Part 1: Why did PledgeBank fail when GroupOn and Kickstarter flew?

“I’ll do X but only if N other people will do Y”

I was abuzz.

A cafe in Holborn. 2003. A secret meeting. James Cronin and Tom Loosemore, who’d made the genius does-what-it-says-on-the-tin FaxYourMP, bought me coffee and changed my world.

Wow, there’s actually other people who think computers can revolutionise democracy!

And they’ve an amazing top secret, ludicrously ambitious project to repurpose the whole of Hansard to make Parliament easy for the masses.

A little later, Tom Steinberg launched mySociety with a brilliant call for proposals. You can still read the entries here. But despite my already high ambient level of excitement, the one that I loved the best was PledgeBank.

Go and read the original proposal now.

It now seems strange, but once we got the money and started building WriteToThem, all I wanted to do was get on and build PledgeBank.

Oh PledgeBank!

I’ve never been really left or right wing. And what is brilliant about PledgeBank (and indeed all mySociety sites) is that both people who love Government and people who love business, love it.

The reason I liked PledgeBank was, in economic terms, simple. Typically, we either act alone by voluntarily buying something selfish for ourselves, or we let Government use the threat of violence to take money from us and spend it for our collective benefit. The former lacks scale, the latter lacks an immediate link to needs.

But with PledgeBank, you agree to do something collective, but only if lots of other people will too! Best of both worlds. The thing you do is voluntary, and yet magically it also has the power of impact of masses of people doing it! Lovely.

I’m sure there were several .com bubble startups using collective action, but by 2003 none were very noticeable – there was nothing obvious on the Internet that used this amazing collective action idea.

It was obviously going to change the world.

And yet, it failed.

That might seem a bit harsh for something that created Britain’s preeminent digital rights NGO, that kicked off the first wave of invasion of New Hampshire by libertarians, and that even now has successful pledges every week, and is altering the relationship between city and citizen in Barnet.

But it isn’t worth $13 billion, like GroupOn, and it hasn’t had a million people backing projects, like Kickstarter.

At first it might seem like a bit too much chutzpah to even compare PledgeBank to GroupOn and Kickstarter.

It’s not though – long after PledgeBank launched, Andrew Mason (CEO of GroupOn) started out by making a very similar site called The Point. It tried to organise collective action consumer boycotts. The Point even tried to buy out (er., merge with) PledgeBank to kill the competition (we were too hippy to accept).

Eventually they tried GroupOn as a sub-experiment, and it flew. GroupOn is collective action – it started out basically as streamlined pledges of the form “I, a restaurant owner, will give a 50% discount but only if 20 people will come try out my restaurant”.

It’s also not like we tried nothing making PledgeBank. We iterated with unstoppable passion to try to get it to take off.

We had pledge signing by SMS, automatically generated PDF posters, translation into a dozen languages, pledges in dozens of countries, beautifully copy edited hassle emails, local geographic search alerts, cobranded sites for companies and charities, geocascading pledges, Facebook integration… All back in 2005-2007.

So, what do you think? What went wrong?

Why did GroupOn and Kickstarter succeed, when PledgeBank failed?

Your thoughts in the comments.

This is the first post in a two part series. Read why I think it failed in part 2.

10 thoughts on “Part 1: Why did PledgeBank fail when GroupOn and Kickstarter flew?

  1. Speaking purely from personal experience here (so this is wild speculation which you should take with a whole cellar of salt), Pledgebank is too diffuse. Kickstarter (I don’t know much about GroupOn) has, at least in my head, a very clearly defined thing-it’s-used-for: I want to do Project X, but it’ll cost me a thousand pounds and I don’t have a thousand pounds. So, put it in Kickstarter and see if there are a hundred people who think it’s as cool as I do and will therefore pay a tenner for the thing that I’ll create from it.

    Pledgebank, on the other hand, has no such clear goal. Sure, I can use it for getting a project funded. But I can also use it for gathering support for emailing my MP about a particular issue (if ten other people do the same), losing weight (if fifty other people agree to get on board), organising a group holiday, having a birthday party, and a zillion other things. Now, that’s a good thing in theory, but in practice because Pledgebank’s applicable to almost everything, I rarely think of it as applicable to anything.

    A second thought: Pledgebank’s primarily (again, in my mind) about building a group of people who will all do a thing. Kickstarter’s about me doing a thing and you all paying for it. So what you’re asking from a Kickstarter contributor is money, in exchange for which they get a thing: what you’re asking from a Pledgebank contributor is action, in exchange for which they get the satisfaction of having done the action (and *possibly* the action causes some sort of result). That’s a lot of what MySociety is about (and we love you for it), but you’re probably the best-positioned people in the world to speak authoritatively on how hard it is to rouse people to action. Especially when most of the actions have no necessary positive result.

