Innovation is alive and kicking! Crowdfunding is going strong! As long as funders keep in mind that they are essentially giving their money away to unproven concepts that offer no guarantees whatsoever, this continues to be an exciting facet of product development. Every time I worry there might be a backlash against the latest failed initiative, along comes something reinvigorating.
Yesterday the Tile App raised 13406% (yes I wrote that correctly!) of its crowdfunding goal, using an open-source platform developed by a company rejected by Kickstarter.
OK. Let’s stop there and review:
Kickstarter and Indiegogo are probably the two best-known crowdfunding sites. Conventional wisdom would suggest that if you are trying to fund your latest invention, you strive to secure Angel investment, VC funding, or a place for your fundraising campaign on one of these sites. Otherwise, you risk wallowing in the shadows of conceptual anonymity. Kickstarter has done much to validate the concept of crowdfunding, but there exist limitations to the concept, some unforeseen, and some self-imposed. Cameron Robertson and Paul Gerhardt, the co-founders of apigy, a small startup with one product, discovered this when they tried to launch their invention, Lockitron. Kickstarter rejected the product as not conforming to its parameters of eligibility, and many inventors have already reacted to this setback by giving up. However, apigy adopted the age-old formula of “Mountain, Get Out Of My Way”, and promptly developed their own independent crowdfunding campaign and platform, successfully raising in excess of 1000% of their goal in less than 24 hours. The parameters they set for themselves, and communicated to prospective funders, promised a more transparent and accountable productization flow, and Lockitron units began shipping this week.
Stop. Rewind yet again:
So far, we have a company that could not benefit from the emerging model of crowdfunding, as it existed, and therefore opted to secure their own crowdfunding by developing their own platform. Brave and resourceful! Yet why stop there? Once apigy saw how successful their campaign was, they determined that everyone should have the opportunity to tailor-make their own crowdfunding campaign, and thus was born Selfstarter, “an open source starting point for building your own ad-hoc crowdfunding site”.
Tile is billed as “the world’s largest lost and found” and the info video on its funding page (developed using the Selfstarter solution) ably clarifies its value proposition, if perhaps leaving certain gaps unfilled.
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Extant the obvious questions such as “will this drain my phone’s battery”, “can my account be hacked or disabled, in much the same scenario as a car alarm?”, or “what happens if my dog swallows the damn thing?”, this is a compelling innovation, and the swift and overwhelming response from the netizens has underscored this. Is this, however, an anomaly? A unique small square solution in a world of convoluted and half-baked concepts? Not if the Kite Patch has anything to say about it!
A small Riverside CA company recently raised well over 200% of its crowdfunding campaign on Indiegogo, in only 4 days. It’s product? Another small square solution, though addressing a completely different “lost” constituency: the millions who die from malaria and other mosquito-borne diseases.
As I consult to organizations around the world, I am often straining to convince more conventional NPO development officers to rebalance their fundraising resources away from their current 90% foundation/corporate support models, and more toward the massive grassroots funding ecosystem that always swells up when human beings are forced to recognize how close we all really are to one another. Strained and shattered economies are effective if painful unifiers (though admittedly not 100% unifying!), and the success of crowdfunding campaigns, both commercial and NPO, clearly supports my long-espoused belief that individual donors, sponsors, and funders represent a far more powerful ecosystem of fiscal support than previously believed, and the tools developed by Kickstarter, Indiegogo, and now Selfstarter are greatly facilitating the connection between a given product or solution and its prospective supporters. Indeed, while the economy may be strengthening somewhat in certain parts of the globe, the infrastructure established by these sites and tools does not seem to be dissolving, as it may have in the past, but rather is strengthening and expanding. There will undoubtedly be hiccups and disappointments along the way, be it for the developers or the backers, or both. The opportunities far outweigh the challenges, however, IMHO, and I am excited to see what comes next, and interested to see how the VC and brand sponsorship communities manage to accommodate and adapt to this model.