Tuesday May 24, 2011 by Nathan Burke - Director of Marketing, CloudLock
Journalists love hooks. An interesting angle turns yet another story about a new startup into something palatable in a sea of press release style announcements that start with “Today, X Inc., the leading provider of y introduces z.”
And the story of the founding of fundraise.com has enough hooks to make a journalist salivate. A 19 year old CEO and founder who seems to have entrepreneurship in his blood? Check. A company chasing after a huge market opportunity? Check.
But I’m not a journalist. So instead of turning the story of fundraise.com into a Horatio Alger story for the digital age, I took the easy route. I talked with Nate Drouin to find out where the idea for fundraise.com came from, where the company is headed, and what’s the end-game for the online giving startup.
First Look: Give me a little background about yourself first.
Nate: Well, I'm 19 years old. I graduated from Brewster Academy, a private school in Wolfeboro, NH. I knew what I wanted to do with Fundraise.com and I knew college wasn't the right path for me at this point. So when I was offered a job at a graduation party to work for a tech company in Woburn, MA, I took it. I worked there and built out Salesforce.com implementations for Fortune 500 companies from June to December while simultaneously securing funding for Fundraise.com at the end of November from a private investor.
First Look: So what gave you the idea for Fundraise.com?
Nate: I've had the idea for Fundraise.com for about three years, and I tried to build it a couple of times before I attached the name to it. I was kind of a PHP guy and didn't know enough to actually build something that is as robust as Fundraise.com. After securing funding I brought on a development team that built the web site using Ruby on Rails.
First Look: As far as the development team goes, is it all in house, or is it outsourced?
Nate: We have a pretty amazing partnership relationship with a small, Boston-based company that works as our development team. They're exactly like an in-house team - all of our designers are there, our iPhone apps are built in the same place, and the website is built from them as well - the only difference is that on paper they're subcontractors.
First Look: All the articles I've read compare you to competitors like First Giving, and compare you by looking at the cost structure, with the difference being the fact that you don't charge a setup cost. Aside from pricing, what makes Fundraise.com different?
Nate: The single biggest difference is that we are open to absolutely everybody, not just 501c3 nonprofits. Fundraise.com is designed to help people fundraise for just about anything. A coach can go on Fundraise.com to raise funds for a baseball team to get new jerseys for the season. If a house burns down in a community, the town could create a fundraiser to help raise money for that family. You can't necessarily do that with FirstGiving or Network for Good. We're open to non-profits and we give a tax deduction to donors that donate to non-profits on our site, but we're also open to anybody else, and that's the difference. If you go to the other sites, you'll see that they're not open to everybody.
We're the first fundraising site open to everyone, including politicians, schools, nonprofits, for profits, churches, individuals and everything else. As far as the cost goes, we take a 7.5% fee for each donation, but unlike our competitors we do not charge for setup costs or monthly fees.
First Look: Looking at those that have been using Fundraise.com, how do you see the current breakdown between nonprofits, for profits, etc.?
Nate: A good amount of schools have signed up, 15 non-profits, a few political campaigns, and we're also very close to getting some serious fundraisers on the site. Our biggest is probably Haymakers for Hope, which has about 40 pages and is a Dana-Farber Jimmy Fund event. It allows individual fighters who are fighting in the event to sell tickets and collect donations from their friends and family. They've been extremely successful.
First Look: I'd imagine that one of your biggest challenges is making sure that people find Fundraise.com. How are you getting the word out to solve the user awareness and adoption problem?
Nate: Every piece of press counts, and we see a decent number of signups each time a new story comes out. Twitter has been huge for customer acquisition, surprisingly, and word of mouth has really helped. When someone signs up, they'll post directly to Facebook and Twitter to share with their networks, and we let them invite their friends via email. We've seen a lot of people that have been asked to donate come back and set up their own account to raise money for something.
First Look: In every article I've seen about Fundraise.com, the first thing mentioned is the fact that you're 19 years old. Obviously that can be a good thing when starting out, as it gives Fundraise.com a news hook. But at the same time, that can easily become a distraction or a negative thing. How do you see it?
Nate: To me, I think that we're starting to move away from that, which is good. I feel our product is strong enough that we don't need to rely on the hook of my age. We just got some good coverage after raising $50,000 for Haymakers for Hope in 44 days. I'm almost indifferent to the fact that I'm 19; it doesn't necessarily define me, or the company, but some media outlets took an early interest to that aspect of Fundraise.com. If the product wasn't good enough, people would continue to focus on my age, but we've been live since March 15th, and we're growing at such a rapid rate, and already generating revenue that there’s now much more to talk about.
First Look: Looking at the site right now, I can see that you're mainly focused on getting people to sign up for Fundraise.com accounts. I was wondering if you're planning on also promoting those that are using your site to fundraise by showing interesting activities currently raising money via your site.
Nate: Yes, absolutely. We're also planning on putting in a live stream as well.
First Look: What else is coming soon?
Nate: We have an android app that is very close to being released. It's all built, but it has to be tested a little more. That's probably the biggest upcoming feature. We do 3 updates a week, so the product continues to evolve.
First Look: What's your funding situation?
Nate: We're funded by an angel (who wants to remain quiet). We're not really looking for funding, and we're in a pretty good spot right now.
First Look: So what's the end-game for Fundraise.com?
Nate: The end goal is to be the leader in online fundraising. Online fundraising is growing at an enormous rate, and we haven't scratched the surface with online giving. If we're the leader in online giving in 2 years, that would be the end-goal. We just want to provide the best service to organizations and to our donors.
Fundraising is a $320 billion per year market, and online giving in 2010 represented 7.6% of that and continues to grow at a rate of 35% year over year. When fundraising really goes viral online, there's going to be a huge surge.
Nathan Burke is the Director of Marketing at Waltham, MA startup CloudLock. He is an infrequent writer at MarketingStartups.com and is uncomfortable describing himself in the third person in italics at the end of an article. You can find him on twitter at @nathanwburke.