ImaginativePRO Blog

HOW TO BUILD A CROWDFUNDING COMMUNITY TO SUCCESSFULLY FUND YOUR CROWDFUND CAMPAIGN AND SERVE AS BRAND ADVOCATES

In today’s economy, many people are launching new businesses, services and products with the help of crowdfunding platforms like Kickstarter, Indiegogo and even Patron. When using these platforms, community building for crowdfunding is essential; obviously, a big userbase means more funding and a higher chance of success.

But crowdfunding community other benefits, too. Your community can:

• Advocate your brand, business and products to their networks
• Provide a base for future marketing
• Provide a base for future crowdfunding

With so many benefits to cultivating a crowdfunding community, you’ll want to be prepared before launching a campaign.

PREPARING THE FOUNDATION OF CROWDFUNDING COMMUNITIES

Keep Focus on the Community

Your pitch shouldn’t just “sell” your brand, product or service to prospective investors and customers. It should do that while focusing on user benefit. You want to create a community to fund your venture, so deliver a bold vision of what the world could be—and how your community will play a role in bringing it about.

Basically, you don’t want to just focus on self-promotion. What’s in it for the user? Once you’ve established a vision, you can target like-minded users in your community building for crowdfunding efforts. Your pitch might also include suggested tweets, memes and content that funders can share to their own networks to further spread the message.

Identify Key Community Members when Building Your Online Community

Before you launch your campaign, you must lay the foundation for your community by identifying key community members. These individuals will support and boost your campaign from day one, ensuring it gets off to a healthy start. As far as community-building goes, they will be the first advocates to invite others in. Your friends, family and colleagues are good starting points. Consider giving them a list of goals and actions so they know how and where to support. These might be:

• A quota on users to engage per day, online or off
• On-brand community hashtags to use
• A quote on posts per social network promoting the campaign
• A list of key dates with their amount goals

In addition to this first-level network, you’ll want to seek out key stakeholders, notable investors and community leaders. Essentially, these are influencers you’ll want to enlist who can support your campaign and share it with their communities. You’ll want a small handful of these—about two to four—and they should also be on-board before your campaign launch.

By assembling this initial community, your campaign can start off with a bang. Having a substantial amount of money pledged from the beginning increases your optics; you’ll also have a dedicated team that will help community building for crowdfunding as they spread the word.

If your business has an established community already, you might lead up to the campaign with teases of exciting news. This builds enthusiasm so you can leverage the community for funding.

Online Communities for Crowdfunding Should Strike a Real Connection

Building crowdfunding communities is about forming relationships. Therefore, your campaign rewards should give supporters a tangible sense of playing a role in the brand or community. Media companies, for example, often offer producer credits to their supporters.

You might even allow backers to become a part of the production’s process. For example, a game company might offer a reward in which a supporter can design a character. A business might arrange for a supporter tier to meet the team or tour the company. Think of how you can truly involve your community—don’t just offer cool gifts, products or tokens of appreciation.

Using Social Media for Building Your Online Community

Choose a handful of social networks you’ll spread your campaign and message on. Once you’ve done this, tailor your message to those networks. For example, LinkedIn skews more professional within certain industries; Twitter, meanwhile, favors brevity and big thinking.

CROWDFUNDING COMMUNITIES DURING AND AFTER THE CAMPAIGN

Host an Event to Launch Communities for Crowdfunding

Events are a great way to build enthusiasm, expand your reach and grow your community. At your campaign’s launch, or throughout the campaign, host an event online or at a venue to attract attention. These events are celebratory and make your campaign more memorable. Seeing others in-person can encourage your supporters to put their money where their mouth is—and give your campaign public validation.

Push news of events and invites to your social channels and existing online communities. You might also consider a calendar of events and content which you can post. For example, try an “ask me anything” on Reddit half-way through the campaign to drive community engagement and address prospective backers’ concerns.

Stretch goals also provide an opportunity to engage your community. Tap into the userbase to ask for ideas they’d like as stretch goals. Provide incentives for backers to share the campaign with their friends to further keep them invested and expand your reach.

Stay Communicative & Show Appreciation for Your Crowdfunding Communities

Always be communicative! Don’t leave your community in the dark; keep them in-the-know every step through the process. Otherwise, you risk betraying their trust. Crowdfunding platforms commonly offer a blog where you can make announcements and show progress, but you should do this on social media and your website as well.

Finally, show appreciation for your online communities. This humanizes your brand with the community, but also provides an opportunity to strengthen your message. Highlight messages from community members, write about who inspires you or your idea, or share a heartfelt story about who helped you get where you are today. Whatever you do, bring it back to your campaign’s original vision and community’s shared values.

Keep Your Community Inviting

Finally, don’t forget to use comment moderation to make your community as inviting as possible. With a tool like Smart Moderation, you can unify comments across all your social platforms. You can also automatically moderate comments in accordance to your brand’s moderation approach.

With automated moderation, you can keep your community free from trolls, spam and abuse around the clock. Having such a system in place lets you respond more quickly to engagement. Because it’s important that you answer essential questions and respond to criticisms to gain support, you’ll need comment moderation to increase your focus on converting users.

COMMENTARY:   I have stated in previous posts about crowdfunding that one of the most important steps required for a successful crowdfunding campaign is developing a crowdfunding community or crowd.  Your crowd should consist of loyal supporters who have bought into your crowdfunding offering and are likely to serve as brand advocates who will spread the word concerning your crowdfunding campaign. 

It is vitally important that you develop a network of loyal supporters who love your product or invention and believe in your vision of the future.  This must be done early (four-to-six months) before you launch your crowdfunding campaign.  Remember, you may have a great product or invention, but without a crowd you are setting yourself up for failure.  I created a self-running slideshow about reward-based crowdfunding listed below.  You may enlarge or stop the slideshow at any time by clicking the screen.

Courtesy of an article dated January 30, 2018 appearing in Smart Moderation

EQUITY CROWDFUNDING SIMPLIFIED -- RAISING STARTUP CAPITAL ONLINE

 

Equity Crowdfunding is an alternative form of startup capital that lets you raise funds from the public in exchange for unlisted shares (equity) in the business. Unlisted shares aren't listed or bought or sold on an official public stock exchange, but sold online through an equity crowdfunding portal that has been approved by the SEC (FINRA).  An alternative to giving investors shares is to offer them a convertible note.

Enacted on April 5, 2012, the Jumpstart Our Business Startups (JOBS) Act created the United States' equity crowdfunding industry. At first, only accredited investors were allowed to invest. By June 2015, another part of the JOBS Act, Title IV (Regulation A+), went into effect.

In 2015, the SEC adopted Regulation Crowdfunding to implement the requirements of Title III which permitted eligible companies to raise capital using Regulation Crowdfunding beginning May 16, 2016.

Investing through equity crowdfunding can give the investor a greater degree of personal satisfaction than investing in a blue-chip or large-cap company. Equity crowdfunding may offer more avenues for such targeted investments than publicly traded companies.

For those of you seeking investors for your startup, consider alternative financing sources like equity crowdfunding.  Please review Equity Crowdfunding Simplified, my newest e-book targeting startup founders, that explains what equity crowdfunding is, how it works, legal requirements, filing requirements, classes of investors, investor rules, advertising limitations, pro's and con's, tips for launching a successful equity crowdfunding campaign and much more.  

