Crowdfunding is quietly changing the world. Websites such as Kickstarter and Indiegogo are enabling inventors, artists, and developers a way to fund their projects that up until now was almost impossible.
The secret resides in the simple idea of giving creators a chance to pitch to their intended audience rather than to the CEOs of large corporations. Traditionally if you wanted your product made you needed to raise the capital to build it yourself, usually achieved by securing funds from investors. If you’ve ever seen Dragons' Den then you’ll know how unfavourable that can end up being, with large percentages of your business being taken by the money men.
The internet is changing this. Kickstarter allows entrepreneurs to go to the general public, outline their project in a video, and then ask those interested to invest anything from £5 to £5000 depending on how much they support the idea.
But this isn't just a fundraising initiative, as the creators offer various enticements to their potential patrons. Those who just want to support the project with a small donation might receive a public thank you on the website, while those who invest heavily in a film or novel might have a character named after them in the final version. The best part is that this enables the artists to retain complete ownership of the product, while investors still benefit from their own munificence.
Trust is paramount when it comes to money and the internet, so Kickstarter has instituted a system that protects the creators and investors. A project has a set time to raise its funds, usually around 30 days, and must have a stated specific financial target.
If at the end of the campaign the goal hasn't been reached then all the money donated is returned to the investors and the project is cancelled. This works well in two way: first it requires creators to set realistic goals that cover only the cost of their projects, secondly it means that investors don't have to worry about their money disappearing into a hole if that ambitious motion picture idea only raises 10 percent of the £1 million target. (Famously, the Ubuntu Edge smartphone raised the biggest amount for any crowdfunded project at $12.8m on Indiegogo but also failed by the biggest margin as it planned to raise a cool $32m.)
In the four years since Kickstarter first opened its digital doors there have been over 45,000 successful projects funded on the site, totalling over £460 million in donations. The range of creative endeavours is incredible, with novels, paintings, electronic devices, children's toys, video games and movies all featuring. To give you an idea of the kind of products you could invest in we've handpicked some of the most successful Kickstarter projects to date. Many of them have already entered full production but may never have happened without the support of the Kickstarter community. Whose dreams will you make a reality today?
Crowdfunding success stories: 1. Pebble smart watch
With wearable computing heavily tipped to be the next big thing in technology it’s maybe not surprising that a watch that can interact and control aspects of a smartphone has become the most backed project on Kickstarter. The scale of the funds donated though is extraordinary. After initially asking for $100,000 to develop an iOS and Android version of its moderately successful Blackberry compatible Inpulse Smartwatch, the developers were amazed when nearly 69,000 people invested in the project, raising a quite astonishing $10,266,845.
The Pebble is now a fully fledged product that allows users to check messages, screen caller IDs, control the music playing on their phone, and install a variety of purpose built apps. The Pebble is waterproof (great for when you’re out in the rain and don’t want to get your iPhone drenched), features an e-paper display that’s perfectly viewable in direct sunlight, and will run for a week on a single charge. At the moment you can pre-order one of four different colours for the reasonable sum of $150 (approx £100) from www.getpebble.com, with delivery dates listed as ‘late Summer 2013’.
Next page: Ouya and Oculus Rift