ConnectionPoint with Daryl Hatton (CEO) | E108
Enabling crowd funding.
Summary:
In this 108th episode of Fintech Impact, Jason Pereira, award-winning financial planner, university lecturer, writer, and host welcomes Daryl Hatton, Founder and CEO of Connection Point, to talk about Connection Point’s crowdfunding model, some major successes challenges the platform has faced, the psychology behind philanthropy, and more.
Episode Highlights:
● 00:35: – Connection Point is a social commerce company that helps people crowdfund money for personal and professional/non-profit organizations.
● 02:50: – Connection Point began as a fundraising site for unregistered and non-charitable non-profits like children’s sports teams.
● 05:25: – They were one of the 30 companies included in Facebook’s beta for the Timeline feature to know how it worked ahead of time.
● 06:20: – The site allows companies and groups to use their own branding on their funding campaigns.
● 07:10: – The site includes technology called Coco Pay to allow companies to help potential customers crowd fund to purchase their product. For example, individuals with mobility issues crowd-funding to purchase a bike.
● 13:10: – The platform has now had to prevent defendants in violent crimes from fundraising for their legal defense due to the negative pushback from the community.
● 14:45: – The platform can be used to collect subscription or membership payments from supporters.
● 17:52: – It is free to begin using Connection Point and even to fundraise (less transaction fees, which no one can avoid) and optional to add a “tip” to each transaction for the platform.
● 20:53: – University of California used the platform to raise over $3 million to fund a study into the human microbiome.
● 22:50: – Another group funded several projects at Burning Man.
● 24:18: – If Daryl could change one thing it would be for people to take a broader view of what crowdfunding can be and be used for beyond the GoFundMe model.
● 29:00: – If you can see the impact of your donation, you’re more likely to give again.
● 30:22: – The biggest challenge has been funding and finding investors.
● 31:50: – What Daryl finds most exciting is the cumulative impact that Connection Point can have.
● 32:42: The platform has raised $160 million for over 200,000 projects in over 40 countries so far.
3 Key Points
1. Connection Point expands how people think about crowdfunding and its potential use
cases.
2. Millennials are more philanthropic than we give them credit for.
3. Small donations on small projects can make a huge cumulative impact on the world.
Tweetable Quotes:
● “I think it should be all about my customer and their brand experience, not mine. I’m not trying to push my Indiegogo and Kickstarter brand, I’m trying to say hey, what’s your product?” –Daryl Hatton
● “One of the things we’re looking at is how do we make philanthropy more of an entertaining experience? Because the feelings we get from giving are very similar to the feelings we get when we consume entertainment, like a movie.” –Daryl Hatton
● “Good natured people are a platform” – Daryl Hatton
Resources Mentioned:
● Website – Jason Pereira’s
● Facebook – Jason Pereira’s
● LinkedIn – Jason Pereira’s
● FintechImpact.co – Website
● Connection Point website – https://connectionpoint.com/
● Fundrazr website – https://fundrazr.com/
● Community website -
● Daryl Hatton Twitter – https://twitter.com/darylhatton
● Daryl Hatton Linkedin – https://www.linkedin.com/in/darylhatton
Full Transcript:
Jason Pereira: Hello and welcome to Fintech impact. I'm your host, Jason Pereira. Just a reminder to everybody, do visit jasonpereira.ca and sign up for my newsletter. On today's podcast. Today's show I have Daryl Hatton, CEO of ConnectionPoint. ConnectionPoint is a digital platform that allows users and companies to raise money through crowdsourcing directly on their own branded site. And with that, here's my interview with Daryl. Hello Daryl?
Daryl Hatton: Hey Jason, how are you doing?
Jason Pereira: Very well. Thanks for taking the time today.
Daryl Hatton: Looking forward to chat with you.
Jason Pereira: Yeah, looking forward to this too. So Daryl Hatton, ConnectionPoint, tell us about ConnectionPoint.
Daryl Hatton: ConnectionPoint is a social commerce company. We help people raise money for all sorts of causes and projects around the world. We're best known for our fundraiser brand, which is our compassionate charitable giving platform that does both personal crowd funding and fundraising for professional nonprofits and other organizations.
Jason Pereira: Excellent. So we'll dive into that in a second. Tell me about the history of ConnectionPoint and what led to its foundation.