 

Courtesy of a YouTube video titled, "Equity Crowdfunding Simplified" by Tommy Toy, ImaginativePRO

NEXTBIT'S SLEEK NEW ROBIN SMARTPHONE UTILIZES CLOUD STORAGE TO SOLVE INTERNAL STORAGE LIMITATIONS

The smartphone space is quite cluttered right now. It might not seem like it in major markets, since Apple and Samsung dominate the smartphone industry, but there are dozens of companies around the world fighting for space in consumers’ pockets. Different companies use different strategies to try to separate their products from the pack, but by and large, most companies hit the same notes. Since Samsung and Apple dominate the high end, other companies compete on price.

Nextbit Robin cloud-based smartphone (Click Image To Enlarge)

Interestingly, no smaller smartphone makers have made a real effort to break through by addressing one of smartphone users’ top pain points in a new and creative way… until now.

Meet Nextbit and its first new smartphone, the Robin, which features a delightfully unique design along with smart, innovative software at a very affordable price point.

Beginning with the scrappy startup behind the Robin, Nextbit was founded by a number of big names in the mobile space. CEO Tom Moss was formerly an executive on the Android team at Google, and he’s also a founding board member at Cyanogen. CTO Mike Chan worked as an engineer on Google’s Android team and then spent time at Motorola, and chief design and product officer Scott Croyle is the well-known name behind HTC’s One M7 and M8.

The company was founded in 2013 and counts Google Ventures and Accel Partners among its investors.

Nextbit has been buzzing over the past few months and we all knew something fun was coming, but I’m not sure anyone expected the Robin. This sleek but unassuming smartphone isn’t an iPhone killer or a Galaxy killer, and it won’t kill any other smartphones on the market. Instead, it’s a problem killer, and it has its sights set on what is constantly listed near the top of smartphone users’ chief complaints with their phones: Storage space.

How many times have you gone to capture a video on your iPhone or Android phone and seen that dreaded storage full message? How many times have you tried to transfer new movies or music to your phone ahead of a trip and had to clear out space before you were able to?

Most of us have run into issues with free storage on our phones, and that’s why storage is consistently listed along with battery life as a top complaint in studies that look to determine users’ biggest problems with their phones.

Using some cloud-based software wizardry, the Robin solves the problem of storage in a brilliantly simple way. Well, it’s simple for the end user, but it’s a wonderfully complex engineering feat behind the scenes.

Nextbit calls the Android-based Robin the word’s only “cloud-first” smartphone, and that’s an accurate description. The handset ships with 32GB of internal storage, but that memory is completely dynamic and is supported by an additional 100GB of cloud storage.

Here’s how it works: you have apps, movies, music, photos, videos and all sorts of other files on your phone, but you don’t ever need to access all of that data at once. So, when your phone is nearing its 32GB local limit, the Robin begins intelligently deleting apps and files from your device to make room for new data.

But “deleted” isn’t the right word. Everything pushed off of your device is backed up to the cloud, complete with all user data and settings. So, for example, if the Robin removes Angry Birds from your phone to clear space as you capture some video at your daughter’s soccer game, you can pull it back down from the cloud on demand and you’ll be able to pick things up right where you left off.

The Robin also learns as you use it, so apps and files you use often will be kept on the device, while other items you rarely use will be the first to be kicked off to the cloud when you need more storage.

This smart solution effectively allows Robin owners to forget about storage space and just… use their phones. And in a meeting ahead of the phone’s debut, Nextbit was careful to point out a number of times that the magic behind this innovative cloud solution was designed with data caps in mind.

Data is used as sparingly as possible, and Wi-Fi is favored heavily by Nextbit’s software. Since the handset backs up data frequently while connected to Wi-Fi, it can delete unchanged apps, videos or photos on the fly without having to back them up on the spot when a Wi-Fi network isn’t available. That said, it is not yet clear exactly how much cellular data Nextbit’s solution will use in practice.

Now, for the bad news: you can’t buy a Robin yet. The phone is slated for launch in the first quarter of 2016, but preorders went live on Kickstarter beginning September 1. The first 1,000 Robins will be made available at just $299, and then the phone will be $349 for the duration of Nextbit’s 30-day campaign. When the phone launches early next year, it will cost $399.

I spent time using an early version of the Robin and it’s safe to say I was impressed. The phone is familiar but unique, with a simple design that uses concave circles and color accents to separate itself from the pack. There is also a set of LEDs on the back to let you know when Robin’s cloud magic is working.

Then, the software is unmistakably Android. The Robin I used was running Lollipop, though the launch version may have Marshmallow. In either case, the software has a very “pure Android” look and feel that enthusiastic Android fans will love.

The Robin’s key specs can be found in the graphic below.

Nextbit Robin smartphone specifications (Click Image To Enlarge)

More information can be found on Nextbit’s Kickstarter page.

COMMENTARY:   With only three days to raise donations via Kickstarter,   With only three days to go, Nextbit has already received 3,436 pledges totally $1,286,766.  This is well in excess of its goal of raising $500,000.  Not bad for a young smartphone startup.  

In spite of this successful raise through Kickstarter, and VC investments from Google Ventures and Accell Partners, it is going to be a challenging and very difficult slog for Nextbit to establish itself as a viable alternative to the Apple iPhone and Samsung Galaxy smartphones, who dominate the smartphone market.  

I could be wrong about this, but even at $399 per phone, Nextbit will probably lose money on every phone they make.  Nextbit must capture significant market share to generate economies of scale to get their smartphone production costs sufficiently low enough to generate decent gross profit margins.  However, the sleek and smart design and cloud-based technology of the phones definitely provide a unique value proposition that might attract some buyers to the company.  

Disadvantages of the phone include its minimal display and camera resolutions, but somewhat faster processor speed.  The Robin battery can also more than holds its own against the iPhone 6S and Galaxy S6.

• Display
• Robin:  5.2" IPS 1080p
• iPhone 6S:  4.7" IPS 1334 x 750 - 326ppi
• Samsung Galaxy S6:  5.1" Amoled 2560 x 1440 - 577ppi
• Camera
• Robin:  5MP
• iPhone 6S:  12MP
• Samsung Galaxy S6:  16MP
• Processor
• Robin: Qualcomm Snapdragon 808 64-bit 2.0Ghz quadcore
• iPhone 6S:  64-bit 1.8Ghz dual core
• Samsung Galaxy S6:  64-bit 2.1Ghz octacore       

Courtesy of an article dated September 1, 2015 appearing in BGR and an article dated September 10, 2015 appearing in Gizmag and Qualcomm Series 800 Snapdragon processor comparisons

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7 CROWDFUNDING TIPS FOR SUCCESS ON KICKSTARTER AND HOW CERTAN WORDS AND PHRASES CAN LEAD TO SUCCESS

Crowdfunding has quickly moved from trendy buzzword to a mainstream fundraising model. In less than five years, Kickstarter has attracted more than five million contributors pledging close to $1 billion, funding more than 55,000 individual projects. Rival fundraising platform Indiegogo can boast of a campaign that single-handedly generated $12 million in pledges. Numbers like these make crowdfunding an attractive option for first-time entrepreneurs and established businesses alike. But what, exactly, does it take to successfully fund a project?

