Reading this article reminds us that the jump from concepting and ideation to actual production is something that can be very difficult. Could crowdfunding be a possible solution to this more difficult problem of funding ideas?
Traditionally, design companies show new product development workflow as something like this.
The reality is as the article suggests more like this.
So this leads onto the focus of the article, for the majority of start ups and small businesses that have lower budgets and not the reach and resources for these systems to be put in place, how can they solve these issues without help? Could a form of crowdsourcing that involves investments from a crowd, called crowdfunding help?
Firstly there are 2 important questions to ask yourself.
1. Do I have the time to make this commitment?
2. Do I want to develop this publicly
These questions of course have huge impacts on whether you should begin a crowdfunded project.
Certainly crowdfunding has been shown to work in gathering money for projects\ that seem worthwhile. One attempt at this that has proven successful has been the work by Grameen bank, an attempt at helping the third World at getting micro financial help for individual projects that can help those in extreme poverty.
So how might this fit into the building of an idea at what stage should you seek funding from other people. The website suggests getting people involved at the proof of concept stage, of course this makes sense that people want to see at least something working in action rather than pure speculation. Then the idea has already started to prove at least it can be made. The speculation of course might still be in the interest of the public at large and it's possibility of future growth and success. But then that is what investment is all about, speculation on future growth.
Noted reasons for Kickstarters crowdsourcing success are suggested to be:
1. They filter which projects get posted to the crowd -
makes them interesting and worthwhile
2. You only get funding if you meet the threshold of prior to launching your project
keeps projects realistic and encourages crowd participation in promotion as projects get close to reaching their goals
3. Easy to find and promote projects
Easy is always good in these efforts, as it makes it easier for anyone to get involved.
4. Its success has made it more successful
As Malcolm Gladwell would suggest reaching a tipping point in success will only lead to more interest by others.
5. It's not about the money
Like most crowdsourcing efforts the crowd is most motivated by personal pet projects and interests.
You can find out more information about crowdsourcing in a previous post here.