Daryl Hatton: Sure. I'm what some people would call a serial crazy man because I've started multiple companies. And so way back in the '90s, I started one and we ended up taking it public on NASDAQ in December of 1999. We were one of the hottest IPOs of the year in the US.
Jason Pereira: What was it? I'm curious.
Daryl Hatton: It was called Optio Software.
Jason Pereira: Okay.
Daryl Hatton: So I had invented some of the technology that we used and became a chief technology officer and senior VP of development. So we'd done that for a few years and we finally sold it off to the private and sold it off to our largest competitor in April of 2008. And I had been commuting back and forth to Atlanta from Vancouver for multiple years and it was getting a little tired of that.
Jason Pereira: That's crazy. Yeah, no kidding. How far is that?
Daryl Hatton: Basically it's a whole day's travel. That's one way to look at it. And flying through Toronto on the way down all the time, it's 120,000 air miles a year. And Air Canada was good friends at that point. They knew me well, they knew my birthday. They knew my kids' birthdays.
Jason Pereira: And now they're dead to you, right?
Daryl Hatton: Well, I'm dead to them.
Jason Pereira: You're dead to them, right?
Daryl Hatton: Yeah. I fell off the map and I'm a nobody again, so I [inaudible 00:02:09] a lot. But basically the point of that was I got my team set up with the new company and started to look for what I want to do next. And so six months in a day I managed to exit that company and started to look at that point at what Facebook was doing and I coached the lacrosse team, the boys' lacrosse team, my son. And one of the things that came out of that is I was trying to get the boys out to practices by emailing them. No one was showing up, but I created a Facebook group and I posted the practice on the group and everybody came out and I had the epiphany of, "I wonder if I can get them to pay for their fees like this?"
Daryl Hatton: And Fundrazr was born and basically we started off as a fee collection and donation processing site for sport teams and small unregistered nonprofits. If you will, non-charitable nonprofits and the fee registration part of it didn't do so well, but the donation process and stuff took off and away we went. And that was the lunch. So that was... We actually did a first launch in September of 2009 and then, I don't know if you recall around that time, but Facebook and a gaming company called Zynga, we're battling for control of the newsfeed and Zynga was constantly having people ask to enroll because you would get points and new animals and new favors for asking friends to enroll and it was destroying the Facebook platform.
Daryl Hatton: So they decided to cut out or cut down on a lot of the viral sharing capabilities that Facebook had at the time and little Fundrazr, which was relying on all these to help us communicate to the members of my lacrosse team and the community got killed in the ensuing war between these two giants. We were collateral damage. So we actually had to relaunch, New Year's Eve, December, 2009, and I sat down with a big glass of scotch and realized that we're going to have to flush pretty much our whole first year's development effort.
Daryl Hatton: And it was bootstrapped. I put the little bit of money I had left from the public company because that had gone through the crash of 2000 and so it wasn't anywhere near what it could have been or should have been. I put all that money into building the first prototype and then we had to start again from scratch. So we launched again in July of 2010 and have had a really nice upward path ever since then but it certainly was a kick in the teeth. These kinds of startups are fun because they're somewhat dangerous but sometimes that bites you.
Jason Pereira: Yeah. Especially when you're piggybacking off another platform. All they got to do is change one rule and you're sherlocked or you're basically blocked out as you found out.
Daryl Hatton: Exactly.
Jason Pereira: Okay. So let's talk about the problem that ConnectionPoint solves. And one thing that you've done that I just think is rather unique is you are enabling crowdsourcing across multiple verticals pretty much. So speak to me about that and the experience there and why this is kind of not just one large crowdraising funding mechanism like GoFundMe or Indigo or Kickstarter.
Daryl Hatton: Sure. We started as a personal crowdfunding site. So basically it was around the idea that an individual or a collection of individuals being a sport team or something like that could raise money. And so in that way it was similar to what GoFundMe is. But along the way, because of our visibility of our campaigns in Facebook, the ability to get the message out through Facebook. And we were one of the launch partners with Facebook for the timeline feature. So one of the 30 companies in the world that were in the closed beta program that allowed us to know how the newsfeed would work before everybody figured it out, how timeline would work.
