Crowdfunding

Yesterday’s discussion around the ParaShoot camera project and whether it was doing any more than rebadging a Chinese ODM’s product, available in bulk on Alibaba already, for sale here in the US or actually developing something novel lead to some thoughts on crowd funding and what they can, or should, be applied to. 

Manu Vollens (@manuvollens) proposed that crowd funding should only be used for disruptive projects:

Whether or not that applies to the ParaShoot project, I do think it is a little too restrictive on the funding model. One of the advantages of crowd funding is that in parallel with raising the money to fund your project you are also gauging the market’s demand for your project. But why should that be limited to disruptive projects?

Let’s create a hypothetical project that is bringing a new wireless toy to the US market. The toy has been available in China for a while, but not exported to the US. In order to be sold here, the toy requires safety certifications, new packaging & marketing materials, etc, etc. is it not valid to use a crowd funding platform to test market demand in the US for this “new” toy? And to raise the money to pay for all the steps needed to actually deliver the product. Is the introduction of a new toy that otherwise would not have been available a project unworthy of crowd funding?

Innovation through Evolution

In the case of ParaShoot, based on a series of emails I have had with the creators of the project, I suspect they started with a reference design from their ODM partner, and they have been tweaking it to provide some new features. That actually seems like a smart way to go to me. Why spend valuable time & burn cash re-inventing what already exists just to be able to say “it’s all ours.” And if that is your goal, I’d expect to see you designing your own SoC silicon too.

Taking a reference design and extending it or modifying it seems like an efficient engineering solution. If the product is wildly successful, the next version can perhaps move further from the reference design, but the smart stuff for these wearable cameras is the silicon (way too much for a crowd funded project to take on) and the software.

We will see how the project turns out, assuming they get their funding (I have backed them again on IndieGoGo). I am hoping that while the hardware may not be that different to the other options, there is potential for the software to make it shine. Of course, that also hinges on Matt and his team executing. But that is the risk in backing something like this.

Disruptive to Whom?

Another problem with the disruptive tag is that it implies there is already an incumbent market leader selling something similar, but this new product is going to disrupt the market, and perhaps even replace the incumbent leader(s), by doing something in a new way, or much cheaper.

I have been looking at a lot of the pen and stylus projects on Kickstarter recently (I blame an article in The Magazine for getting me started on that). A lot of them are great designs, but none of them are going to disrupt the pen or stylus market. They all follow the tried and tested basics for pen design, and all of the ones I looked at were designed to take existing commercial refills. Should they not be allowed on crowd funding platforms?

What about projects about making movies, or the next album for a band, or a book, or even a new video game? All of those are well represented too, and yet none of them are going to disrupt their respective segments. They may sell well (Kickstarter’s best of 2012 had at least one book making it on to a best seller list), but they’re not going to be disruptive at all.

So, to require a project to be in some way disruptive, or even to be trying to be disruptive, seems like an artificial limitation on what you can fund with a crowd. It makes more sense to me to allow any business to try to fund its next project using a crowd. And let the crowd decide if what you are proposing makes enough sense or not. After all, it is not as if you have to back every project on Kickstarter or IndieGoGo, so if you don’t think a project makes sense, don’t back it.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.