When starting a small business or launching an idea, the biggest hurdle is often obtaining the seed money necessary to get the venture off the ground. One often has to rely on the depths of their own pockets, generous relatives, or the goodwill of a loaded investor. The Internet and the advent of crowdfunding offers an alternative that promises to turn this model on its head. Individuals around the world are able to make affordable contributions to projects that they feel a personal connection to or would like to see come into fruition for one reason or another. Some donate as little as ten bucks, while others donate thousands of dollars, creating a system of investment that is readily reminiscent of the creation of Linux or other open-sourced projects.
In order to develop this travelogue on crowdfunding, we have each chosen a particular website that will serve as our individual “case study” for the duration of the project. Using a set of predetermined methods, we will each accumulate data on our selected site, and then compile our findings, comparing and contrasting in order to shed some light on this online phenomenon.
We have obtained our pickings from a list of what are believed to be some of the most successful crowdfunding sites in the online community today, which was posted on this blog. Our selections are as follows:
The site identifies itself as “the largest funding platform for creative projects in the world,” which certainly seems true given the accolades and attention is has received since its inception. The site features projects from all domains of music, film, art, technology, design, food and publishing. Kickstarter allows innovators to present their ideas to the world in the hopes of making their dreams a reality, while allowing investors to make contributions in a secure manner with their “all or nothing” funding policy.
This site is fundamentally similar to Kickstarter: they charge a base-rate of 8% for those seeking to post their ideas, they operate on an “all or nothing” funding policy, and they feature a diverse array of proposals. However, Rockethub has implemented some interesting gamification applications, including the possibility to adopt the monikers “creatives” and “fuelers” who can both earn badges based on their participation. We’d like to see how this gamer framework affects success rates in comparison to other similar web services.
This site takes an interesting approach based on open sourced projects that are managed by members throughout all stages of development. After someone posts the idea, the community discusses and refines it to present to specialist that will estimate the cost and timeframe of the project. After accumulating a certain number of projects, the specialists then present them to the bidders, who then vote on and fund the project of their selection. With so many checkpoints and spheres of influence, we hope to see how this fluid model compares to the more traditional sites that are more individually based, and utilize the “all or nothing” method.
This site allows product designers to submit ideas to the community, receive feedback, and then produce the item using funds from ‘social sales’, which are essentially pre-sales that allow the designer to meet manufacturing minimums or economies of scale. Quirky differentiates itself from other crowdsourcing platforms through its specificity of project type, its process for community driven product development, and its link to sales rather than shares or donations.
Some topics and questions we would like to explore are:
-What types of projects make it to completion? Many of this websites utilize an “all or nothing” method, so if the proposed project is not able to aggregate the total amount of the funds, none of the pledged money gets collected.
-What are the methods these websites are using to select the projects they feature on their sites? Is there a certain set of criteria in use when picking projects; are there any thematic trends that emerge upon closer inspection?
-How are these sites evidence of the shifting notions of “network”? Assuming that the vast majority of monetary interactions that are taking place on these are between virtual strangers, what is it that motivates a contributor to fund a cause/project–is it mostly an act of financial investment or are there greater personal dynamics at stake?
(Andrew J, Andrew R, Daniel, and Marisa)