Daryl Hatton: So because of that, we had a lot of nonprofit customers coming to us and saying, "Hey, can you add the features that we need to make it work as a professional tool?" So we had all this different types of unincorporated causes working with us, like schools and sport teams and individuals raising money for healthcare and all those different types of things. And then we started to get a lot of the different types of charities that are working with us. And along the way we also had people who were saying, "Hey, I'd like to do my Kickstarter, Indiegogo type project. Do you have those capabilities?"
Daryl Hatton: So we added in a bunch of those capabilities along the way as well. But different from those platforms, we let companies, if they're running their rewards-based crowdfunding campaign with us to use their own branding on it. And so they run it as the room platform. And there's some use cases and we'll talk a little bit more about that from the business side as we get further along. But basically we had all these different types of customers using our platform to the point that we started to call it fund anything, fund everything.
Daryl Hatton: And if you had a community that would support you in some way, you could use this type of technology to rally that support, get some money in, and hopefully make your project successful. As we got further along, we started to see additionally use cases for this come out and that's when we started to do, I think what you're referring to is the idea of branding for different... And packaging for different types of markets. And so one version of that is something we call CoCoPay. CoCoPay stands for Collaborative Community Payments. It's the idea that you could use crowdfunding technology to help a customer buy your product or service. And by rallying support from the crowd, the customer themselves may not be able to afford your product, but their friends and family may help them buy it. And a good example of this is an Alinker bike.
Daryl Hatton: This is a device that was created by an entrepreneur to help people who have mobility problems. And they can buy this bike and it really improves their quality of life. Sommer Blair, the actress just got one in the fall and raved about it and it's just created quite a sensation. It's been on a lot of the talk shows and things like that. But Bee Alink, the CEO of the company, we convinced her to put crowdfunding into her website, white-labeled so that she could help her customers start a campaign to buy one of her bikes. And it took off for... It's created a tremendous amount of interest from the community in buying these bikes.
Daryl Hatton: And what it's allowed her to do is to get revenue from customers who can't afford her product because the community cares enough about the quality of life of that customer, they should help them buy it together. So that's an example of the technology, the techniques of crowdfunding, but applied in a different circumstance, in this case, a very commercial one. It's helped her get... Last count she'd sold 80 of some of the bikes in six months to people who couldn't afford it and she has hundreds of other people that are interested in doing it.
Daryl Hatton: So it's really enhanced her business at the same time she's getting to do some good in her community and helping change people's lives by getting them a bike they couldn't afford.
Jason Pereira: Well, it's fantastic. I mean it's... You look at the success of all the big crowdfunding resources that exist, go to GoFundMe where you can basically put up any cause and it makes a lot of sense. You're starting to see... You see they're a lot of the same things over and over again, right. I need money to pay for... Unfortunately, I didn't get travel insurance getting me back to the country or usually medical causes. And then I think I seen some [inaudible 00:09:01] in the past.
Jason Pereira: But you would think that especially if a company wants to show like their social, that they actually care about their consumers for which they are doing positive things for being able to enable crowdfunding on their site as a mechanism for allowing for community raising of the funds to purchase their services or goods is was a natural step when you really think about it, right? And it's one that they can... I mean, I'm guessing from what I can see from CoCoPay, there's a lot more custom tailoring of the branding and message surrounding that than you would see on say GoFundMe. Is that right?
Daryl Hatton: Totally. In fact, if you go to Alinker site, you will be hard-pressed to know that it's CoCoPay. It just looks like the Alinker site is enabled with crowdfunding to be able to run these campaigns. There's a little bit of our branding in there to try and help get some customers. Hopefully over time build up some familiarity with this mechanism, but as far as we're concerned as a platform, maybe I'm not that smart, but I think it should be all about my customer and their brand experience and not mine. I'm not trying to push my Indiegogo or Kickstarter brand. I'm trying to say, "Hey, what's your product?"
Daryl Hatton: We look at people who are running the projects on Kickstarter and it's a badge of honor. I'm running my Kickstarter campaign to raise money to build my little new thing, whatever that thing is.
Jason Pereira: Mm-hmm (affirmative). Yeah.
Daryl Hatton: Then why are you putting so much brand equity into Kickstarter? Why aren't you putting that into your own product? Run this in your own website, build your own community around this product because you're going to have more than one product. You're not going to be a one hit wonder. You need to start building your own community and not just building up the brand of the crowdfunding platform.
