Archive | November 2014

Crowdfunding Resources Are Not Stores


There has been a lot of criticism of crowdfunding resources like Kickstarter and Indiegogo. I’ve noticed that a lot of it is either out of context or born in great expectation. I doubt that the majority really understands what it actually is or has an appropriate way of approaching it.

I guess it is as much of a democratic free market system as I have ever seen. It allows the public to fund projects in a grass roots manor. There are no banks, finance companies or venture capitalists because the patrons fill that position. That is what one is doing when investing in the projects. It’s not a place where one can go browse products in pre-production. It’s not a place for passive consumers. It is a place for those who are prepared to manage the intrinsic risk associated with funding.

This risk can be mitigated to some degree through involvement. There should be discourse between the project leaders and patrons. There should be negotiations and the embedded resources to aid in it. There should be transparency and updates on the status of the project. There should be involvement in all of these with the patrons. This “shut up and take my money” attitude toward interesting projects isn’t mature enough to fit the bill for crowdfunding.

It is that which has led to intervention by third party companies like Patreon. There will always be risk even in the best of immediate circumstances. Life just happens.

Approaching funding with layers of caution is always a good idea. If you don’t have enough information about the project to attempt an initial assessment then contact the project leaders and make them aware of the issue. If the attempt fails… move on. If the project leaders aren’t available for negotiation or lack transparency… move on. Any show of lack of ability to ship is a red flag that should be taken seriously. It will require work. It’s not the common market or place of trade. You are the bank. You are the finance company. You are the venture capitalist. This is the perception needed to approach it adequately.

Crowdsourcing and crowdfunding both are works in progress. These are not well established systems by any means. They require development. They require your involvement, testing and solutions in order to become viable distribution systems. You can be a part of the evolution of new economic paradigms by being an active participant in the crowd. If you are not willing to put that effort in, then don’t get involved in crowdfunding. You’ll just wind up at a loss and frustrated.