I was with an author friend the other day. As we chatted, the topic of my recent Kickstarter campaign came up. She rolled her eyes, puffed air through her lips – very French – and said,
Kickstarter is full of artists and authors hoping to by-pass the gatekeepers and self-produce at the expense of quality. Why should I pay someone to self-publish a book that an agent or editor doesn’t find it worthy enough to get behind? That’s why we have gate-keepers!
This was what we teachers call “a teachable moment.” I seized it.
That may have been true at one time, I told her. But today crowdsourcing is so much more. There are many more platforms than Kickstarter serving myriad needs and niches. There are also many ways to harness the power of the crowd, beyond merely raising money. Crowdsourcing is now a viable method for testing innovative ideas, marketing unknown products, or raising awareness for a worthy cause or movement.
She was listening, so I went on to explain all the ways in which my own campaign defied her stereotype: Those of you who followed my campaign will know I was not raising funds for a book, but for an educational app and interactive title suite authored not by me, but by world-renowned author, Mary Hoffman. And that my intention is to use this title, In the Footsteps of Giants, to launch my burgeoning digital publishing company.
The Many Faces of Crowdsourcing
Her interest now most definitely piqued, I went on to describe a handful of crowdsourced funding campaigns I’ve recently counseled or supported just to give her an idea of the many types of platforms now out there:
A local dog-owner pinned me down one day on how he might raise funds to realize his dog’s spine operation. I pointed him to microgiving.com.
A member library of the Uganda Community Libraries Association, one of the many literacy development organizations I support, asked me what platforms they might use to raise funds for a new roof. They are looking at YouCaring.com or crowdrise.com.
Lily’s friend at Brown University, who hasn’t been home to Australia in three years, requested I support his bid to raise funds for a ticket home for the holidays. He wants to surprise his mum. His campaign is currently live on GoFundMe.com.
Some former teaching colleagues, working in a cash-strapped inner city school district, asked for suggestions on programs dedicated to educators wishing to raise funds for classroom resources and instructional materials. I sent them to AdoptAClassroom.org and Donorschoose.org.
A fellow children’s app developer contacted me for advice on whether Kickstarter or Indiegogo would be a better fit for their project goals. After chatting, they decided to go with appbaker.com.
One of my Kickstarter backers reached out for help to resuscitate her languishing campaign. A few tweaks later and, I’m happy to say, she realized her goal with days still left on the clock.
How Many Crowdsourcing Platforms Are There?
I couldn’t answer that question at the time she asked it, so I went home did some research. The short answer is: A lot. Too many to count. In 2012, Marketing Moxie estimated there were 536 active crowdfunding platforms. Some come and go, set up to support disaster relief efforts, for example. Basically, where there’s a niche need these days, there’s likely a crowdfunding platform to support it.
No wonder more crowdsourcing platforms are popping up all the time. It’s a win-win economy: The more money raised, the more money made, the more people, projects, and organizations benefited.
Crowdsourcing: A History
This was not the case five years ago, when I launched my first Kickstarter to raise funds to develop the “World’s First StoryAppTour.” Kickstarter had only launched the year before, in 2009, and was then the only option for creative projects. Furthermore, the market of early adopters willing to support crowdsourced projects was then small. Indeed, my greatest difficulty in 2010 was convincing friends and family that it was safe to give up their credit card details online.
Even so, Forbes reported that $880 million had been raised through crowdsourced funding efforts in 2010. In 2014, that number shot up to $16 billion, according to Forbes, which estimates that by the end of 2015 total funds raised across all crowdsourcing platforms will soar to over $34 billion. The National Industry Association disagrees. They say $48 billion.
To put these sums into perspective, the venture capital industry invests an average of $30 billion each year. In less than 10 years, crowdsourcing has surpassed that.
Still, only a fraction of crowdsourced projects – plus or minus 50%, according to my sources – actually reach their funding target. There are many reasons for this. One reason might be – as I pointed out to my friend – that the crowd, rather than a traditional gatekeeper, has determined a creative project unworthy, or the gadget unproven, or the cause too narrow. The crowd, it turns out, can be incredibly savvy.
Of course, there are also great projects that go unfunded because the creators didn't do their homework, they didn't prepare well enough in advance, or thought all they had to do was build their campaign page and the crowd would come. This is just one of many attitudes that will kill a crowdsourced funding project before it’s even launched.
A Critic Converted
I believe crowdsourcing is important, as I told my friend, because it is democratizing the investment ecosystem, allowing individual artists, micro-enterprises, educational institutions, and small businesses, like independent publishers, that are otherwise ineligible for government grants, angel investment, and VC capital, to realize their dreams too.
“Well, I know who to turn to if I ever decide to crowdfund,” my friend said. “Only if you pay me!” I replied. “You’ve just received the extent of my free advice.”
“You should totally hang up yet another shingle,” she said.
It turns out, I know a lot more about crowdfunding than I ever gave myself credit for. Makes sense, though. I’ve learned the ropes by doing it… twice.
I am most grateful to my now enlightened friend for pointing this out!