Jason Pereira: I'm curious, have you looked at any kind of working, say the publication space because I mean [inaudible 00:10:33] made some really good inroads in specifically becoming a hub for people who want to sponsor, say podcasters or bloggers or whatever it might be. You had any inquiries from people in, we'll call it newer nonconventional media at all?
Daryl Hatton: Yeah, for sure. We actually have a lot of people doing that. Some of them are small and some of them are large. We have the national review conservative newspaper site using us for their crowdfunding efforts to raise money to support their publication. As they're heading into an election year, this is one way for them to rally their supporters to get more money and to get the message out about conservatism and that kind of thing. In the same token, we have on the other side of the political fence in the US, we have a lot of the groups that are doing independent publishing of news. So RM News and a few others, will do a lot of their own Patreon style subscription work, "Hey, help support us in this."
Daryl Hatton: So I mean again, it's that the tool is very flexible. Patreon was very smart in that they went after the creatives community and created a great environment for that and they've done very well with it. We just have people who are trying to do that technique and it works well with us. We just don't have the same brand presence.
Jason Pereira: It's interesting. Patreon, I mean this is a bit of a segue, but Patreon has received some criticism for "de- platforming" some various causes that they maybe did not align themselves with. Are you concerned about that, about your platform? Like are you filtering through who gets to use your platform? How are you going to prevent that sort of criticism from happening to you?
Daryl Hatton: That is a really sticky question. And we have that issue. So we have people who are crowdfunding for legal defense on our platform and if someone has committed a crime, the community around them typically wants to lynch them at that moment. They want it like... They don't want to know whether there's a fair trial. They want this guy dead because they believe the accusation. And the idea of innocent till proven guilty has been thrown out the window in modern society. We have lynch mobs now. Digital lynch mobs for sure. So the question comes up is how far can we go with these campaigns on our platform? I fervently believe in free speech and trying to help let somebody have their day in court. Let's trust our legal system that if they get money to go into court, we'll get a fair trial under this and that we'll end up doing justice.
Daryl Hatton: But the digital vigilantes won't let that happen. And they will punish other good-natured people on our platform. So for example, when we've had somebody who was accused of a major crime, the vigilantes have gone and picked all the campaigns on our homepage and made comments on them. You need to stop supporting Fundrazr, they support baby killers. And it's like, "Oh, my goodness, this is not... We don't support them."
Jason Pereira: Insulted by the Twitter mob unfortunately.
Daryl Hatton: Yeah, we're trying to support the justice system to do its job. In some cases, we now have a rule that says, if you've been accused of a violent crime, we can't run your defense on our platform. That's an example.
Jason Pereira: Yeah, I mean it's a really... Like you said, it's a very sticky question and it's one, again, many people have wrestled with, many companies have wrestled with. So let's go back to the actual experience of ConnectionPoint. So let's say that I for example, have a financial planning blog in FinTech podcast, right? Or to I kind of play the integrating-
Daryl Hatton: [inaudible 00:13:41].
Jason Pereira: Yeah, I mean I don't know who that could be. And I kind of play that integrating... You're getting on Patreon, how would I instead utilize ConnectionPoint?
Daryl Hatton: You'd probably go into our Fundrazr brand. And potentially you can use CoCoPay for this as well. And the idea is that you'd run a campaign and your campaign would probably offer some incentives or perks similar to what you might do in Patreon to become a sponsor or a member of your community. So you might get somebody to give you 5 bucks a month or 10 bucks a month to be a premium member of the podcast. Maybe they get a special link. The question is what can you do for your community to make it so that your supporters who give you additional value because they give you some money, get additional value back? Patreon works out really well if somebody is a photographer or a model or something like that, they'll share their portfolio work with someone and they get exclusive access to content that's not publicly available.
Daryl Hatton: It's a little hard when you've got a broadcast channel, you're trying to get a large audience as you are to have kind of exclusive content in that until you perhaps get to be a larger size. But you could use our platform to create the environment where you could do a subscription. Even as an independent producer of a podcast, you could collect a subscription payment and a membership payment for someone to join your crew and work with it.
Jason Pereira: So what is the experience of going on Fundrazr look like then?
Daryl Hatton: If you went to fundrazr.com, and we should explain to people Fundrazr is spelled funny.
Jason Pereira: It'll be in the show notes. But yeah.
