Note: This was supposed to be an internal note to the Wefunder team. I accidentally emailed it to everyone who follows Wefunder on our profile. Sorry about that.
In April and May, we ran the Ideas experiment. Here are the results.
Highlights
- We've launched 7 idea-stage companies. All of them either didn't need financials, or had so little history the founder was able to put together GAAP themselves.
- Suz estimates a total of about 40 hours to support all of these 7 founders. This could have been 20 hours with better software/automation.
- 58% have hit their min target (likely 71% when it's done)
- They have raised over $320,000 collectively. Most have live campaigns, so this will increase, but the average raise per launch right now is $45,000.
- In total, we've earned about $28,000 in revenue. This means we made about $700 per hour expended. A typical account manager would be earning under $50 an hour. So that's 14X+ wage to revenue. That's a good sized lever.
- Two companies will likely fail at their campaigns. PopSchools used Venmo instead to collect money from their friends and family as a quasi-donation. SpotIdol was launched without first getting 10 commitments from friends and family.
The companies
- App App: $256k
- Stealth Machine: 25k
- Caresplit: $20k
- DowntoDash: $20k
- SpotIdol: $1.7k
- Popschools: $0. Used Venmo
- Clava: Not Started Yet
Conclusions
It's clearly worth our time to launch Idea-stage companies (with little or no financials) that can collect $10k+ in commitments from their friends and family.
However, in April and May, we did not identify a channel where hundreds of these founders would come to us and apply.
Based on that experience, it looks like Ideas can add incremental growth to Wefunder, but by itself isn't going to be a magic bullet that makes us grow 10x year over year.
Right now, the Ideas page is very silo'd off, and is likely getting no inbound traffic since May. In October, we'll spend a couple days fixing our raise funds page and inbound flow to better integrate it as an option to inbound founders (and our referrals partners), and perhaps we'll work on some SEO for friends and family rounds. Perhaps then Ideas could add $5M+ to our annual results next year at little ongoing cost.