Crowdfounding, With A Twist of Innovation: Interview with Sponzu Founder Natalie Kaminski

29 Mar 2011 in Interviews

Welcome to The X Factor’s brand new illmatic redesign! Let’s just say….thanks a MILLION to Petovera Design.

As an aspiring entrepreneur myself, I think one of the best ways to learn is to go directly to the source and study the stories of founders building startups. Wait ’til you read Natalie’s interview.

Natalie Kaminski was born in Russia, grew up in Israel, and immigrated to the US without her family when she turned 18. She climbed the corporate ladder for ten years before becoming the victim of the ‘entrepreneur bug’ that we all know so well. Today she’s the founder of Sponzu, a NYC-based startup that has taken an innovative approach to crowdfunding. You can watch her pitch Sponzu here.

SPONZU’S TAKE ON CROWDFUNDING

Sponzu has developed a new social fundraising platform with an innovative twist. Currently in beta, Sponzu allows individuals, communities, and organizations to self-promote their ideas among supporters and attract capital.

What makes it unique? In order to help fund small projects and ideas, users are encouraged to spend time (instead of money) engaging with sponsors. How? By watching sponsors’ ads, rating their videos, providing feedback, and even taking marketing surveys. Each of these actions kicks back revenue to Sponzu from the sponsors, and then portions of that revenue is sent to whichever project the user has chosen to support.

To give their users more options to help, Sponzu has partnered with TinyPass – a micro-payment solutions company. So users will also be able to contribute small amounts of money (less than $1.00) to causes.

With that, let’s get down to the goodness: my interview with Natalie. In addition to her solid advice, she offers a unique point of view on the ‘not enough women in tech‘ problem. Now, turning the mic over to Natalie…

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INTERVIEW WITH NATALIE

1. Sponzu has been described as “the first non-cash crowdfunding platform where people contribute a fraction of their time, instead of their money.” What is it that makes Sponzu unique, and can you explain your revenue model?

Sponzu is the only social fundraising platform that does not require people to contribute money. The downside of most crowdfunding platforms is that people are asked to give cash. It creates a barrier for those who are not able to do so, or to whom a $5 minimum contribution is a significant amount. Further, when people give cash, they only support a selected few projects; again due to financial limitations.

Sponzu offers people a choice.

Ideas can be funded by either small cash donations (under $1) using micropayment technology developed by our partner, TinyPass, or by social actions, such as watching video ads and answering short marketing surveys.
Our revenue comes from a number of sources. First, we charge advertisers an administration fee – which buys them a nice marketing report at the end of each campaign. This allows us NOT to retain any money from the funds raised by projects. Second, we charge a small fee for every TinyPass transaction. In the future, our revenue plans include a Sponzu API, mobile application, and market data analysis.

2. You have noted before that “many small ideas that could have a life changing impact, never get implemented”. How would you describe the ideal customer(s) of Sponzu, and what’s the best way they can get involved in your platform?

I believe that it is relatively easy to get funding for something grand and expensive. It is almost impossible to raise money for small projects because those who have the money don’t always understand the significance of small, grassroots initiatives and their impact on our world.

Our goal at Sponzu is to serve this niche and to help individuals, small organizations, and communities realize their ideas and make a difference.

Sponzu idea owners are often individuals looking to make a small difference in their communities. For example, one user is raising money on Sponzu to buy books for her son’s kindergarten class. We also welcome small to medium size non-for-profit organizations looking for creative ways to get funding (see an example here).

The process of joining Sponzu is very simple. Users fill out a short form that describes their initiative and indicate the amount they are looking to raise. Once submitted, the application will be reviewed by our staff. If their initiative meets our criteria, they will be approved and promoted on Sponzu.com within 24 hours.

On the other hand, we offer advertisers an opportunity to meet their cause-related marketing goals while receiving significant value on their digital video advertising. Aside from creating viral advertising through social networking interactions and promoting brands as a CSR contributor, Sponzu provides detailed analytics reports highlighting what people think of each video ad and how successful each one has been.

3. I read that in your case, you immigrated to the US from Israel as an 18 year-old with no interest in technology. In fact, you didn’t own a computer and had “heard about the Internet but didn’t even use it”. What sorts of things did you do in order to learn so much about tech and ultimately become the founder of a web startup?

I have to admit that I always was lucky in being at the right place at the right time and meeting the right people. My first employer, Steve Timmerman of SWAT Solutions, took a huge leap of faith by hiring me without any experience and teaching me a great deal about technology, software, and business management.

Another factor that played an important role and helped me advance rather quickly in the corporate world was my determination to make money. I immigrated on my own and did not have much financial support from my family, so I had to make sure that my paycheck covered my bills.

After a couple of years in the workforce I learned the importance of networking and began attending conferences and events that helped me expand my network and also learn about new industry trends. I ended up moving to Boston, where I worked for the Risk Management Foundation of Harvard Medical Institutions, and then to New York where I became the COO of a software development company. This last role was like a real-live executive MBA program that helped me prepare for entrepreneurship.