Daryl Hatton: It's F-U-N-D-R-A-Z-R or Zed-R, depending if you're American or Canadian. And if you go onto the site, getting started is as quick as there's a start button and over the next two or three minutes you will be logged in, putting your details about how you would get paid and you can create your campaign and you'd start with a basic campaign template. And then how long it takes you to finish your campaign page depends on how much you want to put in effort to put into the content on that. But it's frequently done in 15 to 20 minutes by the time someone puts in a photo and some story. And then you're up and running and you can start raising money from that.
Daryl Hatton: So if you're a nonprofit, we actually have what we call a frictionless sign up where they can get started and play around with the platform without even having to go through a bunch of the registration details of their organization. They can just see what it's like because nonprofits tend to want to experiment a little bit with how the tool works before they commit to using it. And so they have even a lighter weight version of that.
Jason Pereira: So once I've set that up on your site, how does it relate to my site? Is there a plugin? Is there some sort of code I plug in? Is it a page that I copy over? Link? How does it work?
Daryl Hatton: Yeah, no, we generate... If you want to embed it in your website, we generate what we call smart widgets. And a smart widget is a little bit of code you'd plug into your website and we call it a smart widget because once you've done the code to identify which badger or type of content you want up on your site, you don't have to manage it on your website anymore, you can manage it through a graphical interface that we have on our site. So you can set things like... We have basic widgets to make sure your campaign page itself, and that campaign page would open up in a light box over the top of your website or redirect to a page if you're on mobile.
Daryl Hatton: So it's a very, very good experience for someone coming to your site. They can just get to the campaign page right away, not having to navigate away. But if they... Some of our nonprofit customers will put in a collection of widgets, they might be running a pet rescue, for example, might run a whole series of campaigns, one per dog in a technique we call micro-projects. And they have a campaign per dog and they show the collection of the available dogs to adopt or support on their webpage with just one of these smart widgets which would then... You tell it to put the content in, have a grid of campaigns or a carousel of campaigns and it'll automatically generate that on the site.
Daryl Hatton: It's very quick and easy to put it into your website and lots of power. I mean, one of the big concerns a lot of people have is, "Wow, there's so much I can do with this. And we just have to guide them through some of the steps of what's possible because it's just amazing what they can accomplish.
Jason Pereira: So let's talk about pricing. I get signed up, what does it look like to work with you guys?
Daryl Hatton: Well, we charged you the outrageous price of free to start. There is no monthly annual set up, any kind of fees like that. And we actually kind of let you fundraise for free. You still have to pay your payment processing costs. You can't get away from what the credit card company is going to charge.
Jason Pereira: Noone's getting away from that anytime soon.
Daryl Hatton: Nobody's getting away from that anytime soon. But we have a technique, and I'll tell you more about that in a sec, but we have what we call a free model and with the free model we just ask the donor for an optional and it's optional tip to us as a platform to help you run your crowdfunding campaign. And we get enough people contributing through the optional tips that we can make enough money to run your campaign for you. So literally you can use our system for free and we make a little bit of money by getting people to contribute to support us. Our mission we said is, "Can we give you the world's best digital fundraising system for free or as close to it as possible?" And the closest to it as possible is that we also have something we call a pro-funding model.
Daryl Hatton: And then the pro-model, instead of us asking for a tip, typically nonprofit will ask their donors to cover the processing fees for them. And a vast majority of donors will do that if they like the cause. So it gets down to the point where it will cover not only our platform fee but the payment processing fee. And with the participation of their crowd, they can get their costs of fundraising down to less than 1% total. So that's... I mean your credit card fees are typically two point something percent and 30 cents a transaction.
Daryl Hatton: We can get it down to almost free. And with the right community you can get it down to free free. So if you've really strong supporters in your community, you can get your fundraising for free. So we're trying to lead the world in just how aggressively can we push this model to help people raise money that they need without having to pay for it.
Jason Pereira: Yeah, I mean it's funny because so much attention is paid to Not-for-profits and the amount of money that actually gets deployed to the causes they're trying to serve, right. And they almost get punitively punished for having any kind of administrative charges whatsoever. So I think this is a way of kind of turning your back on the donors and saying, "Well you want money to go to your cause, here's a better idea, help us pay... Yeah, why don't you pay the credit card company to give us the money so we can have more of what you give us go straight to them. Flipping it on its head.