To find out, I’ve asked creators of some of the most highly successful crowdfunding technology projects – each raised more than $300,000  -  to discuss their experiences using Kickstarter and Indiegogo, and share the secrets of their success. Whether you’re looking to raise a few thousand, or a few hundred thousand dollars to bring your product to market, here’s some hard-earned wisdom to consider well before launching your own crowdfunding campaign.

1. Solve a real problem

As with any sales venture, the first key to success is creating a product that people want to buy. Advises Adam Sager, whose home security device, Canary, raised more than $1.9 million on Indiegogo.

“Your responsibility is to produce a solution to a problem.  You need to be able to tell people right away how the product is going to solve a real problem that they have.”

If you can’t communicate the essence of your product and what it does in a sentence or two, you’re not going to attract significant interest from backers.

Many entrepreneurs have looked to their own personal experiences in identifying a problem to solve. Peter Dering, an avid traveler and photography buff, came up with the idea for his original Capture Camera Clip – an updated version garnered more than $800,000 on Kickstarter - because he got tired of having his DSLR hang precariously from his neck, swinging into things while backpacking through Asia.  He says.  

“I thought this was a problem enough people had, and that my idea for a product could solve it. Identifying a problem, and designing a solution that is solid, equals success.”

It’s great if your product can ride the wave of an emerging trend, but make sure you’re not too far ahead of the curve.  John Van Den Nieuwenhuizen, whose second version of the Hidden Radio, a wireless portable speaker, has raised more than $500,000 on Kickstarter says. 

“If your idea is too far ahead of its time, you’ll have to spend resources telling people why they need it.  When we came up with the idea for Hidden Radio back in 2008, we didn’t invent the category.  There were Bluetooth speakers already on the market, but they weren’t attractive and didn’t sound good. We felt we could make a beautiful design that had better sound.”

2. Do your homework

The success of any crowdfunding effort is inextricably linked to the amount of hard work you put into testing and refining your idea long before launching the campaign.  Phil Bosua, who raised $1.3 million on Kickstarter to launch the Lifx LED smart bulb says.

“Every hour of planning you do before the campaign saves you 100 hours of work after it.” 

Van Den Nieuwenhuizen’s vision for a portable Bluetooth speaker began with sketches a full five years before his crowdfunding campaign.  He says.

“You need to do your homework.  Once my partner and I had a design we liked, we submitted it to some design blogs. The response was very positive, with people asking how they could buy it, and all we had at that point was a rendering. We made our first prototype with a trip to the hardware store. It took us a year of looking in the U.S. and Asia to find the right manufacturer. But by the time we launched on Kickstarter, we were literally ready to begin production if we got the funds.”

The challenges you’ll face after the funding campaign are daunting and must be addressed early on.  Dering cautions. 

“You’ve got to have an e-commerce site up and running, a supply chain and distribution network, and way to handle fulfillment and warehousing.  Miss any one of these, and you’re dead. You need to be prepared to make your backers happy, and getting as many ducks in a row as you can before starting the campaign, allows you to ship your product to them quickly.”

Seeking advice from those who have more experience is always a wise move. Gabriel Bestard-Ribas, whose Goji smart lock raised more than $300,000 on Indiegogo, did just that.   He recalls.  

“I got advice from people who had run successful campaigns, asking for feedback on my idea.  But I also talked to people who had failed at crowdfunding. I learned what things to avoid, which is important.”

One thing to avoid is waiting for your campaign to start before doing any marketing. “Build your customer database well before going on Kickstarter,” suggests Van Den Nieuwenhuizen. “Even if you don’t have a prototype yet, you can release drawings or renderings on Facebook and Twitter. You get validation of your idea while building an audience and momentum for your crowdfunding launch.”

3. Bring money to the table

Dering says.

“Kickstarter shouldn’t be your first source of money.”

Indeed, every entrepreneur I spoke with for this story had already acquired some capital before launching their crowdfunding campaign.  

Jonas Gyalokay, creator of AIRTAME, a wireless HDMI streaming dongle, raised more than $1.2 million on Indiegogo says.

"Kickstarter shouldn’t be your first source of money.”   

But before that, he and his team had already poured in tens of thousands of dollars into the project.  He says.

“We invested our own money, using loans and pension savings as well as profit from some of our earlier companies, to buy food and pay our bills.  Another company I co-founded invested $10,000 for a 5% stake in AIRTAME. That paid for office space and some of the hardware we needed in an early stage of development.”

Your funding sources don’t have to be complicated. Bosua and his small team started Lifx with, He recalls.  

“$35,000 that came from maxing out our credit cards.” 

Marc Barros is a serial entrepreneur, whose Moment smartphone lens campaign attracted more than $100,000 in just its first 28 hours on Kickstarter.  He notes.  

“We spent about $80,000 to get to the Kickstarter stage, with prototypes, samples, and additional engineering support to help solve our problems.”

For those looking at mass market production, Barros advises,

“You should think about needing $500,000 to get from the idea stage to shipping a final product. Whether you raise that from your backers, investors, or supply partners, that’s about how much you need (with some wiggle room) to make and ship. You’ll encounter mistakes along the way and a little bit of extra cash makes sure you can deliver.”

4. Set a smart funding goal

When setting your funding goal, don’t confuse how much money you’d like to raise with how much you need to fund your project. Dering says of his first campaign. 

“I made a distinction between ‘expectation’ and ‘hope’ when setting my funding goal.  I expected to raise $10,000 but my hope was to be the top-funded project in Kickstarter’s history.” 

The browse pages of both Kickstarter and Indiegogo highlight not just a dollar amount, but your funding’s percentage relative to your initial goal. People love to back a winner, so blowing past your funding goal by 300% in the early days of your campaign can actually help attract additional backers. Of course, you need to set an amount high enough to cover the costs of actually manufacturing and delivering your product, but your goal should be one that you’re confident you can reach.

5. Make an effective pitch

Bestard-Ribas asks.

“Why do people support crowdfunding?  Because they are drawn to a vision. One they want to engage with. Many people think of their campaign as just selling a product. But you’re really launching your company to the world.”

Your presentation will have a huge impact on the success of your campaign. The financial cost of producing it is virtually zero. You can shoot the video pitch on your phone if you need to. But the amount of time and thought you put into this presentation must be significant.

Sager says.   

“We crafted a very focused message, and presented the product to show how it could impact people’s lives in a direct way. We didn’t start by talking about features. Instead we led with how we were solving a problem. It’s also important to make your team visible. Be very transparent and let potential backers know who you are. Trust is a big part of crowdfunding.”

Of course, when it is time to talk about features you need to emphasize what makes your product stand out from the crowd. Bestard-Ribas stresses that there are benefits to having competitors. He says.  

“There were three competing products that debuted before us.  They generated a buzz around the idea of a smart lock, so people understood our product already. What we had to do was propose why we were better. The competing models ranged from plain-looking to ugly. We had a beautiful, sleek design plus the ability to take and send photos of anyone activating the lock and entering your home. So those are the two features we emphasized.”

