Being Humble when you’ve raised $12.6 million

What would your reaction be if you walked into Starbucks and the barista told you that you could pay whatever you wanted for your coffee? Oh, and if you wanted all the money to go to charity instead, that’d be cool, too? In addition to buying 17 carmel macchiatos with the 13 cents you found in your pocket, you’d also probably wonder who in Seattle lost their sanity.

Well, that’s exactly the pricing model Humble Bundle offers. They provide limited-time offers on bundles of video games, in which buyers set their own price, and then choose how much goes to charity. The latest bundle, simply called “The Humble Bundle for Android 2”, was released just this week. How does it work? Instead of being one of those blogs that just regurgitates content found elsewhere, I’ll just point you to their video:

Here are some stats on their success: 2 years old, 2 million transactions, and $12.6 million raised for developers, charity, and themselves (the exact breakdown to each party isn’t made available). It’s an interesting pricing model that’s likely raised a handsome sum for charity, but could it be applied to other types of products as well? Let’s take a look at what makes the Humble pricing system tick and see where that leaves us:

Acting like the boss

When you learn that your boss at your new job doesn’t come into the office until 10:00 AM, you learn that’s OK if you don’t want to arrive until after 9:00. When he shows up in jeans, you can confidently come back to work the next day in that acid washed denim that’s been in your closet for 26 years (right?). He sets the norm; you feel better because you know what’s expected. Humble Bundle does the same thing. They start buyers off with a default split of 55% to developers, 30% to charity, and 15% to Humble Bundle. Hard to feel anxious about getting the allocation wrong, when a strong suggestion is made for you.

A gentle guilt trip

Humble Bundle does a couple smart things to encourage you to pay a legit price. First, they show real-time data for the average purchase amount. If you decide to pay less then that, they’ll remind you with a nice blue warning banner before you pay. Secondly, if you pay more than average, you actually get an extra game. It’s a slick combination of guilt and rewards to keep buyers honest.

Freeloaders don’t (really) count

Some users are going to pay only a few cents for these games. But in addition to not being cool, they’ll also be negated out by the thousands of buyers who do pay a reasonable price. A high transaction volume (over 70,000 just three days in) keeps the moochers at bay.

Standard fare

Downloading video games is becoming pretty standard. You do have Angry Birds, yes? Even though the pricing model is strange and new, everything other aspect of the promotion is standard fare. That’s important, because if potential buyers are asked to digest too many unfamiliar pieces, they’ll leave.

$0 marginal cost of distribution

This one’s pretty boring, but it’s one of the most important. Downloadable digital goods cost next to nothing to distribute. Each copy sold costs about $0.00 to make and deliver. So if a user pays a mere penny, no one is any poorer for it.

Obscure quality

It’s indie developers who submit games to these bundles – newer companies who are relatively unknown. Even if these developers don’t make much per copy sold, they still benefit from the increased exposure and gross sales. Gamers benefit, too, by being exposed to quality games they may not have discovered otherwise.

Limited time

If “set your own pricing” were available all the time, then that would customers to expect such treatment all of the time. That’s not sustainable, and it certainly won’t make developers happy. (Is there any reason why an “add your own donation” piece couldn’t stick around forever, though?)

That’s a long list of things that contribute to the success of the model. Could this work elsewhere? Not at Starbucks, but I think there’s plenty of ideas here that could be applied to online retail, for one. Where else do you think a Hunble-esque offering would do well? Let’s hope that Humble Bundle continues to be successful, raise gobs of money for charity, and encourages others to follow suit.

Is the criticism of KONY 2012 legit?

It’s been a full week since Invisible Children launched their now-famous “KONY 2012” film, which seeks to raise awareness of Joseph Kony, an African war criminal who’s responsible for the death and abduction of thousands of children. Seven days old, and KONY 2012 has garnered nearly 100 million views. With all this attention, both the film and Invisible Children itself have received their fair share of critics. Are the attacks warranted? In this post, we’ll deconstruct the criticism and find out.

