Crowdsourcing Log

crowdsourcing news in the world

Crowdsourcing to Crowd Funding

March28

62d93d7e3747391143d1046dce0afb991633f986Crowdsourcing, a word that coined in the last few years to describe the process by which an organization puts out a request to the crowd for information, ideas and solutions.

Now comes crowd funding, an offshoot discussed in Monday’s Wall Street Journal. In this variation on crowdsourcing, customers or enthusiasts can invest small amounts in a given product or venture, in return for a share of any profits that might ensue. Meanwhile, these small web-savvy investors also have an immediate interest in promoting the product or venture by posting messages in appropriate venues on the Internet. So far, the concept of crowd funding is getting its first major tryouts in the worlds of music and fashion, through various websites dedicated to promoting the efforts of new artists in these fields. The success of these early crowd funding initiatives may help introduce the idea to the broader business world.

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Crowdfunding - The Age of Stupid

March8

the age of stupid

Congrats to The Age of Stupid. which following a successful sourcing of Crowd funding, is due out in cinemas in the UK in March. Whilst Wishing them every success, we asked the team why they chose this approach.

Q: Why are you crowd-funding The age of stupid?
Our ultimate aim in making The Age of Stupid is to help bring about the exponential change in global awareness needed to force governments to introduce legislation which cuts global carbon emissions by 60% and allows life to continue on this planet. Gotta aim high, right?

Funding the film independently helps us achieve this, we hope, in three main ways:

1) What the film says
2) Who sees it
3) Who gets the cash

Q: Will it be a better film?
Should be. As we’re making it completely independently, we don’t have any Executive Producers or Money Men telling us what film we should be making. Or to hurry up and finish to fit with their deadlines. Or to tone it down because their advertisers won’t like it.

Q: Who will get rich if The Age of Stupid is a smash hit?
John has made some of the most high profile documentaries of recent years. ‘One Day in September’ won the Oscar for Best Documentary and ‘Live Forever’ destroyed several forests in press coverage. So you might imagine he is rich. But when those funding bodies pay you to make a film for them, they also wrap up the finances. First, they insist that the initial money taken by the film goes to repay their investment. Which is often the only money that comes in. And second, if the film does repay all it’s production costs and goes on to make a profit, guess who gets most of it? For example, ‘Touching the Void’ is financially the most successful British doc of all time. It took an estimated US $10 million at the box office, none of which has filtered down to the filmmakers.

It’ll be a different story on The Age of Stupid. Everybody who works (above a minimum) or invests in the film will own a slice of the pie. So if The Age of Stupid is the smash hit we’re dreaming of, the people who will benefit, money-wise, are those who made it, those who star in it and those who financed it. If we make enough to help fund future related projects & films, even better.
Also, if we succeed in raising the whole budget independently, there will be no debts or financiers taking their cut before we can start sharing out the profits - unlike most deferred payment films which are saddled with a million quid or so in debt.

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Crowdfunding : Colektivo

February23

colektivo

Colektivo is a new crowdfunding startup that appears to be attempting to bridge peer-to-peer loans . A sort of Kiva for entreprenurs, bridging the concepts behind startups like CommunityLend and Vencorps. Startups are asked to fill out a loan application, and a group of lenders then decide if they want to make a loan to that startup.

Colektivo runs the first investment fund on the Internet managed by a group of investors. The investment fund sole purpose is to supply local small and medium enterprises (SMEs) with debt financing. This synergy between SMEs and savers represents a real alternative to banks and traditional investment products. The incomes of interest generated by the loans are redistributed to the savers whereas the principal portion is reinvested in other SMEs. With a minimum investment of 100$, investors are able to buy investment fund units

The peer-to-peer loans industry has been under a lot of pressure and has lived under a cloud of uncertainty in almost every jurisdiction so far. Prosper.com was shut down by the US SEC in November 2008, and in Febuary 2008, IOUCentral launched and was then quickly shut down here in Canada.

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Crowdfunding : Play It Forward soon to launch

February22

A month ago, one of the big discussion topics at the Nationale Vakdag Fondsenwerving conference in Holland was Online Social Network Fundraising so it was great just after the event to spot a new online initiative coming from Holland looking to capitalise on the supporter engagement opportunities now available through Web 2.0.

