The entrance and exit of every player in an emerging market is significant to those that remain. Of course I am speaking about the recent decision by Contenture, after 7 months of operation, to shut down their site. They had a working product, some content sites and some paying users but found it hard to quickly grow adoption of their crowd-funding solution to meet their business targets. I am sure that they did not make this decision lightly and perhaps there is some lesson or insight we can learn for Kachingle.

It is often said in Silicon Valley that start-ups are like three-legged stools that will fail unless all legs are strong and balanced. The “legs” are Business Know-how, Product Design, and Marketing Effectiveness. Contenture was started by two successful Internet founders of GetClicky, a web analytics product. This experience served them well and there were no indication of operational or management problems.

Their product seemed to be a solid implementation of their intended features. It differed from Kachingle in several ways, most notability in lack of social community elements and weak content site connection (no active medallion widget). To their credit they successfully delivered their unique product vision. We feel this vision was flawed based on our core principles but only time will tell if we have got it right. So at this point we should just honestly look at the Contenture product as one more data point that has been tried with limited success.

Finally, their marketing efforts created awareness of Contenture initially but seemed to lack a sustained message with journalists and bloggers. In the end they were unable to capture any large media content site. Crowdfunding is a two-sided market where both interesting content sites and willing viewers need to be in the system for the business model to work. We feel that the lack of good content sites prevented Contenture from attracting sufficient users to reach the necessary critical mass to make the business viable. They chose to exit at this point rather than invest more time and money to fix this leg of the stool.

The lesson for Kachingle is that this is a challenging market to master and will require persistence in many areas. Fortunately we feel that we have strengths in all three “legs” and are optimistic that we can succeed given enough time and a little luck.

Product Differences between Kachingle and Contenture:

We believe the Contenture offering had some serious flaws compared to Kachingle.

The biggest problem was (in our opinion) the incompatibility with advertising (they promoted themselves as the “anti-ad network”).  We believe a viable crowdfunding tool must allow advertising to thrive alongside it.  Additionally we do not believe people will pay to remove advertising on the web since it is already to easy to remove or just ignore.  We do not believe users will pay for content either.  But we do believe that users will pay to build an online persona based on their online media and service consumption.

Specifics about the differences between Kachingle and Contenture are below

  • Kachingle enables users to select (and deselect) the sites they wish to contribute to.  Contenture did not allow the users to select sites…it automatically put every site onto their contribution list
  • Kachingle builds a community around Sites and Kachinglers.  Kachinglers are building a real-life online persona based on their support and we have plans to integrate with Twitter and Facebook.  Contenture did not have any social aspects.
  • Kachingle has fully transparent financial accounting such that a Kachingler can track where all of their money is going thus enabling crowd-auditing.  Contenture did not expose this information.
  • Kachingle is elegantly simple. Contenture had complexity without obvious value e.g.
    • Hybrid contributions scheme a) part page view shared, b) part fixed monthly amount to specified sites
    • API for paywalls tied to the payment level directed to particular content site
    • No Medallion (widget) on the Sites, just an optional logo to brand the Site (this allowed site to fully customize the contribution message but also resulted in “invisible” Sites that had the widget without logo).

Competitive chart on slideshare: Market Players in the Crowdfunding Space prepared by Kachingle:

Kachingle is carefully designed around our 5 Principles:

  • User-centric
  • No “mental transaction costs”
  • Tap into existing social networks
  • Financial transparency
  • Fun, entertaining, like a game

By having overarching principles, Kachingle presents a coherent compelling experience to Kachinglers and Site Owners alike.

By the way, Kachingle predates Contenture. Our founder envisioned Kachingle way back in 2004 but realized that the timing was too early, In October 2007 we filed a comprehensive patent application and then in late 2008 we started developing the product.