Crowdfunding platform KissKissBankBank launches their next product, HelloMerci, for not-so micro loans

Crowdfunding platform KissKissBankBank launches their next product, HelloMerci, for not-so micro loans
Finance site screengrab
KissKissBankBank has long been a success story of the French startup world – its crowdfunding platform for creative projects is doing well, and their business model is working well for them – revenue from the projects themselves (they keep a percentage), plus sponsorship.

When we spoke to them for the first time, CEO Vincent Ricordeau already hinted about launching several future products around crowdfunding. This is their second platform, and the third one is on the horizon.

So – what is HelloMerci?

Let’s start by looking at KissKissBankBank. Why does crowdfunding work? There’s very little financial incentive in putting money into a stranger’s project, after all. But that’s not how it works – actually, almost all funding comes from friends, family, and friends of friends. Their payback is not financial, but emotional – they see someone they care about succeed in doing a project. Vincent calls that ‘Emotional Return on Investment’, and it’s a very powerful incentive. It’s what powers their current platform. But that’s also a limitation – this kind of incentive only works if you know the person who you’re funding, and it works best with creative projects – so in a way, it’s a niche.

HelloMerci is about personal projects. Examples are getting your driving license, vacations, training, and businesses. It’s strictly a loan system, with zero interest, and an upper limit of €15000. This makes it very different from their first product, but the potential is huge – think of the market size of personal projects.

When asked about the driving principle behind crowdfunding, Vincent talks about the desire in all of us to be part of creation, how it makes us feel good, and also gives us a feeling of power. He calls it the divine instinct – so basically we all get to feel like god when we use his websites! But the psychological principle he speaks of is real, and proven.

Vincent likes to call crowdfunding the “bank of collaborative consumption”, and as such a cornerstone of the sharing economy. This bodes well for the future, as he sees the sharing economy take a bigger and bigger place in society, because younger people have a very deep desire to share, and we’re only starting to tap the potential of that.

The third platform, which has no name yet, is planned for 2014. It will be a proper crowfunding equity platform, and as such, is still waiting for legislation to make it easier.