But first, if you haven’t seen the film, watch it now:

Here’s a short list of what the critics have been saying:

There are several issues raised, but we’ll examine three of them here: (1) the way in which Invisible Children allocates its funding; (2) a critique of the film’s message and it’s “truthiness”; and (3) that the film and Invisible Children promote “slacktivism” instead of real action. Let’s tackle each of these directly:

Finances

Invisible Children has been called out an apparent lack of funding that is used on “direct” programs, i.e. work on the ground. Things like building schools and building radio towers. A cursory glance at their finances reveals that “only” 37% goes towards African programs. Typically, non-profits that primarily engage in “on the ground” work will allocate 80-90% of their expenses to those programs, and the rest towards overhead and fundraising. If Invisible Children were a traditional non-profit, then that number would be appalling. But Invisible Children isn’t a typical charity; instead; filmmaking and advocacy are also core parts of their mission. Making documentaries and educating people about Joseph Kony is what they do. If you look at their expenses used on all three of these programs, you’ll find that they’re just about as financial efficient as any non-profit. So as long as Invisible Children makes it clear that direct work is just one of their focuses, along with film-making and advocacy, this shouldn’t be an issue. And for someone who wants to educate others about Joseph Kony, supporting Invisible Children would be a great way to do that.

The Film

How many documentaries are you aware of that have universal appeal, and were made without bias? I can’t think of many either. Much of the criticism of the film itself has to do with it delivering an over-simplified message. Other critics point out that the film promotes that idea that Americans (and white people) are the “saviors” and that Africans aren’t capable of helping themselves. Those are valid points, and the film isn’t without its faults. But let’s also consider a few other factors. Who is the film intended for? Invisible Children focuses mainly on educating high-school kids, college students, and young adults, many of who are unlikely to know very much about foreign issues. And their audience isn’t as interested in sitting through a lengthy, comprehensive documentary as a foreign policy expert would be. So the fact that the film focuses on delivering a simple, easily understood message makes sense, considering its target audience. If the goal of the film is to engage a young generation around a pressing issue halfway around the world, then KONY 2012 is an astounding success. If it were to educate viewers on the long and nuanced history of war crimes in central Africa, then it would a failure, but that was never its intention.

Slacktivism

“Slacktivism” is a disparaging term used to describe feel-good actions that don’t have any real impact. When someone merely tweets about a cause and says “I’ve done my part”, that’s slacktivism. You’ll find Invisible Children accused of promoting slacktivism in more than one critique. If KONY 2012 campaign merely engaged 100 million people for 30 minutes and nothing else resulted, then yes, Invisible Children’s efforts would be pretty meaningless. But let’s not forget that no real action can start until people are aware of an issue. Sure, merely watching or sharing a video won’t do anything to directly change anything in the world. But that’s just as true for a film about Joseph Kony as it is for an IMAX movie about rescuing orangutans and elephants. But I don’t hear many people cracking down on IMAX movies, do you? Educating people about a cause is a first, and necessary, step to get people involved. In fact, Americans already suffer from a pretty severe lack of global awareness, so films like these are a great way to prevent future generations from becoming ignorant and passive about the rest of the world. Efforts to enlighten others about issues that cause human suffering in the world shouldn’t be criticized, they should be championed.

Invisible Children’s Response

This post wouldn’t be complete without including Invisible Children’s own response to criticisms KONY 2012, which they’ve done here. Their CEO also did a decent job of addressed detractors in this video, which he posted today:

Whether you agree with Invisible Children’s KONY 2012 campaign or not, the important thing to watch is the results. What will happen now that nearly 100 million people have seen their latest film? Will our government change its support African troops in arresting Kony? Will children in central Africa be any safer? These questions are the ones that matter. If Joseph Kony is brought down and kids in central Africa can begin live without fear, then Invisible Children should be applauded for their efforts. Share your own thoughts in the comments below.

When Daily Deals and Causes Combine

This blog is all about finding innovative (and easy) ways for people to engage in philanthropy. Here’s a no-brainer – daily deals site Living Social has started to offer cause-related deals, in which your donation is doubled by a corporate sponsor. The current offering is for Marine Toys for Tots:

Today, we’re offering an opportunity to express our gratitude for all we have by helping those who have less. Donate $5 to the Marine Toys for Tots Foundation and Toys”R”UsHasbro, and other corporate partners will donate $5 worth of toys for a $10 total contribution up to $1 million.