Rewards/perks are huge calls to action for potential backers. Get creative. Gavin Fish, VP of Sales and Marketing for Light Harmonic, whose campaign for the Geek Pulse, a portable DAC, has raised more than $1.17 million on Indiegogo, has taken full advantage of services unique to that platform. “One of the reasons we switched to Indiegogo for our second campaign was that backers could choose multiple perks.” Fish also made use of Indiegogo’s tracking tools to offer even non-contributors a chance to earn free products by referring friends who did become backers.

6. It’s not (always) about the money

Crowdfunding has several benefits beyond access to capital.   Fish says.  

“We were already well-funded as a company.  And we knew the high-end audio customer well. With the Geek line, we were looking to deliver a mainstream, affordable product, but we didn’t know what the mainstream consumer would buy. For us, the feedback from backers was much more significant than the money we raised. Near the end of our Geek Out campaign, for example, many backers began asking for a larger unit with more features. That feedback led directly to our second product in the lineup, the Geek Pulse.”

Bestard-Ribas also emphasizes the importance of the contributor community.  He says with conviction.  

“The feedback we get is 10-fold more valuable than the money we raised.  Normally, you’re working in the dark until you bring a product to market. With crowdfunding we get customer feedback before the product is finalized.”

And it wasn’t only customers that he was able to build relationships with. “The press coverage that our campaign received opened doors to partnerships,” he continues. “We had retailers and distributors reach out to work with us before the product was finished, which helped us to better fit their needs. Our partnership with Staples is an example. They got in contact with us during the campaign and now our product is part of their [app] ecosystem.”

7. Make the campaign your top priority

Managing an active crowdfunding campaign is an intense process.  Gyalokay says.  

“It’s not only full-time for one person, it’s full-time for everyone in the company.”

Sager agrees and he says in response.   

“When we ran our campaign, the entire team was 100% focused on crowdfunding.  We sent out multiple surveys to our backers. I personally answered 3,000 emails in the first week.”

Although it can be a nearly overwhelming experience, the campaign offers a valuable opportunity to engage with your backers.  Fish says.  

“We believe that if we can have a dialogue with the market, we can be successful.  We decided to host a separate forum for our backers, to continue the conversation beyond the crowdfunding campaigns.”

Dering says.  

“Feedback can drive product design.”

He recalls having to decide between two competing features in a new camera strap that was still in development.    He recalls.  

“We sent out a Kickstarter survey with a choice of A or B, and our backers overwhelmingly picked a winner.”

The challenge with feedback, of course, is knowing when to say no.  Sager cautions about being everything to everybody.  

“You’re going to have to decide which requests make sense to implement with this version of your product and which ones are better to save for version 2.  We made the simplicity of our product the priority and stuck to solving a specific problem instead of trying to meet everyone’s feature request.”

Social media and email can be very effective in spreading the word about your campaign.  Gylokay says.

“We prepared 100 personal emails each to send out when we launched the campaign. We made sure each one was personal and had a good dose of humility, while stating how important this project was to us and our lives. And of course we ended with a strong call to action.”

Sager adds.

“You need to make your campaign as easy to share as possible. That means all someone has to do is click one button. Don’t make it any more complicated than that.”

Heed the advice of these crowdfunding veterans and perhaps your idea will be the next crowdfunding success story.

COMMENTARY:   Kickstarter, the crowdsourced funding platform, is an all-or-nothing proposition. Either your project reaches its funding goal, and you get to work developing your product, or it doesn't and you go home with nothing. So what's the best way to ensure your passion project makes it past the finish line? Pay attention to your pitch.

Researchers at the Georgia Institute of Technology culled the 20,391 most common phrases that appeared in the text of 45,000 Kickstarters to try to decipher what makes the difference between the wild success of a project like the Pebble smart watch, and an abject, nameless failure. Their results "indicate a fundamental force which drives the 'crowd' to fund crowd-projects: language."   In other words, the words you use to describe your project matter, even in very subtle ways.

Some takeaways: Phrases that indicated that backers would receive something in return for their donation had a tendency to get funded. This should be pretty obvious. Gifts: We like them! So phrases like "pledged will," "also receive two" and "mention your"--all indicators of some kind of reward--tended to show up in projects that were funded. A surprisingly good predictor of funding success? The phrase "good karma and." Words like "encouragement,"  "given the chance" and "as people" worked, but offering to dress up as something as a reward (example: "a skype date with us dressed up as celebrities") did not. Nor did overusing phrases that hint at desperation, like "need one" or "provide us."

The researchers believe that these type of findings could be built into the design of a crowdfunding site. They suggest a help center that could guide new users.

Courtesy of an article dated January 24, 2014 appearing in Forbes and an article dated January 16, 2014 appearing in Fast Company Design

STANDDESK: A DESK FOR STANDING OR SITTING THAT PROMOTES BETTER POSTURE, GOOD HEALTH AND COSTS ONE-FOURTH SIMILAR DESKS

Scientific research has shown sitting all day is terrible for your health. (Click Image To Enlarge)

FIX YOUR POSTURE WITHOUT GOING TO THE CHIROPRACTOR BY STANDING AT YOUR DESK.

A standing desk is the centerpiece in the workspace of the future. Scientific research has shown--in myriad ways--that sitting down all day is so bad for you that it can increase your risk of cancer.

The adjustable standing desk allows you to mix up your posture throughout the day, but top models cost as much as $1,600. (Click Image To Enlarge)

Clearly, it’s time to ditch the office chair, but standing desks can get pricey, especially the adjustable kind, which let you mix sitting and standing throughout the day.

On Kickstarter, StandDesk's basic model costs less than $400. (Click Image To Enlarge)

The company has raised more than 10 times its funding goal since April 2014. (Click Image To Enlarge)

StandDesk, a new standing desk model being launched on Kickstarter (where it has raised more than 10 times its target since April), is a cheaper solution. The basic model, which has a simple automated system to raise and lower the desk at the touch of a button, starts at less than $400. Not quite as cheap as a cardboard desk, but not $1,600 either.

 

The creators say the lower price comes from designing a custom motor that doesn’t have as much extra lifting power as other standing desks. It’s only designed to lift 225 pounds--enough to hoist your computer and desk gadgets, though maybe don’t put every textbook you own on it. It’s a clean, simple design with no frills, just a smooth tabletop and a small control panel. Considering that I spend my days curled over my desk in a bizarre yoga pose called, “becoming one with the laptop,” I’m on board.

The desk raises and lowers at the touch of a button. (Click Image To Enlarge)

Clearly, it’s time to ditch the office chair. (Click Image To Enlarge)

Read more here.

COMMENTARY:   Steven Yu, the founder of StandDesk raised a total of $649,244 from 1,697 donors through Kickstarter.  The goal was to raise $50,000, but StandDesk raised over 12 times that.  Congrats to Steven Yu.  The first batch of pre-orders from the Kickstarter campaign are scheduled for delivery sometime in September 2014.    

According to the StandDesk website, you can still pre-order the StandDesk directly from them for $449.00 with FREE shipping.  Delivery in the fourth quarter 2014.  I assumed that these new pre-orders will be after the Kickstarter project donors receive theirs.  