Daryl Hatton: Yeah, exactly. If you wanted to give $100 to get some work done, help the cause because nothing's for free in the world. There's always a cost somewhere.
Jason Pereira: Especially credit card processing.
Daryl Hatton: Credit card... Well, you know it's not easy, but we can make that a whole lot easier. And as a result, I mean obviously it's very popular with the Not-for-profits and individuals raising money for themselves.
Jason Pereira: That makes a lot of sense. I mean, I'm going to take a harder look at that so people might not be surprised to see you pop up on my website in a couple of weeks. Yeah, so.
Daryl Hatton: I'm happy to help you do that, that'd be a lot of fun.
Jason Pereira: No, it would be. So a couple questions, what's the one of the more creative uses of what you guys have... You guys have put out there? Then what use of your software has kind of surprised you? We never would have thought that someone would have leveraged crowdfunding for that.
Daryl Hatton: I've got a great example of that. The university of California, San Diego has a project called the American Gut Project and they study the human microbiome. So this when Rob Nate was the lead researcher there, brilliant guy, speaks at Ted conferences and all that on your microbiome. And microbiome is all the bacteria that are on your skin and in your gut and the whole community of billions of microbes that help keep us healthy funny enough. And he said that your microbiome was more important to your health than your genetics in determining your overall quality of life. And they'd been finding about why people get colitis and all these different things because of deficiencies in their microbiome. You give your baby an antibiotic when they're six months old because they've got an ear infection.
Daryl Hatton: It sets their intestinal tract back about six months in development. It's amazing. But anyway, so what they did is they came to us about six years ago and they said they wanted to crowdfund to help people participate in their study. So American Gut, if you go to fundrazr.com/americangut, you'll see what's probably the largest crowdfunded science project in the world. And they've raised between that and the British Gut and a couple of other implementations that they've got, they've raised over $3 million for scientific research by selling poop collection kits. And the results of your test get put into the cert, so you get your own results back about what your microbiome looks like.
Daryl Hatton: And then they use that data to determine and help expand on the knowledge that they've got. And occasionally they'll give you an update saying, "Hey, we now know that deficiency of this kind of organism might result in irritable bowel syndrome."
Jason Pereira: It's like the Not-for-profit research based version of 23andMe essentially, but for poop.
Daryl Hatton: For poop, for poop. So-
Jason Pereira: I can see how that surprised you. I would not have thought that you would've helped collect poop from millions of people across the world.
Daryl Hatton: Yeah. So we have a lot... We've helped save a bunch of babies from leukemia and things like that by helping fund their stuff. But that one's fun. And this year we had a group that did a whole bunch of the projects at Burning Man in the Nevada desert. So they crowdfunded to build the things that they were going to either take as an art exhibit or the things that were going to burn down. So the temple that they took, they crowdfunded with us. And if you want to see some examples of some fun projects that we do, we have a little mock-up site that we did called community. Communitty, spelled with two T's, so C-O-M-M-U-N-I-T-T-Y.com. And on there we've got examples of the different art projects like they did for Burning Man and some of the pet rescue that raised, I don't know, it was a quarter million dollars for the hurricane in the Bahamas.
Daryl Hatton: We've got some different examples of different kinds of campaigns up there, but it just gives you an idea of the breadth of the different things that people have funded. And some of them move us to tears because they're just so heartfelt and they've helped us recover from a tragic accident and some of them are just whimsical and ridiculously fun. We had a group that was doing a game around the... A science fiction game around the characters, the members of the band BTS, and they ended up getting a whole bunch of money to build this game at personifying these characters. I mean it's just really crazy interesting projects that frequently are unexpected.
Jason Pereira: Fantastic. So before we wrap up, three quick questions that I ask everybody to make you think. So the first question is if you had one wish for something you can change in your company or in the industry, what would it be?
Daryl Hatton: I think if I could be granted one wish I would love people to stop putting crowdfunding in a tiny little box around, "It looks like GoFundMe." And start looking at this as this is the way community can collaborate to fund things. It could be a government project, it could be a healthcare project, it could be a clean up the oceans project. There's all sorts of different things that we could do if we just get out of the little box that it's only useful in these ways. I like a lot more companies to understand how they can use crowdfunding for product development or for selling to their customers like Alinkers are doing. That would be a wonderful thing from my point of view.