Play It Forward is a start-up that plans to launch a new online giving platform next month, offering individuals or groups of individuals the opportunity to fund specific projects around the world.

Play It Forward looks like it’s going to have some special aspects to it that could make it stand-out as a distinctive player in the online nonprofit project crowdfunding world.

Project-wise, it looks like donors should have plenty to choose from too. Already over 70 partner organizations are listed on the site, representing a highly diverse range of activities around the world.

In finance terms, 100% of your donation will apparently go to the project chosen, which is great - as it’s exactly what donors want. However, just how this is being achieved is not entirely clear. The organisation’s FAQs explain that it will funded through the interest on donations, but I couldn’t find any specifics about how long they will hold donations to accrue interest. Hopefully they have sufficient funding in place to get them through the start-up and launch phase, because I’m guessing it could take a while before they start seeing donations at the volume required to generate sustainable income from interest payments alone.

Overall, even though their main site has yet to launch, from the content of the holding site you get a great feeling of fun and energy - which contrasts with the more ‘corporate’ feel of some online giving sites - and I love the way they have so wholeheartedly embraced the potential for project crowdfunding through people’s online social networks. As they describe it on the site, “The thing that brings it all together is the social network, connecting friends, projects, field workers and charity organisations. All communicating and working together to create a positive change. Play it Forward is more than just donating to charity. It’s a team sport. If the world wants education for all, or a wild life park to protect endangered species, it’s a matter of inviting friends.”

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Crowdfunding Android Firmware Development?

February9

Android aficionados have a laundry list of things they would like to see added to Android proper. Some of these are being addressed in the so-called “cupcake” development path, but others are not. This begs the question: how are we going to get these things built?

Some may say that the core Android team should implement them. That’s all fine and well, but there are hundreds, if not thousands, of things that could be built. The core Android team is only so big — it will take years upon years to tackle just the items that have been discussed, from better development tools to apps running off of SD cards to just improving some of the core applications. And it is fairly obvious that the list of things that could be done will just keep growing.

With open source, of course, some people will elect to contribute to the project on their own, or via their employer. This will certainly help expand Android’s capabilities. However, such third-party developers will be interested in scratching their itches, which may or may not line up with the itches that a broader swath of people might be interested in.

Of course, some people might contribute to Android if they were paid to do so.

For example, in 2008, Gregory Brown served as the Ruby Mendicant, where he raised funds to allow him to develop Prawn, an improved PDF generation library for Ruby. Funds came from a mix of individuals and firms, interested in his project and, perhaps, in this concept of “crowdfunding” some open source development.

Similarly, projects like FCKEditor have used services like Fundable to raise money either for general development efforts or for specific items (e.g., hardware needed for testing a port).

The question is: can we do the same thing for Android firmware improvements? Are there firmware engineers out there who would like to contribute to Android but cannot for financial reasons, and are there people in Android-land who would be willing to contribute money — large or small — to help fund specific projects that you find interesting?

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Crowdfunding as a Way to Fund Businesses

February4

I’ve always thought that the potential for funding entrepreneurs via crowdfunding was a very powerful concept. I thought of it years ago, even before crowdfunding existed as a term.

But I’m certain that it’s only a matter of time before crowdfunding overtakes angel investing and other traditional financing mechanisms as a great way to fund a new business concept.

However, there are many challenges. If a small contribution obtained via crowdfunding is actually an equity investment or even a loan, then crowdfunding companies may soon run afoul of securities laws. I forget the details but if you raise money from over a certain number of investors, you start being subject to all sorts of securities laws that are a pain.

If you ask me, those laws should be completely recrafted to allow crowdfunding and kick it into high gear. To me, crowdfunding is fuel for human capital and great projects that is currently untapped but has enormous potential to change the world as we know it. I’m sure there are some advocated at the SEC, the SBA, the Federal Reserve but, no doubt, bureaucracy is frustrating the heck out of them right now. Hopefully, we’ll figure out how to tap into the power of crowdfunding soon.

The thing is, it does have to be regulated. I mean crowdfunding scams will be huge, once crowdfunding grows in popularity. When there’s money involved, scammers will come.