I like what Yu is doing.  Let's just hope that he priced the StandDesk properly so they can generate a profit.  

Courtesy of an article dated May 12, 2014 appearing in Fast Company Design 

THE MOD-T 3-D PRINTER BY FROG VENTURES USES CROWDFUNDING TO RAISE CAPITAL FOR ITS $250 MOD-T 3-D PRINTER

This is the MOD-t. It's a $250 3-D printer, and also the first project of Frog Venture Design. (Click Image To Enlarge)

THE MOD-T 3-D PRINTER IS THE FIRST RELEASE OF FROG VENTURES, THE VENTURE DESIGN ARM OF ONE OF THE WORLD'S MOST PROMINENT DESIGN FIRMS.

Today, a 3-D printer called the New Matter MOD-t hits Indiegogo. It’s expected to cost $250, making it the most affordable 3-D printer to date (comparable printers are in the $350 to $1,300 range). It’s also being billed as one of the simplest 3-D printers: users buy and download designs for chess pieces or kitchen utensils or whatever they want to make in a storefront that crosses the App Store with Etsy. They can then edit these objects--changing size or adding texture--about as easily as adding an Instagram filter. The printer, engineered by inventor Steve Schell, is expected to be built with a third of the parts of its peers, allowing it to reach that $250 price point.

While most 3-D printers require the use of esoteric software, the MOD-t has built its entire experience around usability. (Click Image To Enlarge)

The MOD-t is the first release of Frog Ventures, the venture design* arm of Frog (think venture capital, but with the investment being design rather than money). Frog Ventures backed Schell's startup New Matter to bring the MOD-t to market.

 

Frog is the design consultancy behind some of the most important products in recent history--Apple’s early line of computers, for example. But in recent years, Frog has become less known for physical products. That's in part because the company has developed expertise in software but also because the Fortune 500 companies that hire Frog for product design work are secretive. “We do work for some very very big clients, and those very very big clients are quite proprietary about their relationship with us," Ethan Imboden, head of Frog Ventures, says.

"They're secretive about how they get their innovative product into the market, and they don’t necessarily want our name associated with that. Even as a new employee, I didn’t see the work I’m most excited about until after I joined Frog. I had to pull rank on people and say, ‘This is work I’m allowed to see. I need to take a look into the portfolio.’”

It will have an App-Store-like marketplace, where designs can be purchased, then modified with simple controls like pinching and zooming. (Click Image To Enlarge)

And it's a fine looking machine, as far as 3-D printers go. (Click Image To Enlarge)

This secrecy may sound cool, but the reality is a burden for Frog, creating what Imboden calls “a vacuum of content” as to what Frog is doing. No doubt, it’s one reason that when everyone talks about Frog, they (even we) still talk about Apple.

The project is a bit of a risk for Frog, who generally works in secrecy. (Click Image To Enlarge)

Frog Ventures is the firm’s development studio outside this cone of silence. It’s currently working with three startups--New Matter is the only one that’s public--to make big, showy bets on new products.  Imboden says.  

“We have an excellent opportunity to say, ‘Here’s exactly what we did.' That’s very valuable for us, to put the work out there, be very vocal, and take accountability for it, no matter how it goes.” 

MOD-T 3D printer in action. (Click Image To Enlarge)

Frog’s role in each of these startups may vary. One startup, for instance, has blocked time to embed itself in Frog’s offices to learn to think like Frog designers. In the case of the MOD-t, Frog's role was similar to the one they adopt with their secretive companies. Schell had developed the core MOD-t technology over at the technology incubator Idealab. While 3-D printers have intricate mechanics to float the build plate precisely in 3-D space (basically, moving the printed object around the needle-sized hose of melted plastic ink), the New Matter team had developed what they describe as a “unique mechanical solution” that reduced the clockwork of parts by a third.

But the company is excited to take on the challenge, to fail in public rather than succeed in private. (Click Image To Enlarge)

Schell says.  

“For me personally, that motion system was the breakthrough I needed to say we have a significant advantage.  We could create a 3-D printer at the cost target we’re hoping for.”

Meanwhile, Idealab had been in casual talks with Frog Ventures about new products in their pipeline. The MOD-t caught Frog’s eye.

Imboden says.

“What we’re looking for, and what we see here, is a technological advantage that creates a whole set of opportunities.  And the goal is to tie those opportunities back to the real world and the experience of the end consumer, to make sure the company is living up to its promise, and living up to the full opportunity of the technology they’re embedding.”

Frog's mobile app allows uers to design and resize objects in 3D before they are printed on the MOD-T 3-D printer. (Click Image To Enlarge)

Frog and New Matter co-developed the MOD-t’s experience--the approach of using a marketplace where designers could sell their products the way software developers sell apps--and a team of roughly 12 from Frog built out much of the product. They polished the industrial design (the mechanics and the aesthetic). They created mockups of the digital app and marketplace. And they built the MOD-t brand itself--right down to shooting the Indiegogo video.

Now, all New Matter and Frog can do is wait. Truth be told, it’s hard to imaging the MOD-t being anything but a monstrous hit in a crowdfunding world obsessed with 3-D printers already. But Frog is mentally prepped for failure.   Imboden says.  

“The reality is, there’s a risk in all of our projects. If there’s not a certain measure of risk, there can’t be a certain measure of success.  Will we always knock it out of the park? No, I don’t think that’s possible. If we did, we’d be knocking it out of a very small park for very small risk.”

Order it here.

COMMENTARY:   If Frog Ventures can raise the required capital to produce a commercial version of the Mod-T 3-D printer, and be able to price it at $250.00, and still make money, they are accomplishing something truly incredible.  I think $495.00 would've been a far better price and given the company some "wiggle" room in case something goes wrong during the manufacturing process.   

The relatively high cost of 3-D printers has prevented this technology from taking off like smartphones and tablets have, and the low price point of the Mod-T 3-D printer and quality features of the product certainly allow this new product to standout in the marketplace.  

Courtesy of an article dated May 28, 2014 appearing in Fast Company Design

DOORBOT LETS YOU ANSWER THE DOOR WHEN YOU'RE NOT HOME

THE DOORBELL IS GETTING MADE OVER AS A DIGITAL DOORMAN AND SURVEILLANCE CAMERA.

Unless you live in a doorman building or your house is located in a theft-free neighborhood, the downside of online shopping--especially during the holidays--is the fear that your packages might get swiped. For most of us, the new DoorBot is the doorman-slash-security-camera we've always wanted. Sleek and wireless, it easily attaches to your home and uses low-voltage Wi-Fi to beam live video of whoever rings your doorbell directly to your phone so you can see who’s there and communicate with them intercom-style.

The Doorbot package includes all the necessary components and an easy-to-read installation manual (Click Image To Enlarge

Jamie Siminoff, chief inventor for the company says.  

"Usually, when I tell my wife about my invention ideas, she correctly tells me they are bad.  Then one night I showed her my idea for the DoorBot, and she told me that I did not just reinvent the doorbell, but I gave her the feeling of having gates on the house for a fraction of the price. Now when I travel, she can answer the door from a comfortable, safe area in the house."

