In last December I wrote about the concept of crowdfunding as a potential solution to raise capital and financial support for a golf course. Of course this idea is not limited to golf courses. From the Finnish example we can see crowdfunding is working in reality. At the very same time many of my friends have/had doubt why would people finance those people's project that they have not met or seen. I think it is a very healthy question to ask. This can be for many reasons. For some of them it is like charity or simply want to contribute to other people's passion.
2012 was a very successful year for the crowdfunding industry. The crowdfunding industry grew by 125%. According to massolution, crowdfunding platforms raised 2.7 billion USD and successfully funded more than 1 million campaigns in 2012. Just in North America crowdfunding volumes grew 105% to $1.6 billion. In Europe crowdfunding volumes grew 65% to $945 million. Donation- and Reward-based crowdfunding was the most popular crowdfunding model, it grew by 85% to $1.4 billion.
Here comes an example how crowdfunding can help to raise product awareness, but also money for a smart product, in this case for Game Golf.
Game Golf (see video below) uses accelerometers, gyroscopes, global navigation system (GPS), and near-field communications to track the location of your shots, the distance the ball traveled, and which golf club you used. Then it syncs that data to the cloud, and you can look at the results on your smartphone and then share them with your friends.
They planned to collect 125,000 USD in 30 days (it is important to have a clear and transparent funding goal and deadline). To my great surprise, within 6 days they have exceeded their objective and raised: 141,979 USD. It is amazing!! 755 people gave this donation for Game Golf on Indiegogo.
As you donate more, the fundrasers will give you special rights and perks. For instance if you donate 500 USD, then you wil get a special limited edition GYG device signed by Graeme McDowell, includes a 1-year subscription to the GAME platform (each company will use different perks for your contribution). In this case if you give 5,000 USD, then you will be able to participate in product development.
As of today 2 people gave 5,000 USD (in total 10,000 USD). So if you believe in someone's idea then you will have the chance to join his/her business to shape the product/service's future.
At the same time, those who would like to utilize the power of crowds by utilizing crowdfunding, I would recommend them to ask from themselves (in many other social media project these questions have to be answered honestly):
- are you ready for such transparency?
- are you willing to communicate with those people who want to help you…even when something goes wrong?
- do you have resources to manage this project? (e.g. community management, video development etc.)
- can you offer people exciting give-backs (Offer different perks at all different levels.)?