Tilting With the Crowd

For those of you who don’t yet know this about me, I am a basketball fanatic.  Twice a week for the past 10 or so years, I’ve organized a basketball game at Stanford.  At the end of the year each year, I ask the participants to chip in so we can buy gifts for the Stanford folks who provide the logistics that enable us to play.  And truth be told, this has been a pain-in-the-butt every year: asking people to pay, keeping track of who paid, reminding folks who haven’t yet paid. Invariably, I end up covering the shortfall from people who neglect to pay (and to make myself feel better, I stop passing the ball to them for a while as a result!).  But a while back, I realized that the shortfall wasn’t because of the monetary cost—it was because the manual process is inconvenient for all parties involved.

This experience is one of the reasons why Crowdtilt resonates so strongly with me.  It’s a simple concept, with powerful potential.

Now crowdfunding is not a unique idea, but we found Crowdtilt to have a unique approach: They are building a horizontal platform that can be used by groups for virtually any kind of fundraising.  The type of campaigns ranges widely and include day-to-day things like funding a tailgate before the football game, chipping in to buy a wedding gift, collecting for a fantasy football league or paying for concerts tickets.  But the company is also hosting campaigns that strongly reinforce the potential breadth and impact of the uniquely simple and effective Crowdtilt platform:

  • Residents of the town of Edwardsville, Illinois, helped keep the Once-Upon-A-Toy toy store open by raising $82,450—more than the $75,000 the business needed to stave off liquidation—in only two days.
  • Parents at the Weilenmann School of Discovery in Park City, Utah, raised $36,478.56 to keep the science program at the Lower School in just about a week.
  • Students at Vanderbilt University in Nashville, Tennessee, along with a few good Samaritans, raised $10,331.30 in less than 24 hours to enable their classmate Ayodele Sonupe to make a $10,000 tuition payment and continue his education in the States instead of having to return to his native Nigeria.

At a16z, there are a couple of key characteristics that we love to see in a founding team.  One is what we call “product/founder fit”—where the business is the obvious calling of the founder, so much so that we have a hard time imagining anyone else doing it.  We found James to be a poster child for this.  James studied development economics at Wake Forest due to his passion for the role that microfinance and micro-insurance could play in alleviating poverty in the developing world.  While in school, he received a research grant from Wake Forest and the Atlantic Coast Conference that enabled him to get on-the-ground experience in this area in post-conflict regions of Africa.  Upon graduation, he opted to move to South Africa and took a job as a loan officer at the Kuyasa Fund, where his job literally was knocking on doors to collect microloan repayments.  While there, he started a microfinancing blog and news aggregator called MiFi Report, which over time became the number one result for microfinance news on Google.  He eventually got the idea to apply his love of technology to his love of international development and morphed his blog into a poverty alleviation-focused, crowdfunding platform called Dvelo.org.  Unfortunately, regulatory changes following the banking crisis of 2009-2010 made that original business untenable and he had to shut it down.  He quickly returned to the States and started another crowdfunding platform with co-founder Khaled Hussein, this one with an eye towards helping any group collect money for anything.

Another key founder characteristic that we value very highly is determination, and Khaled is a poster child for this.  He grew up in Alexandria, Egypt, and first saw a computer in his senior year of high school when he was 18 years old—and he went nuts!  He started an offshore development company in Egypt before coming to the United States.  Within just five years, he earned a M.S. degree from Virginia Tech in Computer Science and Human Computer Interaction and entered their Ph.D. program.  He then put his education on hold to join a startup called Webmail.us that was sold to Rackspace—where he would later help lead their corporate strategy at the age of 26.  After Khaled was introduced to James, he joined him quickly to found Crowdtilt (James can be very convincing).

A third characteristic we hold dear is a big vision.  And the Crowdtilt that James and Khaled envision is massive.  Better yet, they can make you believers within just a few minutes!

We have come to share their belief that Crowdtilt has almost unlimited potential.  There are tons of places where groups and money interact in a fragmented and disconnected mix of both online and offline ways.  The Crowdtilt team recognized this, and earlier than most startups, built and released an API that allows other online services to take advantage of their collaborative payments engine.  And their small team has only scratched the surface of extending the Crowdtilt experience.  Imagine that you’re on a site where you’re planning a trip, and you’re able to to book your vacation rental with the four other friends going on the trip.  Or imagine that you’re viewing a wedding registry, and you and other guests can collaborate on purchasing an expensive item for the bride and groom.  It’s collaborative payments for an increasingly collaborative Web and world.

The company is off to a great start.  They are growing rapidly and building a killer team.  Their metrics are “way up-and-to-the right”, they are in the process of working with a number of online businesses to debut collaborative payments to their sites, and TechCrunch named them one of the five best startups of 2012.

We are thrilled to be supporting the efforts of James, Khaled and the team.  And I personally look forward to deploying Crowdtilt to collect the gift money for my hoops games.  Hey, maybe I could even use it to collaboratively fund the combined tuition payments of my twins as they enter college!  I wouldn’t be the first to use the young service in this way.

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