It’s a great start, and an offering I hope Living Social will continue to pursue. Next time around, here are a few suggestions to make these cause-related deals even more compelling:

  • Offer users a choice. Marine Toys for Tots may not appeal to everyone, so why not take a note from PinkDingo and at least give donors a choice of a few charities?
  • Don’t exclude retail. SocialGoodies understands this. Why not set aside some of the savings from a traditional retail daily deal to causes?
  • Give some reward. Give buyers of cause-related deals some credit for their donations, like early access to deals, or a special “thank-you” from the charity. Something to make your cause offering more compelling than other ways to give.
  • Make them easy to find. If you don’t have the email offer, finding a cause-related deal on Living Social’s site is a bit of a chore. Look hard enough and you’ll find it under “Families”. Shouldn’t there be a dedicated section for these?
The exciting thing about cause-related daily deals is that they start to blur the line between pure philanthropy and pure retail. If companies find that they can better attract and engage customers by adding a cause-element to their retail offerings, we should start to see even more innovation in this space. Offers like this from Living Social are (hopefully) just the tip of the iceberg.

What do you think about cause-related deals? How else can they be improved, and who has the best offerings?

3 Ways Zynga’s CastleVille Promo Could Integrate Causes Better

Zynga, the heavy hitter in the social gaming space, announced a new cause-promotion last week for one of their new games, CastleVille. While Zynga should be commended for making efforts to support causes through its marketing, they’ve fallen short of integrating charity into the promotion as well as they could have.

Here’s how the promo works: visit the CastleVille page on Facebook and “Like” the game. Then, select one of three non-profits to whom you’d like to designate a donation from Zynga. If CastleVille reaches 5 million “Likes”, then Zynga will donate $100,000 to these causes. The non-profit with the most votes will receive $40,000, while the other two each receive $30,000.

Again, it’s great that Zynga has decided to integrate charitable support into the promotion of a new game. But they could have done a much better job on making the integration with causes more meaningful. Here are three ways they could have turned a single into a home run:

1. Integrate with the product: Three causes are presented for voting: clean water (via water.org), disaster relief (via Direct Relief International), and Education (via Save the Children). Try to find any relationship with the game, which is about exploring a medieval world with your friends, and you won’t find much of a connection. Not that there has to be an overt link (is there even such a think as a medieval-based non-profit?), but some attempt to connect the two would have made the causes much more relevant. For example, are there characters in the game that Zynga could have associated with each non-profit? Even a loose connection would have been better than nothing at all; instead, the causes feel tacked on to the promotion, without much thought.

2. Provide context: You might have expected that Zynga would have provided some further background information about the three non-profits they’ve presented. But there’s almost nothing to provide any context around these causes. For clean water, for example, all users see is a generic water icon, which turns into a water.org logo when the moused over. Users don’t need a complicated set of information to read through, but some additional background would have added some real meaning. How about a picture of the people who are being helped? Or maybe a tidbit of information about where in the world the money is being used? Taking a page from Donorschoose.org or GlobalGiving.org would have made the causes much more real.

3. Allow users to step it up: Liking content on Facebook is a sure-fire way to allow users to show their support of something. Great. But what if someone really wants to see that $100,000 get donated? Short of spamming their friends to Like the CastleVille page, there’s not much else a cause-advocate can do. So how about allowing users to buy more Likes buy pre-purchasing virtual items in CastleVille? Or give fans a CastleVille character to use as their Facebook profile pic to drive further awareness? At the very least, Zynga could have offered users the chance to donate to those charities directly, by providing links to each non-profit’s site right on the Facebook page.

Will Zynga’s latest cause campaign obtain the 5 million Likes they’re striving for? It’s too early to say, but at the time of this writing (about a week into the promo), there were about 300,000 fans. What do you think? What are some ways Zynga could have done a better job of integrating with causes?