Are you dreaming? Am I? I don't think so. I'm writing this, aren't I? You're reading it. We must be awake now. Crowdfunding can be somewhat dreamy, certainly. Movies by famous people, like the Veronica Mars Movie Project, Zach Braff's Wish I Was Here, and Spike Lee's "newest, hottest joint" have raised so many millions using Kickstarter, they are very nearly in the yadda-yadda-already-heard-that-one category. Artists you may have never heard of are raising hundreds of thousands on IndieGoGo and Rockethub. Causes and socially-responsible businesses are sprouting up on GoFundMe and Razoo. Donors Choose is supporting teachers. There is a crowdfunding channel for YouTube creators called TubeStart.
Crowdfunding has arrived. According to Crowdsourcing.org, there are more than 400 crowdfunding platforms operating all over the world. $772 million has been funded on more than 48,000 Kickstarters so far, according to Kickstarter. You can prototype everything from a mini-greenhouse for an apartment to an espresso machine, get backers, go into production, start a business. All without a dime of venture capital, all without giving up a penny of your business to investors. Is this wacky? No, it's the next generation of the American Dream, a reboot of capitalism, and it has banks and regulators really worried. Crowdfunding has given power to the people, more specifically to the creators. As Hugh MacLeod writes in his book, Ignore Everybody And 39 Other Keys to Creativity: "The sovereignty you have over your work will inspire far more people than the actual content ever will."
I believe what he means is that when you are free to create, people respect that freedom a lot. The freedom to create is hugely meaningful, whether that creative work is a tech startup, a painting, a building, or piece of pottery.
What kind of freedom am I talking about? You don't have to wait for a publisher to say yes to your manuscript, you don't have to worry whether a producer will like your movie script, you don't need to sweat it if the bank won't give you a loan. You can crowdfund your creative work-product. You become responsible for bringing it into the world.
Of course, it is all too good to be true. You know that. So do I.
There is nothing magical about crowdfunding itself. It's a lot of work. You need a solid online community so you can reach out and make a compelling appeal. You need something that will appeal to a market that actually exists today, not at some time in the future. Lots of crowdfunding appeals fall flat. They never find an audience, or they ask for too much and give too little, or they are just dumb ideas. Legal and financial experts worry that when the crowdfunding market fully opens up to equity investment (permitting you to get a "piece of the action" in a project) there will be more room for fraud, misunderstandings, and more opportunities for projects to crash and burn.
That doesn't have to be your project though. There is more information available about crowdfunding than ever before. IndieGoGo just published a white paper debunking the "myths" of crowdfunding. Medium has a curated article stream about crowdfunding life.Quora has a lively crowdfunding question-and-answer stream, and reddit has acrowdfunding subreddit with lots of action. The LinkedIn group "CrowdSourcing and CrowdFunding" has more than 20,000 members. The IPO group on LinkedIn? Fourteen-hundred members.
Crowdfunding allows you to flex your social media muscles, certainly, but more important is the social capital crowdfunding generates for you and for your project. Never before have we had the opportunity to test fly an idea before so many people. When it takes off, we have created a community to support it.
I'm leading an informational free webinar session about crowdfunding on Sept 18. I hope you can join me as we cover the latest developments in the crowdfunding landscape, and discuss how you can participate. Learn more about the session here.