With that vote of confidence, he and his team--including several people who helped him create PhoneTag, a pioneering service in 2005 that transcribes voicemails into emails and text messages--got to work, figuring out how to pack a full-featured product into a small ABS plastic box, and make it simple to install and use. They successfully raised more than $250,000 via crowdfunding site Christie Street late last year, went into production, began shipping units earlier this month, and are on pace to sell $7 million in units this year.  Siminoff says that beyond raising capital, the process served to refine his invention, challenging the team to make it everything his customers needed it to be.

Doorbot device allows your to see and speak with visitors at your front door through a mobile app that installed on your smartphone (Click Image To Enlarge) 

He explains.  

"Using crowdfunding for a product definitely impacts the overall process that we went through in bringing DoorBot to market. We received immediate feedback from passionate customers prior to the product ever reaching the shelves. The result is that we were able to design and manufacture a product that is much more appealing to the market right at launch than a typical version one product."

That's good news for those looking to automate their homes. Installing a DoorBot means you're connected to your door--the portal to your abode--24/7.  Beyond just seeing who's knocking, the $199 unit can be paired with Lockitron to provide keyless entry (buy them together for $349).  

 

Back to that online shopping conundrum: Expecting a package while you’re at work? Confirm the delivery guy's identify, buzz him in so he can leave it inside, and use the camera to watch him leave--all through the app. The DoorBot even has night vision, so you can always see who's dropping by, even after hours or in a dark entryway. It can be hardwired where your old doorbell lived, or run on an internal lithium polymer battery that only needs to be recharged annually. The free app works with both Apple and Android phones, and the unit is built to stand up to extreme weather. It’s now being sold in more than 60 countries.

It is also going live on the Staples Connect system, which allows you to unite all of your Internet of things in one app and it allows you to piece together the system with only the hardware and services you love, rather than using an out-of-box solution that one company put together.

Siminoff says. 

"Homeowners don't want to spend a fortune on a comprehensive system, and now they don't need to.  DoorBot provides convenience and safety for when you're at home, and peace of mind for when you're away."

COMMENTARY:  I absolutely love Doorbot because it solves a real need in the marketplace: Knowing who visits the front door of your house when you are not home, and being able to do something about it.  

If you expect a package or an important visitor to show up at your front door, and you will not be home, this is your backup plan and a damn good one.  If it is a bad guy, they are immediately put on notice that you saw them and heard them.  This reduces the likelihood that they wlll break into your house.  At $199, you cannot beat that price for piece of mind.  

With security systems and services like ADT, you must pay a one-time upfront fee for installing a security system and a monthly rental fee that will run for a minimum of three to five years.  The final costs of an ADT system are many thousands of dollars.  Doorbot at $199 is much cheaper and is affordable by all homeowners, a very huge market indeed.  

Shame on the Sharks from ABC's Shark Tank TV show for turning down Jamie Siminoff.   I would never have accepted money from Kevin O'Leary.  O'Leary wanted a 10% royalty and a 10% ownership for the $700,000.  The payment of the royalty would end when the $700,000 investment is fully recovered.  Here's the YouTube video of Jamie meeting those mean Sharks:

Click To View Video

Jamie did the right thing by pitching Doorbot using crowdfunding, and is now well on his way to generating first year revenues of $7 million.  Congratulations Jamie!!

Courtesy of an article dated December 20, 2013 appearing in Fast Company 

KITE: THE AMAZING SQUARE MOSQUITO REPELLANT STICKER, COULD END THE SPREAD OF MOSQUITO-BORNE DISEASES IN AFRICA

The Kite Patch acts like an impenetrable force field to keep mosquitos from biting people. (Click Image To Enlarge)

The Kite Patch is a little square sticker that emits a cloak of chemical compounds that block a mosquito's ability to sense humans. Image: ieCrowd

Mosquitos were born to bite us, and aside from lighting worthless tiki candles, haplessly swatting them away, or resorting to spraying toxic DEET all over ourselves, there’s really not a whole lot we can do about it. Imagine then, if you could be encapsulated in an anti-mosquito bubble simply by wearing a small square sticker. Not only would it save mosquito-magnets like myself some really uncomfortable moments, it could be a major game changer in the way we prevent mosquito-borne illnesses like Malaria, Dengue Fever, and West Nile Virus.

The Like Patch has one purpose: Make humans "invisible" to mosquitos (Click Image To Enlarge)

The good news is that a sticker like this is not some far away concept dreamed up by scientists in a lab–it’s actually a real thing that you’ll likely be able to find on the shelves of your local Walgreens sometime in the not-so-distant future.

The Kite Patch could be the solution to ending the spread of mosquito transmitted diseases like Malaria, Dengue Fever, West Nile Fever (Click Image To Enlarge)

Essentially, the Kite Patch is a little square sticker that emits a cloak of chemical compounds that blocks a mosquito’s ability to sense humans. According to its developers, users simply have to place the patch onto their clothes, and they become invisible to mosquitoes for up to 48 hours. This is big news for developing countries like Uganda, where residents have little beyond mosquito nets and toxic sprays to combat the illness-spreading insects.

Olfactor Laboratories developed non-toxic compounds that work against mosquitoes' long-range abilities to detect humans through CO2, as well as dampening the bug’s short-range ability to sense us from our basic human odors. Image courtesy of Olfactor Laboratories (Click Image To Enlarge)

That’s exactly where Kite’s creators, a collaborative team made up of innovation venture capital group ieCrowd and Olfactor Laboratories, intend to ship these off to as soon as they’re done blowing past their second goal on global crowdsourcing site Indiegogo. Launched just last month, the campaign surpassed its original goal of $75,000 in just four days and is now gunning for a new goal of $385,000 (currently at $336,000).

 

Though the Kite seems a little fantastical, it’s backed by some legitimate technology. Back in 2011, Dr. Anandasankar Ray, an entomologist at the University of California, Riverside (and founder of Olfactor Labs), found that certain chemical compounds can inhibit the carbon dioxide receptors in mosquitoes. These smelly compounds, which act like a anti-mosquito force field, are able to disorient the bugs, whose main method of tracking down humans is through our exhalation of CO2.

A scientist testing the chemical compounds in the Kite Patch. Image courtesy of Olfactor Laboratories. (Click Image To Enlarge)

The findings were considered a breakthrough moment in the field, but the technology was far from ready to be applied to a consumer product mostly because the compounds were toxic and wouldn’t be able to pass through FDA and EPA approval.  Grey Frandsen, Vice President at ieCrowd explains.  

“It wasn’t ready to be placed into a product that could mean something globally.” 

The hand on the left shows how mosquitos react to the Kite Patch not containing the mosquito repellant compounds, and the hand on the right shows that mosquitos are repelled as a result of the repellant compounds in the Kite Patch. (Click Image To Enlarges)

That’s where his company came in.

ieCrowd basically functions as the belt of an innovation assembly line, guiding an idea through the necessary steps so it can become a widely distributed, (hopefully) world-changing product.  It begins with acquiring the intellectual property, like they did with Dr. Ray’s research. From there they provide all of the business infrastructure, marketing, and general support so subsidiary companies can focus exclusively on developing new technology.   In the case of the Kite Patch, ieCrowd worked with a group of scientists at Olfactor Laboratories, a research facility in Riverside, Calif. that developed a new targeted library of chemical compounds based on Dr. Ray’s original research.

