About Me 0084: Ways of Making Money

Call it a pipe dream, but some day the crystal football will be awarded without controversy

Kevork Djansezian/Getty Images

It seems like everybody agrees that the BCS is no longer a legitimate system for college football. The obvious solution would be to create some kind of a playoff system, but doing that will take time and money. Here are a few fixes to the BCS that will make it slightly more tolerable.

Do Away With Automatic Qualifiers

I don't care what conference a team plays in. If they finish the season ranked in the top eight of the BCS, they should go to a BCS bowl game. If they don't, the Insert-Corporation-Here Bowl is always an option. The problem with the automatic-qualifier system is that teams like Connecticut get a BCS bid despite not being in the Top 10. Or the Top 15. Or even ranked. Little known fact: The "C" in BCS stands for "championship," and a team that didn't even finish the year in the Top 25 has no business competing in a "championship series."

Instead of saying Conference A plays Conference B in a particular bowl game, the BCS can create a lottery system. Obviously, the teams ranked first and second play in the national title game. Beyond that, though, the bowls "draft" the team that they want to see play (with the draft order changing every year, similarly to the way we move the national championship site every year).

The other option is to go with a straightforward format, No. 1 versus No. 2, No. 3 versus No. 4, No. 5 versus No. 6, and so on. Each game would be tightly contested, and the bowls could advertise to/exploit a completely different set of fans every year. Is it perfect? Hell no—it is still the BCS, after all, but it takes away the elitist nature of the system and gives teams like Boise State a chance to have their trial by fire.

What made this project so successful? After all, there are other iPod Nano projects. And it's a wristwatch, which even with the addition of a Nano, might not be the coolest or most necessary of accessories.

Bryce Roberts, the Managing Director of O'Reilly AlphaTech Ventures, points to some reasons he's identified that contributed to the success of the Lunatik/TikTok fundraising endeavor. These lessons that can be seen in other successful Kickstarter projects (such as Diaspora), but they're also applicable in many ways to more "traditional" funding efforts.

Tell a personal story

The Lunatik/TikTok "pitch" wasn't a bulleted list of qualifications or clients. Rather, the members of the team "told personal stories that created a connection to the project that had nothing to do with their professional pedigree." While this sort of storytelling doesn't boost their professional credentials, Roberts argues, it does give the entrepreneurs a certain personal authority and helps to connect them to funders and potential funders in a different way.

Roberts argues that the best fundraising pitches always emphasize this personal aspect. "It's a given," he writes, "that if I chose to invest in you I believe I can make money, but there are the intangibles around personality, perspectives, and life experiences that will make a potential funder more likely to want to believe you."

Tell the product's story

If you watch the TikTok video (below), you'll see the product is featured throughout. This demonstrates what the product can do - and that it can do what the startup promises. The video also demonstrates the larger potential of the product. These might be "small, nice little features" that some investors would dismiss. But with the crowdfunding model, the right storytelling around this seems crucial. "The difference between a nano strapped to a wristband and a premium quality, highly designed, customizable piece of wearable technology is simply a matter of how you tell the story."

But even when you aren't using a site like Kickstarter to raise money, it's crucial that your product be front-and-center in your presentations.

Give rewards and issue progress reports

Investors, by definition, invest in order to make a financial return. Nonetheless, argues Roberts, you should offer more than simply the promise of "making money." These sorts of non-financial rewards can be personal and personalized. By design, Kickstarter tells its users, "the best way to inspire support is to offer people great rewards. Everyone loves limited editions, one-of-a-kinds, and fun experiences (parties, screenings, balloon rides!). Spend some time brainstorming your rewards and people will respond. No one needs another coffee mug."

And as your project and your company are constantly evolving, it's good to keep investors and potential investors up-to-date on your progress. In the case of TikTok, the creators even filmed themselves in China when they traveled to the factory where the watch kits were being made. But the same could be said for all funding relationships; keep your investors apprised of "how you're making progress and how your story is continuing to unfold in a big and important way."

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Monday, January 10, 2011

Ways of Making Money

Tell a personal story

Tell the product's story

Give rewards and issue progress reports

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