Monetizing the marginalized

February 28, 2012

Five years ago, Ron Paul’s popularity was still surprising. Sometime in 2007, the former physician, longtime crank in Congress, and thoroughly fringe Republican had somehow turned his shtick into success — at least monetarily. Paul raised more than $31 million in the 2008 Republican primary even though he never actually won a contest where actual delegates were at stake. For a longshot like Paul, it wasn’t the chance of his success that drove people to donate; on the contrary, all but the deluded knew he would fail.

Now, in 2012, the idea of his success among the fringe is mainstream. And Paul’s alchemy — turning derision into dollars — isn’t exclusive to his corner of the fringe. The powers that be — politics, media, Corporate America — have refused to embrace causes from Occupy Wall Street to Elizabeth Warren. And yet these underdogs still find a way to succeed because marginalization has become incredibly lucrative. How else to explain the $150 million that the DIY funding site Kickstarter is expected to help raise this year, even though many of the projects it funds will do no better than Ron Paul?

As always, credit the Internet. Since the earliest days of altnet message boards, we’ve known the Web can build just as well as it can destroy. Its vastness allows for connections both obscure and passionate, while its anonymity creates hate both entropic and cowardly. This new economy of the marginalized is the child of the first dynamic — the one that can rally thousands to a cause with the smallest of sparks.

In the past, the spark has been all that was necessary, especially in politics. Remember when Joe Wilson yelled “You Lie!” to President Obama at the State of the Union in 2009? Until then Wilson had been a meek Republican congressman best known for his determination to support Strom Thurmond and keep the Confederate flag flying at the South Carolina statehouse. The media made him into a symbol of all that was wrong with Washington. Just as quickly, supporters made him — or his campaign war chest — rich. He raised $2 million in the week after the State of the Union. The Washington Post dubbed it, and every other controversial sound bite that takes on a life of its own, a moneyblurt.

But this most recent crop of marginalized parties is taking part in a more nuanced process than Wilson. These parties have used more than just controversy to raise money. They’ve used the promise of reversal.

Clay Shirky, the author-thinker-smart guy who spends more time pondering the Internet than you do surfing it, told me it takes two things for a mass, financial mobilization: coordination and leverage. On the Internet, plenty of groups can gather en masse. But they won’t be moved to act, let alone donate, unless they think their support is actually going to do something. Shirky points out, for example, that there are plenty of people who want to legalize marijuana, but all their efforts have been focused on changing state law. They know there’s no use pouring their money into a national campaign if the White House isn’t going to acknowledge their issue.

To see how that works, examine the recent Komen foundation controversy. In January, Komen announced that it was no longer going to help fund Planned Parenthood’s breast exam program because Planned Parenthood was under investigation in Florida for misusing abortion funds. Suddenly marginalized as a subversive non-profit intent on destroying America’s unborn children, Planned Parenthood was forced to look elsewhere for the $680,000 that Komen was expected to provide. It did so loudly — too loudly for Komen’s taste. “Why are they going nuts?”asked Komen board member John Raffaelli, who told the New York Times: “The answer is that they want to raise money, and they’re doing it at the expense of a humanitarian organization that shares their goals and has given them millions of dollars over the years.”

Soon enough, Planned Parenthood had recouped more than it had lost. Through individual donations it raised $3 million in the three days following Komen’s action. (It was helped by a $250,000 gift from Michael Bloomberg.)

But something interesting happened while Planned Parenthood was on its way to its $3 million. Komen was pushed to the margins as well. Just as Planned Parenthood was depicted as an arm of the fringe left, Komen was said to be willing to risk lives for the sake of ideological purity. Komen was the villain, not Planned Parenthood. And just as Planned Parenthood had learned, villainy pays. The Komen foundation raised $1 million in 24 hours during the spat.

“It’s a reversal of Tip O’Neill,” Shirky says. “All politics is now national.” Take, for example, Elizabeth Warren. Marginalized by Congress, her Senate campaign raised $5.7 million in the last three months of 2011, 61.3 percent of which came from outside Massachusetts, the state she’s running in. Or look at Occupy Wall Street: scoffed at for being a ragtag group of homeless kids — but a group that has raised $700,000 since Oct. 1.

There is a specific cue involved in all of these fundraising drives, whether they’re organized or ad hoc, explicit or tacit. It comes right about the time a threat goes from generalized to existential, when supporters of a place like Planned Parenthood realize they have more than opponents — they have enemies. Just ask Elizabeth Warren’s supporters what they consider congressional Republicans.

A do-or-die ethos fuels Kickstarter, the online market of creative projects in need of funding. Kickstarter is a bazaar of ideas that no corporation wants to risk funding, which means it’s a bazaar of ideas ready to be funded by the masses. “Of all the products launched on Kickstarter, very, very few would be a good investment,” Yancey Strickler, Kickstarter’s CEO told me. “However, if the bar is lower — to simply, do I want this to exist? — suddenly over half the things have a life.”

On the day I spoke to Strickler a few weeks ago, Kickstarter had just seen two projects raise $1 million for the first time. An artisan iPhone dock ($1.46 million pledged) and a retro-chic videogame ($2.26 million pledged) have each found a community to support them so a big investor doesn’t have to. In his solicitation video, Tim Schafer, one of the videogame’s creators, said he was turning to Kickstarter because, “If I were to go to a publisher right now and pitch an adventure game, they’d laugh in my face.”

A $2 million-plus stake tends to make people take you pretty seriously. As Strickler told me: “Maybe our notion of what mainstream is is outdated.” Maybe the new mainstream can be found in the margins.

PHOTO: Illustration by Chadwick Matlin


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The ability of the powerful to suppress and intimidate the weak has decreased dramatically since the internet has come into being. This is one of the primary reasons Government all over the world tries to throttle it.

The ability of people to find others of like mind without being beaten senseless by a police baton and arrested is the true cause of the “Arab Spring” and the “Ron Paul Spring” in the USA. The enemies of freedom have always gone after dissidents (or in your term, “cranks”) who did not bow to power. Franklin had an unregulated printing press and now the world has the internet. Lookout orthodox lackeys!

Posted by txgadfly | Report as abusive

With respect to music, the margins have sounded better than the mainstream for a decades.

Posted by TobyONottoby | Report as abusive

I’m not sure that the ability to donate a few dollars to some “longtime crank in Congress” or to some quasi-charity has improved the conditions of the “marginalized”.

Far more likely, the internet has become yet another device to fleece the unwary by making them think their opinion (and money) matters.

Posted by Gordon2352 | Report as abusive