process – and that Kickstarter themselves cannot legally enforce the completion of any campaign. 

The relationship between campaigner and backer on this platform, then, is essentially one of good faith. Campaigners must try their hardest to deliver their projects and fulfil rewards. And if they don’t, campaigners must be able to communicate that at least they tried their hardest. Stephenson was able to make failure part of the narrative arc of his project: CLANG’s failure narrative was painful, definitive, transparent, introspective, and possibly part of larger narrative that would lead to a better product in the future. Quest’s failure narrative was confused, accusatory, reactionary, and horribly drawn out. Understandably, the people who backed Quest’s narrative resented being implicated in this disaster. 

Stories untold

In March 2014, Eden Alexander became sick after reacting badly to an anti-depressant she had been prescribed by a psychiatrist. First she started getting blisters, then her skin began to pill off like paint, and finally she started getting burning fevers. The doctor assumed that Eden was a meth addict, and dismissed her symptoms as withdrawal. Eden grew sicker, and eventually ended up in the ER with myxedema coma, a rare but life-threatening illness. 

During her recovery, Eden set up a campaign on GiveForward, a platform that raises funds for medical bills. Within the first week Eden received over $700 in donations. But then some of her friends started telling her that their payments were bouncing back. The next day, Eden received an email informing her that her campaign had been cancelled, and that $700 had been cleared from her account.

Eden is a sex-worker. Her campaign was removed because it apparently contravened GiveForward’s credit card processor’s (WePay) terms of use, which states that the service cannot be used in connection with pornographic items. Eden started tweeting and blogging about her campaign’s ban. Her tenacity meant that her cause gained publicity and internet outrage. She moved her campaign to Tilt, a different platform, and has since raised over $10,000. 

Despite this ‘happy ending’, Eden’s story highlights that there are certain boundaries around the types of narratives a crowdfunding platform is willing to share, boundaries that are so buried within the platform as to become invisible. GiveForward presents itself as a transparent platform that enables users to raise money for any medical expenses without judgment, but this platform actually has a set of hidden conditions. Some of these hidden conditions actually put a limit around the types of narratives that are allowed to be told, and by whom. When Eden received her letter of rejection, it was not only her campaign that was being rejected, but her life’s narrative.

Bent meta-narratives

The meta-narrative of crowdfunding celebrates both the audacity of the exceptional individual and the power of an engaged community. A success story like Flow Hive provokes the feeling that crowdfunding might be able to help us momentarily step outside the strictures and biases of the ‘system’, and make worthwhile things happen through direct and honest communication. 

However, this hopeful meta-narrative bends slightly when you examine those narratives that fail, and why they fail. Marketers like Vaynerchuk, who insist that authenticity and its simulation are identical, encourage a desire to delude that leads to embarrassing campaigns like Quest’s, whose failure is representative of what can happen when an idea is all narrative and no substance. Erin’s story, meanwhile, reveals that crowdfunding platforms still exist within the political, social and economic paradigms of contemporary internet culture, and are geared towards promoting the narratives the most skilfully leverage these paradigms. Narratives that do not conform are usually ignored, sometimes banned. By instrumentalising narrative as a way of generating popularity and capital growth, crowdfunding narratives will never challenge these paradigms – as the best novels, movies, plays, and poetry have done in the past – but will simply repeat and entrench them.

You can imagine Vaynerchuk coaching Bianca: ‘You have to jab them with your leading facts: three children, pregnant, homeless – and then Hook them with your right: I’m only 19.’

According to both Godin and Vaynerchuk, any narrative, regardless of content, can be geared to lure us in. This is perhaps most clearly illustrated by the fact that Zack’s potato salad raised $55,000, while Bianca’s privation raised $0. Godin and Vaynerchuk would contend that while Zack (and Kurt, and Dave) used humour and absurdity to make people want to become part of his narrative, Bianca failed to exploit the key point of her narrative – suffering – to leverage hers. 

You can imagine Vaynerchuk coaching Bianca: ‘You have to jab them with your leading facts: three children, pregnant, homeless – and then Hook them with your right: I’m only 19.’ But if the success of crowdfunding narrative lies in making people want to become part of your narrative – to see themselves in it – what chance does Bianca have? Her story is authentic, sure, but its authenticity is not appealing in the way Zack’s – or Flow Hive’s – is. How do you make deprivation alluring? How do you make it shareable? Who wants to be part of a narrative that we’re conditioned to see as a narrative of failure? It’s much easier to give a few bucks to some guy in America making potato salad. 

Portrait of Oscar Schwartz

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