Taiwan: Crowdfund Heaven

Taiwan: Crowdfund Heaven
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What you need to know

Crowdfunding is taking off in Taiwan, and the co-founder of the country’s biggest platform says that as long as it's not illegal, anything is 'worth a shot.'

Tim Cheng (鄭光廷) is the co-founder and chief executive of Taiwan crowdfunding platform flyingV. The Taipei-based company was established in early 2012 and has grown to be one of the largest platforms of its kind in Asia. In four years, a total of NT$340 million (US$10.4 million) has been raised through almost 1,700 campaigns.

Cheng says that a core value at flyingV is to have “no limitations."

“I can’t think of any industry or anything that isn’t suited, unless it is illegal,” he says. “Everything is worth a shot.”

Projects often are politically sensitive and generate controversy online – the case of a lesbian couple crowdfunding their wedding to promote LGBT rights in Taiwan is a recent example.

The platform has also become linked to the continued rise of social activism in Taiwan. Two project creators have gone on to win public office: heavy metal band CHTHONIC – whose lead singer is New Power Party co-founder Freddy Lim (林昶佐) – raised NT$4.9 million for a concert at Liberty Square in Taipei, while Taipei Mayor Ko Wen-je (柯文哲) raised NT$1.6 million for a project promoting health awareness.

Only in Taiwan?

FlyingV has about 270,000 registered users; most of them are aged between 24 and 38, and more women than men are backing projects. The average pledge is NT$1,700, though Cheng told The News Lens that film and documentary projects tend to draw an average of NT$2,400.

Cheng is doubtful that flyingV would have been as successful in other parts of Asia. While people in Hong Kong and Singapore have money to spend, both are dominated by the finance industry. Japan and South Korea meanwhile have large overbearing conglomerates. China is more complex; notwithstanding the massive number of entrepreneurs and a booming startup scene, there is also an underlying focus on cash. Taiwan, however, is better suited, what with its diverse society, a strong cultural scene and a tradition of small to medium-sized enterprises.

“I believe a crowdfunding platform requires demand and diversity in creativity,” he says.

Free product testing

FlyingV takes an 8% cut of the total funds raised, which includes banking fees. This compares to U.S. platform Kickstarter which takes 5%, excluding bank fees. So the cut works out about the same, Cheng says. If a project doesn’t reach its target, the company doesn’t charge fees.

Speaking at Computex in Taipei this morning, Cheng told the audience that he is often asked about which type of projects are likely to be successful. Each year, the campaign that attracts the most cash is “something really, really unexpected,” he says.

The best performing campaign in 2012 was a wristwatch – “not a smart watch, a regular watch.” In 2013, it was a fun-run, while the following year it was a social innovation campaign. Last year, the top project was traditional Chinese artwork, for which more than NT$20 million was raised.

“We don’t know what is going to be it this year,” says Cheng. “That is what is so fun about crowdfunding.”

While there is “no magic formula” for creating a successful campaign, many lessons have been learned over the past four years, and flyingV assigns a staff member to assist each project through the process. An effective video remains important – every campaign is required to make a 90-second clip. But Cheng notes that produced videos that are "too slick" may make some potential backers skeptical about whether the creators really need the money.

It is also important to build and leverage more traditional offline networks. Cheng says that despite campaigns being run online, crowdfunding can still be “pretty localized.” He encourages project creators to run their own events and demos. The company itself has renovated a hotel to host events in Taipei.

If a project fails to reach its target, Cheng says the process is still worthwhile to build the profile of an idea and obtain feedback and data analysis. He points out that while people always focus on the money raised, crowdfunding is really about raising a project's profile.

“It is pretty much a free market test. It doesn’t matter if you fail,” he says. “That is the whole point of the platform – to test.”