The definition of economy is “the management of the resources of a community, country, etc., especially with a view to its productivity.”
This definition can be applied to how, through the internet, people are sharing talents and ideas in an organized way while keeping productivity in mind. Crowdfunding is a way to do just that. “Crowdfunding” is a way to fund a project through monetary contributions of a large number of people, usually through the internet . This is a recent term and was first coined in 2006 according to WordSpy.com. Since then, many online platforms for crowdfunding have launched and have seen great success. Within this short period of time, hundreds of thousands of projects have raised millions of dollars, exemplifying the enormous impact collaboration through an internet economy has on the world.
At KickStarter, productivity is at a high. KickStarter is a website that allows users (creators) to start a project dealing with almost anything (film, art, technology, food, fashion, music) and set a goal for themselves. Then fans, friends, and other users (backers) can donate money to their cause. KickStarter uses an “all-or-nothing” funding system. If the original goal is reached, the project gets that money and whatever else they raise above that, but if the goal is not reached, they do not get the money. Because of this, both creators and backers work together to achieve a goal.
What the creators get:
Creators get to see their dreams come to life as they get funding for something that would not have been possible without a crowdfunding platform. Creators get to keep their creative license and ownership of their work instead of having to sell out to bigger companies. For instance, individuals can make full-length films without the need for a huge movie production company weighing in on all of the decisions.
What the backers get:
Backers get to support something they admire and help fulfill someone else’s dream. You can support something that your friend made, something that you would want to purchase in the future, or just something that inspires you. The community gets the chance to make the decisions, not the huge corporations. There is little risk for the backers because if the project doesn’t reach its goal, the backers don’t get charged. If the project does reach its goal, the backers will know that another creative idea will come to life and they were a part of it. The creator of a project might also promise gifts to backers that give a certain amount of money.
What everyone gets:
Unique and creative content to continuing inspiring unique and creative content.
It is not just a successful KickStarter that will bring your creative project to life. “My Last Day at Seventeen by Doug Dubois” is a photography project about a group of teenagers in Ireland growing up near a housing estate in Russell Heights. Dubois had already created the project when he started the KickStarter. Having a successful campaign would mean he could have his photobook published by the publisher Aperture Foundation. Dubois had already put in the effort and resources to make his project, he just needed funding to get it published. It seems that an audience will not back you with just an idea. A real effort and passions for a project has to be evident for it to be a KickStarter success. Check out the project here
Not all of the KickStarter campaigns are successful, however. About 44% of KickStarter projects have reached their funding goals. Whether its setting your goal too high or a just a bad idea, many projects fail to get funded. There is even a website for many of these failed KickStarter projects. But if your initial KickStarter does fail, here is an article about how a game developer turned the failure into a success by re-starting his KickStarter project http://news.dice.com/2014/08/21/game-developers-kickstarter-failure-into-success/
Through the input from others in this economy of ideas and new creative business ventures, this game developer took what others said to become more successful the second time around. This is what good collaboration can create.
Some KickStarter campaigns have gone on to be very successful and have raised way over their initial goal. The Oculus Rift was initially a KickStarter and raised $2,437,429, way over its goal of $250,000. This is an example of how an idea can start small and, just with the support of a large number of small backers, a truly new invention can be created and influence technology and, in this case, the gaming industry. Watch this video for more information.
I, first-hand, experienced the excitement of these new inventions coming from such humble beginnings. I felt very excited when I found out that the creator of this booming KickStarted was from my hometown, Long Beach, CA. I may have even supported this project financially if I had found out about it earlier. Even if you do not know the person who you are backing, or if the creators do not know who the backers are, there is such a joy in finding out a project reached its goal and that you were a part of it. From this KickStarter, many gaming brands have started experimenting with the Oculus Rift. Maybe in the future, the Oculus Rift won’t just be used for video games either. There are so many possibilities when one of these inventions takes off, and this never would have been possible with out the idea of crowdfunding and getting a large number of people involved to make a huge difference in technology.
To connect back to our original definition of “economy,” people manage their own resources in this economy of ideas through the KickStarter community and bring about cultural progress and productivity for all to enjoy. This is what makes the internet such a great place to collaborate.
Read more about KickStarter’s “biggest hits” in all fields here.