Businesses and inventors – imagine getting your target market financially and emotionally committed to your new product before you’ve even finished designing it! This is the concept behind crowd funding websites such as Indiegogo and Kickstarter. Whereas the overall concept of people clubbing together to invest in something is not new, the fact that the global market can be tapped to create bigger funds and more community interest is.
Essentially the concept runs on the basis that many individuals will be prepared to make small (and, as a result, low risk) donations to fund the development of a product or service they are interested in seeing come to the market. A brief look at Kickstarter shows that these products or services can be very wide ranging from a woodshop making bespoke things out of, well, wood to (can you believe it!) launching a water propelled satellite deep into space. It seems like anything goes and the satellite project, at the time of writing, was 193% funded!
These type of websites mimic, to some extent, the normal financial markets where people and institutions club together to launch or invest in companies to deliver stuff. The differentiators are probably that the projects on these websites are more diverse than would normally be funded – imagine going to NASA and asking for $100k to launch a water propelled space ship – and that individuals can donate much smaller amounts than is normally allowed through the traditional markets. On top of this your potential target market can become involved at a very early stage of the product’s development so it (hopefully) ends up being the product the market wants.
All very interesting. The worrying thing is, where does the space ship go when it’s run out of water?