Crowdfunding is all about putting forth a proposition and soliciting funds from “the crowd” out in cyberspace.
By Oon Yeoh
Crowdsourcing is something we all do even if we don’t realize it. When you post up a question on Facebook or Twitter to get feedback from your friends and others in your network, that’s what has become known as crowdsourcing.
Crowdfunding, as its name implies, is similar in concept. You put forth a proposition and you solicit funds from “the crowd” out there.
The notion of using the Internet to obtain financing for a project is an idea that has been around for some time now. There are several platforms that facilitate crowdfunding. The most famous of these is Kickstarter, which was founded in 2009 but which only really came to broad public consciousness in the past year or so.
You might have heard of the Pebble watch, a so-called “smartwatch” which was crowdfunded via Kickstarter in April 2012. It began shipping out its watches early this year. Pebble managed to raise more than US$10 million through this approach.
Pebble is the most highly-funded Kickstarter project to date but it’s probably not the most high profile one. The project that made big news around the world was the Veronica Mars movie.
Veronica Mars was a detective series that debut on American television in 2004. It wasn’t a big hit and was cancelled three seasons later in 2007. But it did develop a cult following. Just how ardent that following was could be seen by the success of its Kickstarter campaign.
The show’s creator was hoping to raise US$2 million in order to enable him to make the movie, but he ended with US$5.7 million, making his movie the third largest fundraising exercise on Kickstarter (in second place is a project called Ouya: A New Kind of Video Game Console, which has since raised US$8.5 million).
Part of the reason for the buzz around the Veronica Mars funding was that crowdfunding had never been done before for a mainstream entertainment project. Two Academy Award-nominated short documentaries, Sun Come Up and Incident in New Baghdad, were crowdfunded through Kickstarter but these were indie films with limited public appeal.
Industry reaction to the success of the Veronica Mars funding has been mixed. Some view this as a positive development that would allow other television shows with a cult following to live on as movies. This could be the start of a trend but, at the moment, but it’s still early days and Veronica Mars could well turn out to be a fluke, some opine.
Whatever the case, it’s an interesting and positive development for entrepreneurs. And best of all, there are other platforms to do this, so entrepreneurs are spoilt for choice! Kickstarter’s main rival is Indiegogo. The main difference between these two is that the latter allows startups the option to collect the money even if they do not meet their fundraising goals.
Click here to see a list of eight Kickstarter alternatives (including Indiegogo), with brief details of each. Some are highly specialized, targeting niches such as health care, video games and music projects. All are American-centric.
So what about for those of us in Malaysia? The good news is that there is a local answer to Kickstarter called PitchIn, whose current project categories include film & video, publishing, technology and community. Coming soon but not yet available are arts & design, photography, games and music.
Will crowdfunding work here? The folks behind PitchIn tell a story about an early, pre-Internet version of crowdfunding that was a huge success in Malaysia. For the 1982 World Cup, RTM had planned to broadcast live only the opening, semi-final and final matches. A newspaper launched the “People’s Live Telecast Fund” which raised RM300,000 – a huge sum by any means at that time – and this enabled Malaysian football fans to view four extra World Cup matches.
So, in this sense, it can be said that Malaysians are willing to fund football broadcasts. Will they do the same for start-up ventures and projects? We shall see.
Oon Yeoh is a new media consultant and author of several books relating to technology and social media.
Image credit: Tech Cocktail