Jason Pereira: I mean it's interesting, we have a very westernized view of money and society and community and the money aspect is a little bit different. I mean first off, I mean you're really a platform for enabling altruism in a lot of ways. And not just altruism, [inaudible 00:25:13] altruistic, you could also basically get or just funding the causes or the things you care about that could be, like you said, a video game or something to that effect. You really want to... We would love to play that game. Great. I'll donate to it. But you don't get other parts of the world specifically Africa and Southeast Asia in the concepts of money and community around that and everything's community funded.
Jason Pereira: Just without a digital platform, it's like you basically went off and got a job there, that's fine. You can give back a certain amount of the money to your community because they help get you through school and that's going to pay for things that happen to help support the community. And I think it's interesting. I think a more digitized Africa would be a good thing for you altogether because this concept is probably far more common to them as well. The concept of community sponsorship is far more common to them than it is to us unfortunately.
Daryl Hatton: Well, it is. One of the things I did a TEDx talk in October, which will hopefully be published here very shortly on philanthropy is entertainment, binge watching for good. Basically, if we want a series of millennial donors to give more, one of the things that we are looking at is how do we make philanthropy more of an entertaining experience because what we're ending up with is the feelings that we get from giving are very similar to the feelings we get when we consume entertainment like a movie. If you think about a romantic comedy, you know that the result is the girl's going to get the guy and it's just what they have to go through to get there.
Daryl Hatton: A lot of the times if we're telling the story of a community project, it's a very similar heroes-type journey. We've got some people that are trying to solve a problem in an area. We learn about the trials and tribulations they go through along the way, if we keep telling that story repeatedly, millennial donors will keep giving to it as long as they see that they can make an impact to move the ball down the field a little bit.
Jason Pereira: But is it entertainment so much as it's an engagement, right. I mean like giving to a large faceless cause versus actually seeing the net benefit of the dollars you spend. I can understand that one- to-one connection a lot more now. I've spoken to many charities about the struggles they're having these days because reality is everybody's got a little bit of charity fatigue these days. You get asked by every co-worker you have on a monthly basis for, "I'm doing this ride or I'm doing this walk or I'm doing this whatever." And when the charity comes around and basically says, "We had this wonderful cause, can you support us?" Oh, I give at work or I give here, I give there, right. You're being saturated, it's almost death by a thousand cuts, right. And a lot of charities that are big names, but just maybe not getting crowded out by some of the bigger names like local children's hospitals or whatever else it is, they're struggling, they're struggling.
Jason Pereira: They're seeing donor amounts go down. And part of it I think is because there is a detachment from it, right? The person in front of you basically says that, "Hey, you know what? I'm going to run my first marathon and I'm raising money for charity." I'll support that. There's your entertainment or engagement standpoint. But I think you're absolutely right. I think if we can... If we communicated it better in a more dynamic way as to what we've done in terms of our contributions, their impact on the people we're trying to help or the causes we're trying to help, we're probably far more likely to continue that behavior.
Daryl Hatton: Exactly. And we think that what we know is we can almost make it addictive to the point where we've had... So we work this project concept, we called micro-projects and we have a lot of our pet rescues who will do this. They'll run one project per animal they're trying to rescue and they'll get a small group of people who will help make sure that animal gets out of the kill shelter. And then they tell the story of that animal like what happened to it, why is it there? What's going to go on? And people feel really good because they kind of know that they've saved all these different animals. We had one donor who was giving so frequently we had to check in to make sure we weren't having a home shopping channel problem where this little old lady was sitting at home giving away her life savings and we checked in on her to make sure that she could actually afford it because she was giving to all these different animals all the time.
Daryl Hatton: It was so addictive for her to feel like she was saving this many animals.
Jason Pereira: It's just important to her, right? It's her preference, I mean.
Daryl Hatton: It's her preference. And so the point is that you can make it if you see the impact, as you said. If you can see the impact, you're more willing to give again, especially if you're giving small amounts, 5, 10, 20 bucks. I'll give up a cup of coffee and give you 5 bucks for that. If I can help make sure that this dog gets out of jail today, it's not me doing it, it's us doing it. And I think that the millennial generation is much better at that than we may ever give them credit for. So that's one of the things that we're seeing. And you talk about Africa, we have a group called Thrive for Good and what they do is they train trainers on how to plant organic gardens in Africa. And then they will go into a village and they'll gift the village the first year of their garden, they send the trainer in to teach 12 families how to run the garden.