Olfactor’s non-toxic compounds work against mosquitoes’ long-range abilities to detect humans through CO2, as well as dampening the insect’s short-range ability to sense us from our basic human odors.  These chemicals, which give off a “faint pleasant smell,” will be applied to a small sticker, which Frandsen notes is the cheapest, easiest, and most adaptable way to design a spatial insect repellant. The patches will then be shipped off to Uganda for field testing, which should begin before the end of the year. Frandsen says of ieCrowd’s method.

“Really, what we’re doing is creating a rapid scientific development process, a rapid prototyping process and then a very aggressive go to market strategy.” 

The Kite Patch needed to be affordable, adaptable and easy to use, which is why it was designed as a square sticker. Image by ieCrowd.  (Click Image To Enlarge)

The product has had a little help along the way, namely from the National Institutes of Health, the Bill and Melinda Gates Foundation, and the Walter Reed Army Institute of Research. Frandsen says.

“The big names behind us have helped us advance the science.  But those grants do not cover product development.”

All of the money raised from the Indiegogo campaign will be funneled into extensive field testing. Originally, the testing was going to provide 20,000 patches (around 1 million hours of coverage) to one district in Uganda. The extra money raised will double the number of Kite Patches shipped and expand the coverage to four million hours in three political districts in the country.

The idea is to refine the Kite as much as possible during the field testing and hone in on three main goals:  

• Analyze the adaptability of the patch.  
  • Is it easy to apply and wear? 
  • Does it work well both at morning and at night? 
  • Does it fall off people’s clothing at after a certain point? 
• Test the effectiveness of the technology in harsh conditions found in places like Sub-Saharan Africa. Scientists have yet to determine exactly how far the sticker’s spatial radius extends and will be looking to see how it reacts to wind and extreme weather. 
• Begin field testing to evaluate how the sticker interacts with and can supplement current malaria prevention technology like bed nets.

Frandsen says.

“We’re looking at: What are any shortfalls specifically relating to the design that we can solve for that don’t come from testing it with 100 people in the Canadian Rockies or in Florida?  So there’s this real life, real world use and evaluation of that.”

The Kite has reportedly performed well inside the highly-controlled confines of a lab, but Frandsen says the most vital evaluation will come from the Kite Patch’s time in Africa.  He says of the extensive field testing. 

“It’s a really unique way of doing product development.  It’s a lot easier to deal in private-equity markets or investments and just finish it.”

But, he continues,

“This technology is too important to just funnel directly to the Walgreens. It needs to be part and parcel of people’s daily lives all over the world.”

You can donate to the Kite Patch campaign on Indiegogo.

COMMENTARY:    The Kite Patch is a no-brainer that is destined to become a game changer.   The Kite Patch is a product that screams for capital to speedup the research needed to test the patch's adaptability, efficacy and begin field testing.  I say the faster the better.  The Kite Patch is needed right now, especially in tropical countries of the world where mosquito-borne diseases like Malaria, kill millions of people each year.  

Courtesy of an article dated August 16, 2013 appearing in Wired 

 

HOW KELLY ANGOOD RAISED 35K POUNDS FOR THE VIDERE PINHOLE CAMERA MADE OF CARDBOARD ON KICKSTARTER UK

Angood solved some of the problems that plague homemade pinholes: “The key moving part is the internal mechanism where the 120 film feeds into the empty spool. The mechanism has a slightly curved film plane to help ensure the exposures are evenly exposed,” she explains. “This is because when you have a flat film plane, light fall-off from centre to edge (caused by the increased distance from pinhole to edge, effectively increasing the focal ratio) causes the exposures at the edges and corners to be less than at the centre. This was the most complicated part of the design, but ultimately the most rewarding to get right.” (Click Image To Enlarge)

WHAT HAPPENS WHEN YOU MIX A PINHOLE CAMERA WITH A VINTAGE TWIN REFLEX, THEN CRAFT THE WHOLE THING OUT OF STIFF PAPER? WE DON’T KNOW, BUT WE’D SURE LIKE TO FIND OUT.

At a camera shop in Edinburgh, I spotted it: A vintage, bellowing lens camera with crystal clear glass and a pricetag within my reach. I’d been eBay-stalking these old beauties for months. Now, one was mine, complete with the original leather case and a few free rolls of film. For the next week, swapping 12-frame rolls in mud, mist, and high winds beneath nothing more than the tenuous shelter of my raincoat (and the infinite expanse of my wife’s patience), I experienced more fun taking photographs than I’d had in years. And when I finally got the photos developed, even my mistakes reminded me of the place and time.

The Videre pinhole camera is a celebration of vintage cameras, papercraft, and medium format film photography in one (Click Image To Enlarge)

The Videre is a pinhole camera by Kelly Angood, decorated with an intricate, cardboard twin lens reflex camera body (so it looks like a TLR, but it’s not). Like my bellowing lens camera, the Videre celebrates expensive, limited-exposure medium format film. But in every other way, it’s even more rudimentary. The pinhole camera is the world’s simplest camera, after all, consisting of little more than a hole in a box that allows light to strike the film. To take a photo, you essentially open up that hole, for anywhere from five seconds to several months. The results, however, can be impeccably detailed and wonderfully ephemeral.

 

What makes Angood’s creation so weird is how it’s mixed two styles of vintage camera into one exceptionally quirky cardboard construct--a construct that took a lot of love to make into a relatively high-performing camera (that, incidentally, has been designed to capture shots somewhere between 8 and 40 seconds). And at the same time, she solved an engineering problem that plagues most homemade pinhole cameras.

Kelly Angood’s Videre pinhole camera is decorated with a twin-lens reflex camera body to look like a TLR (Click Image To Enlarge)

Angood explains.

“The key moving part is the internal mechanism where the 120 film feeds into the empty spool. The mechanism has a slightly curved film plane to help ensure the exposures are evenly exposed. This is because when you have a flat film plane, light fall-off from centre to edge (caused by the increased distance from pinhole to edge, effectively increasing the focal ratio) causes the exposures at the edges and corners to be less than at the centre. This was the most complicated part of the design, but ultimately the most rewarding to get right.”

There are other premium touches, too, like a light-filtering red acrylic window that lets you check how many photos you have left, or a viewfinder that folds down onto itself--like a real TLR camera--even though that viewfinder actually has no practical purpose to a pinhole camera.

There are other premium touches, too, like a light-filtering red acrylic window that lets you check how many photos you have left, or a viewfinder that folds down onto itself--like a real TLR camera--even though that viewfinder actually has no practical purpose to a pinhole camera. (Click Image To Enlarge)

Angood explains. 

“To me it’s really important to get these little features right.  You’d never guess it but the leather texture on the camera body also took nearly a week to create through various (and highly analogue!) printing methods. “

Indeed, it’s Angood’s perfectionism for artifice that elevates the Videre beyond mere gimmick to a nostalgic reboot, a celebration of vintage cameras, papercraft, and medium format film photography in one. It’s not designed to make photography simple; it’s designed to make photography fun. And if you’d like to pre-order a Videre kit of your own, you’d better act fast, as the offer expires soon. It’ll run you about $40 on Kickstarter.

