ThinkExpat’s interview with Joe Wakeford and Conrad Watts, founders of the Czech Republic’s First Crowdfunding Site…
Crowdfunding – a simple yet innovative way of using the power of online social networks in order to raise extraordinary amounts of money – is already a spectacular success the world over. This platform is currently being used by the President of the United States, Barack Obama to launch a new age of entrepreneurialism in the United States as one answer to the worldwide economic crisis.
Fondomat offers a revolutionary way for charities and individuals to reach donors and manage projects at a fraction of the cost incurred through traditional fundraising methods.
Childhood friends Joe Wakeford and Conrad Watts, two Prague-based entrepreneurs who have known each other since they were 12, built Fondomat in order to give all people living in the Czech Republic the opportunity to raise money using a specialist platform operating in Czech currency. As they both work in the creative fields – Joe a music producer and Conrad a writer – the inspiration for Fondomat came from a personal desire to make it easier for people with creative ideas to make them a reality.
To begin, what’s the significance of the name ‘Fondomat’?
It’s a simple portmanteau that is intended to inspire connotation rather than have any direct meaning. It can be unofficially translated as ‘Fund Machine’, if you like.
Although we made it up, it comes from the Czech word fond meaning ‘fund’ and with the addition of the ‘omat’ bit, it works on a kind of internationally recognisable level as something akin to a laundromat, or an automat, in that it works on a self service basis. It also suggests something simple and mechanical, a useful tool designed specifically to help us humans in the pursuit of happiness and success.
A couple of other nice things about it are the fact that it’s really simple to say – whatever language you speak – and it has that intriguing quality of inspiring curiosity.
We are of course hoping that it will soon be promoted from a proper noun to a fully fledged transitive verb, so that you’ll forever overhear people saying, ‘I’ve got this big idea, I think I’m gonna Fondomat it!’
How does Fondomat fulfill a unique position in the crowdfunding space?
The most obvious reason is that Fondomat is the only real crowdfunding site in the Czech Republic, but our unique position goes much further than that.
We came into the market at a really exciting time, the extraordinary success of major crowdfunding sites had proven the concept worked and the with the world reeling from relentless catastrophic economic events, people, especially creative types (who always seem to find it harder than anyone else to get funded) were beginning to look at new ways to raise the money they needed to see their projects through to completion.
Whilst building Fondomat, we took the opportunity to observe what the best of the competition were doing and create a website which we believed ironed out some of the shortcomings we saw in them. One of those shortcomings was the cost of similar services; Fondomat is currently the cheapest crowdfunding website to use for both creative projects and charity-based fundraising in the world. It’s also almost unrestricted in terms of its scope for users. With a less exclusive platform than many others, Fondomat is open to those wishing to fund creative endeavours, new businesses or raise cash for charities, it’s pretty much limitless. We wanted Fondomat to be a one stop shop for all fundraising activities.
What are some of the difficulties associated with starting a new crowdfunding venture, and how did you overcome (or plan to overcome) them?
Crowdfunding was pretty much an alien concept in the Czech Republic when we started Fondomat. The huge international success of the idea had not yet penetrated the consciousness of many Czechs. Because of that, the initial marketing was difficult. We did however, receive a very pleasing amount of press attention from around the world, which helped to give credence to what we were doing.
By far the biggest challenge of starting Fondomat was trying to clearly get the concept across to our audience. We discovered early on that there were a great many people out there who believed that all you had to do was post a few lines of description, a random photo and simply sit back and wait for the cash to come rolling in. That was a lesson in the fact that it doesn’t matter how plainly you illuminate the road to success, some people don’t bother to read the signs. We quickly built quality control measures into the system to deal with that issue and, from the beginning, gave all our users ample advice and support in order to give their projects maximum potential from inception to their chosen deadline.
Having the site mirrored perfectly in English and Czech also put a few wrinkles in the endeavour at the beginning. The two languages are very different and require the use of formality and informality in quite divergent ways. Trying to maintain a harmony with the linguistic expression from one to the other caused a few headaches, but our translation professionals are first class and in the end these things come down to having confidence in your people to do their job well.
All the challenges of starting Fondomat have been extremely interesting and educational for us. Overcoming each and every problem helps us hone the site and improve it’s performance and intuitiveness, for that reason we welcome them (within reason!). As a process this continues, we will always be looking for ways to make Fondomat even better, but that doesn’t mean endlessly adding features, sometimes the maintenance of simplicity is far more valuable.
Why did you choose PayPal as the funding method for Fondomat? What are the benefits and drawbacks of working with PayPal?
Raising money isn’t easy, but we believe that processing donations should be. Our users need to be able to receive money safely and instantly. In order to reach their target amount, they also need to contact as many people as they possibly can, which often means getting in touch with contacts abroad. PayPal makes processing international payments easy and extremely secure. Fondomat projects can be donated to in any currency from anywhere on earth, all the donor needs is a credit card. We wanted a pay partner with an outstanding worldwide reputation and an instantly recognisable and trusted online brand. Both donors and Fondomat users needed to feel comfortable with the donation method for it to work well.
The other reason is that there really is no such thing as free banking in the Czech Republic and many types of international transactions carry their own rather heavy fees, we wanted to avoid that for our users. The only downside is that PayPal is still a rather novel way of processing money in the Czech Republic, but it’s popularity is growing. Overall, considering what we want our users to be able to do and to provide the levels of security we considered imperative, PayPal was the only logical choice.
Why did you opt to forgo the ‘investment’ route for project donations? Is there any way to reward project contributors, as seen on Kickstarter, IndieGoGo and other popular crowdfunding platforms?
All of our projects offer rewards, it’s impossible to post one without doing so. The reason for that is to avoid becoming entangled in complicated tax laws which differ from country to country. Because our users offer rewards, every single donation transaction is essentially a clean, tax-free, legal exchange. If we didn’t insist on the rewards we’d be exposing our users to a labyrinth of complexity which in some cases could get them into trouble with their municipal tax authorities.
Fondomat is not an investment vehicle, a broker or a business networking institute. Our purpose is simple – we want to help people do extraordinary things by giving them the tools to raise money in the best way we know how. Joe and I are both from creative backgrounds so the financial investment route never interested us. It’s the projects themselves that excite us more than anything else.
Further to that, it’s really interesting to see what people come up with as rewards and how they connect to their donors through a much more human and organic channel by offering them in the first place. We’d rather Fondomat users were having fun working out what to reward donors with than listening to hold music on the phone to their local tax office.
How do you intend to get the word out about the site to draw more projects and project contributors?
Apart from having our logo tattooed on our foreheads? Well, persistence will be a big part of it. We spend a great deal of time talking with all kinds of organisations within the creative and media sectors, with charities, educational institutions and even religious groups.
We’ve done an awful lot of legwork in order to raise the profile of Fondomat and attract new users over the last few months, but, of course, press coverage is really important. There has been a good deal of completely unexpected, but extremely helpful journalism, which has been great, but it can’t be relied upon as a singular source of PR. Word of mouth is absolutely key also and I’m always delighted with how interested people are whenever I tell them about Fondomat. But the best way for us to get the word out, is by targeting the right people to approach. We are constantly researching and building contacts in the right places and we will continue to do so.
Where do you see the site a year from now? Several years down the road?
Within a year, it’s our hope that the site begins to be recognised as the best way to raise money for Charity in the Czech Republic and surrounding countries (research has shown that the effectiveness of online crowdfunding trumps traditional methods of fundraising to a remarkable degree). Several years down the line? Well, with any luck, the site will be mirrored in most European languages and stand out as the leading crowdfunding platform in Eastern Europe.