Wisdom of crowds?

Kickstarter campaigns have generated a lot of hypertext in the past few years; phonemic accent on hype. For the uninitiated (where have you been living? in a cockerel’s boot?), Kickstarter is a crowdfunding company that enables a network of users to pool their money to fund projects. Sounds like a great idea; so great in fact that Kickstarter seems to have become one of the first considerations when looking to fund a concept or invention.

There seem to be two problems with crowdfunding as it takes its initial infant steps into the business arena. Firstly, the combined intellect of the crowd can’t decide what is a good or bad business idea. Secondly, very few of the people running large Kickstarters have any idea of the amount of funds required to finish the project, and the probable time-scale to delivery. There are some very smart people running Kickstarters making some very dumb business decisions and trying to cut corners. It may have been a pain in the tuchas years ago when Mr Pat Pending had to go to a bank or lending institution and convince the business loan manager to give him some money. This ordeal had some useful procedures the applicant had to go through however. The most important of these was a meticulous business plan along with proof you had legal advice regarding patents, copyright etc. Pat also had to show he had some capital, or at least some assets, he was putting into the venture. Banks don’t like putting their whole ass on the line, they prefer touching cheeks in case it all goes wrong and they’re not the only ones with a bum in the air. Many Kickstarters like funders to bear the bulk of the monetary weight, including providing seed capital for initial planning and research (which is often just the Kickstarter launch itself so as to gauge interest in the project).
A counter-argument is that people can put their money into whatever they feel is a good project.

Good ideas and good products don’t always go hand in hand though. This is best illustrated by Ouya, the Kickstarted games console, which was one of the most successful projects on Kickstarter. Most tech experts consider it a failure however, with out of date components, a flimsy joypad and less than stellar sales figures. To date only a handful of Kickstarted businesses have actually shipped products. The most successful Kickstarter, the Pebble watch, did ship products earlier in the year. Unfortunately most of those products were sent to a major retailer instead of the original backers, much to their annoyance. The problem seems to be it’s too easy to set up a Kickstarter and worry about the details later. It would be nice if Kickstarter offered maybe some business, legal or just general advice to people in exchange for their 5% cut.

There are many successful smaller projects, mostly non-tech, where Kickstarter has proved useful. It would be a shame if these more artistic and creative projects were impacted by the probable backlash against crowdfunding in the future. The crowd doesn’t always have the wisdom to back a winner. Remember when everyone wanted Arrested Development back? We should all be careful what we wish for, however amazing it sounds in theory. Hopefully Kickstarter won’t evolve into a device that just facilitates people getting their fingers burned.



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