    Imagine, say, a pledge of “I’ll mail my MP and request that marshmallows no longer attract VAT, as long as 1,000 other people do the same”. Signing up to that pledge doesn’t guarantee me that marshmallows will no longer attract VAT; it guarantees me that people will email their MP about it, and their MP might do nothing. By contrast, a Kickstarter thing which says “I’ll make this CD if 1,000 people pay a tenner for it” guarantees me *the CD* if the kickstarter succeeds, not just the satisfaction of having asked artist X to make it.

    (Rather rambly set of thoughts, apologies.)

  2. I don’t think Pledgebank failed, it was successful for several years and ran its course. Eventually people moved on, just like they do for nearly every single site on the web. There are still some major successful pledges, such as one to restore a 150 year old furniture shop which was damaged in the riots:

    Also, I don’t see GroupOn as a success. They had to come up with their own accounting method to make the figures look good, and a $13bn valuation is loony (it’s roughly the same as SSE plc, the second biggest electricity supplier in the UK which makes about £2bn in profit).

  3. Groupon are offering people something for nothing. People love discounts, they’re a big part of Steam’s success.

    Kickstarter provide a valuable service by handling money in escrow, and a variety of other value-add bits and bobs; there was a discussion of its merits on mefi:

    A key thing missing from PledgeBank is that it operates entirely on trust. It also asks people to do things, rather than just hand over money, which I think puts a lot of people off.

    (Usability of this comment form: the boxes for name and email aren’t labelled except with “mystery meat” icons!)

  4. Broadly speaking all three sites: PledgeBank; GroupOn; and Kickstarter attempt to create a one to many relationship, but they each offer different things…

    GroupOn on the One side allows a business owner providing mostly services to promote his business by offering discounts but only if a certain number of people sign up… This is especially great for services that effectively don’t have a ‘unit’ cost… Cinema Tickets and entry to soft-play places for kids are a great example (from personal experience).
    On the Many side, people are getting something they might want anyway (or might want to try) for less than it would cost them… People love discounts and they love to share them with friends too.

    Kickstarter, as mentioned above tries to match One who wants to produce something e.g. a Boardgame (lots of small publishers now use kickstarter and there has been a lot of discussion on with Many people who might want to buy that game… often offering different levels of contribution that will give you exclusive extras… here the Many get something unique that may otherwise never get published… which a lot of people, particularly geeks love.

    PledgeBank on the other hand is often matching One who has a passion for ‘doing something’, with Many others who may feel similar… In my experience people are very busy with jobs, families, children etc. that doing something is often not high on their agenda…Therefore the target audience of people who will get involved is a lot smaller.

    To summarize, it seems to me it’s about the size (and enthusiasm) of the target audience… I don’t think PledgeBank really failed, it just couldn’t reach as big a target audience as GroupOn or even kickstarter.

  5. PledgeBank hasn’t failed. Not being the biggest is not a failure.

    PledgeBank proved that a website could solve coordination problems by lowering transaction costs. Evidence of its success is that ORG got off the ground financially, unlike previous such groups.

    I think there should have been a strong warning stating that the use of PledgeBank for solving problems that were NOT coordination problems was banned. This would have alleviated the problems @Sil mentions above.

  6. Martin: I think that’s a great idea. If Pledgebank was clearly for doing coordination problems and nothing else, then questions like “why did Kickstarter take off and Pledgebank not?” wouldn’t make any sense (or, at least, they’d be like asking “why did Facebook take off and Pledgebank not”, i.e., comparing unlike things), and thus Pledgebank wouldn’t be “an unsuccessful Kickstarter”, it’d be “easily the most successful coordination-problem solver”. :)

  7. Thanks all for your ideas and comments. Will write a blog post with my views and summary as a part 2 probably next week…

    Pete – ah use the Simplr WordPress theme does have an unusable comment box!

    Have hacked it to make it better. Thanks!

  8. The other projects mentioned have gone through many different iterations — in GroupOn’s case it evolved, as you say, out of something much closer to PledgeBank, and Kickstarter raised $10MM to develop it further. PledgeBank, on the other hand, never really changed very much post-launch. If there had been people constantly driving it forward on a full-time basis, I suspect it would have evolved along some very interesting paths.

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