Portraits taken with the Videre pinhole camera (Click Images To Enlarge)

Order it here.

COMMENTARY:    The Pop-Up Pinhole Project on crowdfunding site Kickstarter UK raised 35,165 pounds from 881 individuals.  This far exceeded the goal of 15,000 pounds   Congrats to Kelly Angood, the inventor of the Videre pinhole camera cardboard kit for exceeding goal. Let's hope that she can successfuly deliver the units on a timely basis.  This is fun, new idea that could start a new tren in cardboard cutout products.

Courtesy of an article dated May 16, 2013 appearing in Fast Company Design

 

 

 

CROWDFUNDING GROWTH EXPLODES IN 2012, $2.7 BILLION RAISED WORLDWIDE, UP 81% OVER 2011, KICKSTARTER NO 1

The crowdfunding industry is already growing rapidly, and as that growth accelerates, several crowdfunding niches are expected to really take off.

Last year, 308 active crowdfunding platforms (CFPs) across the world raised $2.7 billion, an 81 percent increase over the amount raised in 2011, according to the annual report released today from the Los Angeles based research firm, Massolution.

The growth in 2012 represents an acceleration, up from 64 percent growth in 2011. Looking ahead, growth is expected to reach $5.1 billion raised in 2013, representing an expected 89 percent increase in the dollars raised, the report predicts.

While this data is global, crowdfunding is centered in North America and Europe. More than half of the funding raised last year, $1.6 billion, came from North America and $945 million was raised in Europe, the report says.

As it exists, the majority of money raised with crowdfunding is still on donation or reward-based platforms, where an entrepreneur or artist raises small sums from a large group of people in exchange for a product sample or experience. Of the $2.7 billion raised in 2012, $1.4 billion was on donation or reward-based platforms, made popular by brands such as Kickstarter or Indiegogo. Lending-based crowdfunding, where campaign leaders have to repay their investors, equaled $1.2 billion.

Equity-based crowdfunding, where investors receive a share of the company in exchange for funds, was the smallest sector the market in 2012, totaling only $116 million. Startups in the U.S. are able to crowdfund from accredited investors. Also, in a handful of countries, like the United Kingdom, equity-based crowdfunding is already legal. In coming years, the distribution of funds raised from donation-based, lending-based and equity-based crowdfunding is likely to shift.

Part of what is expected to drive acceleration in the U.S. is the implementation of the forthcoming Securities and Exchange rules for allowing U.S. entrepreneurs to raise money by selling equity in their company more easily to non-accredited investors.

Crowdfunding is in its infancy. Here’s a look at three trends expected to emerge.

1. More groups use crowdfunding to support innovation challenges to solve complex, social problems. Communities will increasingly come together to raise a pot of money to award to an entrepreneur that solves a problem, says Chance Barnett, the co-founder of Crowdfunder, a Venice, Calif.-based crowdfunding platform. “That might be solving poverty in an area, it might be building a mobile solution for people in developing countries who don’t have the ability to do accounting in a very basic level,” Barnett says. “We will see a lot of innovation come out because of crowdfunding because people are willing to put dollars up to solve big problems.”
2. Increased popularity of local, crowdfunding communities. Amateur investors often prefer to meet the entrepreneur they are backing face-to-face, says Barnett. That’s the idea behind his newest venture, CROWDFUNDx, which launched last week. It’s an online network that brings together leadership boards in 11 cities across the U.S. and in 12 cities in Mexico to run 120-day startup challenges culminating in a pitch contest. The local community then funds the winner through crowdfunding.
3. Women entrepreneurs stand to raise more investment dollars. Women get 5 percent of all investment capital, says Barnett, but they will have increased access to funding with crowdfunding. “Not only are women more active on social media, they are often more collaborative when they do invest, so it is going to be a really interesting space and it is going to be the perfect place for women to gain a lot of traction,” Barnett says.

COMMENTARY:    Crowdfunding is getting so much bigger than Kickstarter. Last year alone, it generated 1 million successful campaigns and $2.7 billion across the globe.

Crowdfunding World Map - Massolutions - 2012 (Click Image To Enlarge)

Research firm Massolution gathered that data from 308 active crowdfunding platforms (CFPs) worldwide via the website for its 2013 Crowdfunding Industry Report.   Crowdfunding nearly doubled last year, with an 81 percent increase over 2011. North America and Europe, taking second, dominate the market, with a more than 95 percent stake.

Massolution, which specializes in the crowdsourcing and crowdfunding industries, is predicting these figures will reach $5.1 billion this year, with North America contributing 72 percent.

Last year saw significant milestones for crowdfunding. In January, the Elevation Dock became the first to pass $1 million. Then in April, the Pebble smartwatch beat this achievement in only 28 hours, going on to raise $10 million total.

Massolution chief executive Carl Esposti said in a press release. 

“While lending-, donation-, and reward-based crowdfunding have thus far been leading this global financial revolution, equity-based crowdfunding is about to take center stage in the U.S.”

It’s expected to reach $166 million in 2013, up from $116 million this year.

Esposti said.  

“The JOBS Act, which will allow non-accredited investors to make investments in exchange for equity, is expected to go into effect by the end of 2013.” 

President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law a little over one year ago. It gives regular people the chance to become investors.

This is an “untapped funding source” that will help entrepreneurs who need funding,  Massolution analyst and research director Kevin Berg Kartaszewicz-Grell told VentureBeat.

He said.

“Crowdfunding offers a great opportunity for everyone to leverage their social networks and transform social capital into financial support.  Clearly, companies that already make use of distributed networks — such as software developers, media companies, Internet companies, etc. — are in positions of relative strength because the communication networks have already been established, and reaching out via crowdfunding campaigns is thus a natural extension of their networking activities.“

Massolution found that crowdfunding volumes grew 105 percent to $1.6 billion in North America and 65 percent to $945 million in Europe. All other markets expanded close to 125 percent. Most of this growth came from donations (680,000 campaigns) and lending (about 250,000), the latter stemming mainly from crowdfunded microloans and community-driven loans to local small- and medium-sized entities (SMEs), along with the adoption of reward-based campaigns, like those on Kickstarter.

Crowdfunding Financings - Successful and Unsuccessful - By Platform Type of Financing and By Geography Locality - Massolution - 2012 (Click Image To Enlarge)

Social causes drive 30 percent of all activity, which Massolution expects to change as more startups and SMEs begin leveraging the platform. The graphic below shows the 10 most active categories by percentage.

Video games were also huge beneficiaries of crowdfunding last year, raising $83 million on Kickstarter alone.

Kartaszewicz-Grell said.  

"Most game developers would fall under Software and Smart Apps, which is an emerging category I personally expect to see growing rapidly. Software development — especially video games — is a perfect match for crowdfunding because this space has a relatively high portion of its transactions done online and because developers are more used to communicating their state of development via social media.”

Massolution composed its report from survey responses received in the first six weeks of 2013. It was unable to reveal which participating crowdfunding platforms were the most active.

Crowdfunding Platform Activity Across The Top 10 Categories - Massolution - 2012 (Click Image To Enlarge)

Courtesy of an article dated April 8, 2013 appeared in Entrepreneur and an article dated April 8, 2013 appearing in VentureBeat