New Business Models Lead to New Business



When Amanda Palmer (or Amanda F Palmer as she refers to herself) emailed me I got half interested.  She is rock musician in a couple of cultish new wavish bands and is based in New York.

She told a little story. After her first album made no money at all for her, she quit her label and decided to do it on her own.  She recorded her second album but didn’t have enough cash to engineering, market or produce it so she turned to a website called kickstarter.com.  It acts as a facilitator to help artists gather funds for projects by pre-selling what they have to offer.  The great challenge that Kickstarter gives its clients is that if you ask for a specific sum, and fail to raise at least that sum by the deadline you set, no one gets charged a cent. So getting the proposition right is critical. Individuals make pledges and only when the target is reached, and the project goes ahead, is the cheque cashed so to speak.

Amanda asked for $200,000 US -not an insignificant sum!  You could pledge any amount from as little as $1US for a digital down load of the album when it was finished, $25  for the CD with  artwork and book right up to $10,000. If you pledged the top amounts you got to have the whole band to dinner, or she would play at a private party for you and your friends.  There were loads and loads of giveaways, some ingenious, some brilliant and some just plain daft, to encourage people to pledge money. I really pushed the boat out and pledged a whole $25 mainly to see what would happen and get on the mailing list.

What happened was amazing.  Thousands came forward. Then tens of thousands and the more she ranted and emailed pictures and wrote notes on her arm and chest, the more people pledged. She was clearly amazed by what she had started but never stopped saying thank you. So the buzz grew and grew.  She sent new artwork out to her supporters.  She released one track from the album.  We were all in it together with her.  The question is then, did she raise her $200,000?  Well when the shutters came down, 24,874 people had made pledges and  she actually raised  a staggering $1,040,000. She celebrated by throwing a supporters party in New York which she attended in a balloon dress, and posting a video of herself going mental in a Boston park. A lot more than 24,000 people now know about Amanda and her album as she has been interviewed constantly about the project since.

She has launch parties for the album planned all over the world and the art work is progressing at a pace.  She has made it!  Everyone is talking about this and she is now almost mainstream. She has done a way better job of self-promotion than her first record company ever did.  Plus Kickstarter had kickstarted itself in a very big way.

The project page is here. Check it out.

What is this telling us:

1. Risk taking can turn failure into success

2. Old business models are collapsing.

3, Music seems to be leading the way but others will follow.

4. Pre-selling a brilliant idea (as long as there are some controls) is a great way of testing the market and stretching your creativity.

5. The wisdom of crowds works.

6. Social networking offers powerful, new ways of marketing.

7. Building a community is a strong way of establishing your brand.

8. Saying thank you in a zillion different ways is also appreciated and another way of making even greater impact.

9. Get your great idea out there. No one can support something they have never heard of.

10.  More people than most realise, are prepared to take a punt and back something they like the look of even if it is a stab in the dark.

$25 well invested by me!  An album to look forward to and a sense of being a small part of something huge.  And if you are wondering what the ‘F’ stands for in Amanda F Palmer it is Amanda ‘Fucking’ Palmer.  I think that she has earned her soubriquet. Don’t you?


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3 Responses to “New Business Models Lead to New Business” - Leave a Comment

  1. Nigel – Love the Amanda story. I have so often spotted people who are interesting and wished I could help them get started. The ten points you made are absolutely true and certainly show how the internet makes it possible to source both interest and finance rapidly and internationally. I would add a point eleven…. there is no formula for success. If 20 Amanda’s tried this same trick tomorrow they would fail. Attention to detail, creativity and above all authenticity are what count in the age of internet business.

  2. Very neat post. It’s rather subtle, but we tend to oversee that the folks who should pilot an innovative solution are indeed the first adopters of your solution. The best part, they are not really looking for a return on investment, but instead some form of return on “first wave of inclusion and participation”.

    #7 in your list, particularly, is resonating for creative products – where tastes of the consumer can get in the way, and invitational inclusion is really a way to onboard them to a brand and methodology.

    Thanks Nigel.

    • Thanks very much for the comment Niraj. Can’t argue with any of your points.

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