There also needs to be some liquidity to crowdfunding shares. If people are going to make microinvestments, they will want to be able to profit from their investment. It will be a great day when a firm that raised $100,000 from 20,000 $5 investors sells out for a few million and everybody gets a tidy, albeit little, return on their investment.

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Crowdfunding Versus CrowdSourcing

February3

Crowdfunding mechanisms tend to have a tipping point built-in to the process that takes popularity of an idea or cause into effect. So, let’s say that I have a crowdfunding site that funds small businesses. If a small business only gets 3 people willing to support the entrepreneur with commitments of $5 each, the logic on my site’s back-end might say “Punt. Not enough people are willing to back this to really help the entrepreneur out.”

On the other hand, if my hypothetical site listed an entrepreneur’s money needs and we had 10,000 people willing to commit $50 each, then a trigger might be flagged to actually fund the entrepreneur with $50,000.

In this respect, crowdfunding is also an evolution from what’s come to be known as crowdsourcing. That’s the idea that a task can be delegated to a crowd. It’s applying mass collaboration to get something done.

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Cameesa: Crowd Funding the t-shirt industry

February3

It’s not very often that you get to find websites that are brand new to the market and that are actually trying a totally different approach to business. Recently, we somehow managed to get in contact with the great people at Cameesa, a new, possibly better than Threadless style social website that gets the crowd involved in getting their favorite shirts printed by providing the actual support for the prints.

Signing up and getting a profile setup is quick and painless. After logging in you can cruise through the designs and choose to “support” certain shirt designs that you like by pledging a dollar amount towards that shirt. Best part is for those of you who don ‘t do t-shirt design is that if the shirt you support gets picked then you get one sent to you AND you get a portion of the profit!

Are you a starving t-shirt designer like us? Then submit some of your work and reap the benefits if your shirt is picked for printing!

I’ve become a real fan of sites like this, as well as sites like Rumplo, and Please Dress Me, but more so I’m a fan of the business model. Being able to have the community rally around the designs they like best is like a guaranteed product that will sell. Throw in the fact that people are willing to wear just about anything on a t-shirt and you’ve got yourself a surefire way to make money. The real genius in what Cameesa is doing though is that the community is also funding the designs and sharing the profits. For the little guys like Assault, every penny counts. This seems like a great way to expedite the up front cost of printing shirts. (even if people have pledged to buy them) We know better than anyone that sometimes people just don’t buy the things even when they like them.

I think a site like Cameesa opens the doors to designers who may have tastes more like myself. Same goes for the great work that comes out of Design By Humans. As of recent Threadless seems to print more and more of the same style of shirt rather than branching out and allowing for a more diverse audience to get involved. Is Cameesa the answer to what we’ve been looking for in an apparel design community website that isn’t Threadless? I think it’s got a great shot.

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Crowdfunding Versus Microfinancing

January31

Crowdfunding is a neat derivative of microfinancing, which offers financial services to poor or low-income people.

Generally speaking, microfinance advocates believe that by getting financial services into the hands of the impoverished, you can help them to do some amazing things that can actually break the poverty cycle altogether.

Traditional banks can’t handle microfinancing because their overhead required to underwrite a loan precludes those loans from being too small. The same is true of many other financial service offerings. No bank is going to spend the time to underwrite a $50 loan and chase after small bank accounts that might never have more than $100. They just are not built for that.

However, a new breed of microfinancing institutions has evolved and they’ve been set up in a way that they can make microloans and offer microcredits to folks that previously had no access to such services.

Similarly, crowdfunding is circumventing traditional funding mechanisms like bank loans or venture capital. In essence, it says let’s see if we can get a ton of people to chip in a very small amount of money that in aggregate can help somebody to do something.

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How Crowdfunding is Changing Online Businesses

January29

There is that urban myth about a programmer who wrote a program for a bank, where every transaction it would deposit one cent, I think it was US cents, into his own account. Eventually he had millions and caught. However the point of the story is that he used a minimal and large scale to make millions in a short time period.

The other day a random surf around on the Internet landed me up on a new concept of Crowd Funding. Apparently politicians do it, Charities do it and even entrepreneurs. All these units are using it, with the assistance of the Internet, to get small amounts of money from lots and lots of supporters.

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