4. TechCrunch Founder Michael Arrington said that the problem of having ‘too few women in technology’ is because not enough women want to be entrepreneurs. I’ve also read that it starts in elementary school, encouraging girls to pursue science and math. You started from scratch as an 18 year-old immigrant and navigated your way successfully to becoming COO of a technology service provider before your 30th birthday. Looking back on your journey thus far, how do you think we can get more female founders in the world of technology startups?

This may sound controversial, but I do not think that interest in math and/or science is a prerequisite for becoming a successful technology entrepreneur. In fact, often the best technology products are built by those who are not necessarily subject experts, but those who can identify a particular problem and come up with a user-friendly solution. Entrepreneurship requires many diverse skills, and in my opinion the most important ones (such as resilience and determination) cannot be taught in school.

Having said this, I think it is very important to teach kids, boys and girls alike, the importance of self-discovery. We have to allow them to explore and recognize their inner strengths and inclinations on their own, without the constant guidance of adults. Caretakers and educators should be there to simply support this natural process, not force it one way or the other.

Unlike many Gen Y entrepreneurs I did not step on this path right out of college. My journey began with a full-time corporate career; which lead me to gain the necessary knowledge, experience, and – more importantly – confidence to go on my own. Moreover, by the time I became a full-time entrepreneur I was already married and had a child. These are very important milestones that many women are looking to achieve in their lives. In this aspect, it was somewhat easier for me to focus on building a company.

I honestly do not think that there is a recipe for attracting women to the technology sector. It will probably happen naturally overtime, as more and more girls are growing up with technology embedded into their minds from the early ages.

5. While I’m sure it hasn’t always been easy, you’ve been able to balance your career as a serial entrepreneur with being married and raising your 4 year-old daughter in Brooklyn. If you could sit down and chat with some of the women out there who dream of starting their own startup, what advice would you give them before they make the leap?

Marry a good guy! Someone who would support you and help you juggle the many responsibilities you have as a mother, a wife, and an entrepreneur.

Next, be honest about your priorities and never feel bad about your decisions. It is okay to miss an important business meeting in order to take your child to a puppet show. And it is also okay to attend an after-hours networking event while your husband entertains the kid.

Finally, keep a flexible to-do list. Always start your day with the most important items, and if by the end of the day you have stuff that is not done, just move it to the next day.

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[UPDATE]: I should have mentioned when I first wrote the article, this entire interview came about because of Namesake. My first female founder interviewee (“The Milestone Interview“), Brittany Laughlin, recommended I ask the community to recommend other female founders to interview. My upcoming series is a direct result of that. If you want an invite to Namesake, I have plenty so just drop a comment below!

Want to learn more about Natalie’s journey? This is an awesome interview with her about her previous startup, Fincode Solutions.

What do you think will cause more women to breakthrough in technology? If you could offer one piece of feedback about Sponzu to Natalie, what would it be?

  • http://www.kokev.in Kevin Ko

    First of all, AWESOME new layout dude.

    Really liked this line “In fact, often the best technology products are built by those who are not necessarily subject experts, but those who can identify a particular problem and come up with a user-friendly solution. Entrepreneurship requires many diverse skills, and in my opinion the most important ones (such as resilience and determination) cannot be taught in school.”

    I also remember reading about why Google actively tried hiring more female engineers and one of the reasons postulated was that females tend to add very unique insights when it comes to building a product, which can even be extrapolated to building entire companies – as in Sponzu’s interesting approach to crowdfunding.

  • http://www.johnexleyonline.com/ JohnExley

    KEVIN. YESSIR BABY. YESSIR.

    Thanks a lot for the in-depth comment bro. Can’t beat that. Didn’t Matt and PetoVera just blow you away this design? I’ve gotta be honest, being as stylistically particular and picky as I am, I was mega nervous during the process….it was a combo of nervous excitement and anticipation I guess. They hit a grand slam with this. Paolo is the primary designer who did it all…he’s killing it.

    Anyway. On to your comment my man. Natalie’s point on the people who build the best technology products also stuck out to me. It reminds me of the whole issue of “built by genius engineers, for genius engineers”, you know? It’s why I think having a product ‘editor’ as Jack Dorsey talks about is so important. Someone to strip down all the features and identify the most important and simple user-friendly solution. Also seems to be why investors like Mark Suster prefer that aspiring founders work for a startup or start a startup right out of undergrad rather than spending 2-3 more years getting an MBA.

    Experience pays.

    Great point RE Google’s hiring philosophy and tying it into Sponzu. Good stuff. Thanks again for dropping your knowledge in the comments. It’s gonna be pretty soon here that we need a hustle sesh phone call. Or Skype call…depending on #Verizonfail haha.

  • eyesparky

    Seems Kevin beat me to it as that line stood out for me too, along with the importance of enabling self-discovery in the young. Really enjoyable interview. Thanks.

  • http://www.johnexleyonline.com/ JohnExley

    Yeah her perspective is perfect for making that point too ya know? First of all, she came to the US as a young (18 years old) woman with no experience in technology and without her family.

    And as a mother, she understands the importance of enabling the young to discover their passions, etc. Mark again, you are pushing me to hustle harder and harder on here….thanks for the comment and of course I’m pumped you liked the interview! Dedicating a lot of time into all of this ya know? Also, please don’t ever hold back if I publish something sub-par or if you have some helpful criticism. Take care my man, talk soon!