Maybe you’ve heard about Kickstarter. It’s one of several sites that are part of the crowdfunding trend that’s hot right now. Why should you pay attention? Because Kickstarter and crowdfunding are becoming an important part of launching and marketing new products in today’s online world.
Kickstarter is a site where inventors, authors, video game designers, product developers and people with a great idea can pitch it to the world and ask for funding. It’s the democritization of investment banking, making angel investors of us all, often for sums as low as one to five dollars.
It’s interesting that Kickstarter and similar sites have catapulted to popularity during a recession, when credit is tighter than usual for entrepreneurs and artists. Not so long ago, to get a great idea off the ground, you either had to front the seed money yourself, persuade a bank to take a risk on you, or go hat in hand to friends and relatives, even for sums of just a few thousand dollars. Not too surprisingly, that didn’t work out well for many people, whose projects got shelved in the “someday” file.
How many of those products, software programs, games, books and other items might have been a big hit–and made our lives a little bit easier, interesting or more enjoyable–but never got the chance?
Crowdfunding lets the market decide–and fund–what it wants. While this is a big change from the way things have been done in the last fifty or seventy years, in some ways, it’s a return to the way business has been done for thousands of years, with the help of patrons who underwrite expenses. Except that now, instead of finding a wealthy individual or a powerful institution, the average person can kick in a buck or five and maybe be part of the next big thing.