Jolla: the power of the crowd
Reward-based crowdfunding used to fund a product, test demand and build an international customer base at once.
- Sector
- Mobile technology
- Source
- Digital Entrepreneurship case collection, chapter by Lynn and Rosati (2021)
The case in brief
When Nokia dropped the MeeGo mobile operating system in favour of Windows Phone 7, the switch contributed to nearly 24,000 job losses. Nokia’s Bridge programme offered ex-employees up to €25,000 each in seed funding for new start-ups. A group of former Nokia employees founded Jolla to develop the system further as Sailfish OS.
Jolla planned to license Sailfish OS to phone makers but decided it had to build its own phone, which launched in November 2013 to lukewarm reviews. To fund and market a tablet, it launched an Indiegogo campaign on 19 November 2014, offering the first thousand contributors a tablet for US$189 and asking the community which features it wanted.
The campaign beat its target within hours. Jolla then added community-chosen stretch goals, and the chairman described crowdfunding as a way both to launch a product and to test demand in advance.
Key facts
- Campaign target
- US$380,000
- Time to reach target
- Two hours
- Raised in the first 24 hours
- US$1 million
- Raised by campaign end (10 December 2014)
- Over US$1.8 million from over 13,000 contributors in 21 days
- Including post-campaign contributions
- Over US$2.5 million from 21,633 contributors
- Countries where the campaign was available
- All EU countries, Norway, Switzerland, USA, India, China, Hong Kong, Russia
Analysis through module theory
Crowdfunding types (Week 9)
Backers received a product (the tablet) rather than shares, interest or nothing in return, so this is reward-based crowdfunding, not equity, donation or loan crowdfunding. Indiegogo is one of the platforms listed in Week 9.
Digital internationalisation (Week 12)
The campaign reached buyers in many countries at once with no physical presence, which is virtual presence in practice. It also built what the case calls an international customer base in less than a month.
Entrepreneurial marketing (Week 10)
Asking backers to choose stretch goals turned customers into co-developers and promoters, an innovative promotion technique you can adapt for the Individual Report’s marketing section.
Discussion questions
- 1.Why is Jolla’s campaign reward-based rather than equity crowdfunding?
- 2.Besides money, what did Jolla gain from crowdfunding?
- 3.What would you need to prepare before using crowdfunding to fund your own Individual Report expansion?
Takeaways
- Crowdfunding can raise money, test demand and market the product at the same time.
- A community that helps shape the product will also promote it.
- An online campaign can reach many countries on day one.