Daryl Hatton: And it's one of the ways... They ended up with a sustainable food source that is organic and healthy for them. They also grow medicines like [inaudible 00:29:46], they help them with malaria. And this program works really well. Donors will give to a garden through the trainer. They support the trainers saying, "Hey, you can go do a new garden." And as a result people are getting the stories back about the gardens and the people that they're helping. And it's turning into a really interesting ecosystem. So our mission is can we re-imagine philanthropy and change the way we do it so that we can create more sustainable funding for the world's most important problems.
Jason Pereira: [inaudible 00:30:11]. So the second question I have for you, what's been the biggest challenge in getting to where you are today? Besides the need to recode everything in Facebook? Sherlocking.
Daryl Hatton: Yeah, well those are just... Yeah, that's just a fact of life, funding. Trying to get investors to understand a business model where we give it away for free and we make money has been really challenging.
Jason Pereira: Yeah, it's interesting. I mean I find that semi-true. It's somewhat surprising, because I mean there's so many freemium models out there or indirect compensation models these days. I mean we could just named Facebook, right? The perfect example. They're giving something away, but they're making money off advertising. You're giving something away, but you're making money off of the fees on... Yeah. I mean, anyway, so one would hope that you find a few more broad-minded funders going forward for this because we're the cause.
Daryl Hatton: But that has been the challenge. I've gone into investors and they don't like the fact that our SAS revenue is not contracted. For example, they say, "Well, the customer can give up on you." And it's like they can give up on your SAS contract, don't even-
Jason Pereira: Yeah.
Daryl Hatton: I can sue a guy for $200 a month contract.
Jason Pereira: It's valuation metrics. I mean, the reality is that and it's very simple math around SAS. If you have two- year contracts on SAS contracts, those numbers that... That leads to the highest level of valuation you can possibly get on a SAS company, right? So therefore if you're a funder, you want to see two-year contracts on your SAS. Like meanwhile, it's like we all get annoyed by the, "Oh, this is only going to cost me 9.95 per month, but you want me to sign a two-year contract to get that price. And if not, it's $25 per month? Give me a break." Like it is what it is.
Daryl Hatton: But that's been a challenge as we tried to bend the model around to support an investor. It hasn't worked. So we've focused on helping the customer and we'll just make it up along the way.
Jason Pereira: Absolutely. So last question for you is what gets you up in the morning and excites you and keeps you going to keep doing what it is you're doing?
Daryl Hatton: Well, besides the fact that running a small company can be an absolute blast, it's a little bit like driving a sports car. Probably can be felt a little bit more like a Mack truck. We could carry a whole bunch of stuff in one direction really fast, but don't try and corner that sucker because it's going to roll over. But a startup can feel a lot like driving a sports car. So that part of it is a lot of fun. But I think what really brings me into the office every day is what I would call leveraged impact. By the time we're done, we think that we can help raise $1 billion for charitable projects and business projects all over the world.
Daryl Hatton: That'll do things like reduce poverty and increase education and improve food security and reduce addiction, save babies from critical illness, help companies launch products, save many, many, many puppy dogs. I mean, it's leverage. So the little bit of work that we do helps create this result. We've raised $160 million for over 200,000 projects in 40 countries so far. And I'm pretty sure that by the time we're done, we're going to hit a billion dollars of impact, which is going to... We think about all the places that'll help in the world. That's huge.
Jason Pereira: It's incredible. Well, thank you very much for doing what you're doing. You're helping out countless causes and hopefully countless more going forward. So Daryl, thank you very much for your time. I'm sure everybody will appreciate this and encourage anyone who's looking for a crowdsourcing solution to check out ConnectionPoint and the various properties that you've built underneath that.
Daryl Hatton: Well, I appreciate it. The chance to talk about it with you has been fantastic. Thank you.
Jason Pereira: My pleasure. Take care.
Daryl Hatton: See you.
Jason Pereira: So that was my interview with Daryl Hatton of ConnectionPoint. Yes. I may end up adding that section to my website shortly as soon as I have time to get to it. In the meantime, for those of you who could benefit from his solution, please take the time to check it out. Until next time, I'm Jason Pereira. And as always, if you enjoyed this podcast, place a review in iTunes, Stitcher, or wherever it is you get your podcasts. Take care.
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