Technology Analysis 1: Crowd Funding by Waylon Kenning

Definition of Crowd Funding

waylon — 2015-07-26 20:16:58 UTC

Crowd Funding is defined as “a collective effort by consumers who network and pool their money together, usually via the internet, in order to invest in and support efforts initiated by other people or organizations” Ordanini, A., Miceli, L., Pizzetti, M., & Parasuraman, A. (2011).

References and Attribution

waylon — 2015-07-26 20:36:55 UTC

Ordanini, A., Miceli, L., Pizzetti, M., & Parasuraman, A. (2011). Crowd-funding: Transforming customers into investors through innovative service platforms. Journal of Service Management, 22(4), 443-470. doi:http://dx.doi.org/10.1108/09564231111155079

Classes.dma.ucla.edu,. (2015).Crowdfunding: The 4 Types. Retrieved 26 July 2015, from http://classes.dma.ucla.edu/Fall14/161/projects/nicholas/4-style/Types.html

YouTube,. (2015). What is Crowdfunding? CrowdFunding planning? What, How, Why and when. Retrieved 26 July 2015, from https://www.youtube.com/watch?v=8b5-iEnW70k

Words for the tagcloud background from Wikipedia,. (2015). Crowdfunding. Retrieved 26 July 2015, from https://en.wikipedia.org/wiki/Crowdfunding

Tagcloud created by Waylon Kenning at Tagul.com,. (2015). Crowd Funding. Retrieved 26 July 2015, from https://tagul.com/show/bihk4ou2hur3/Crowd%20Funding

Idealog,. (2015). How crowdfunding platform Spark My Potential has grown from babysteps to setting high industry standards. Retrieved 26 July 2015, from http://idealog.co.nz/venture/2015/02/how-crowdfunding-platform-spark-my-potential-has-grown-babysteps-setting-high-industry-standards

Diallo, A. (2015). Crowdfunding Secrets: 7 Tips For Kickstarter Success. Forbes. Retrieved 26 July 2015, from http://www.forbes.com/sites/amadoudiallo/2014/01/24/crowdfunding-secrets-7-tips-for-kickstarter-success/

Spence, E. (2015). Pebble Has Not Destroyed Kickstarter. Forbes. Retrieved 26 July 2015, from http://www.forbes.com/sites/ewanspence/2015/03/06/pebble-time-crowdfunding/2/

Indiegogo.com,. (2015). Retrieved 26 July 2015, from https://www.indiegogo.com/projects/jibo-the-world-s-first-social-robot-for-the-home#/story

Suleman, K. (2015).Jibo the social robot gets $300k funding in 24 hours.ITPRO. Retrieved 26 July 2015, from http://www.itpro.co.uk/desktop-hardware/22718/jibo-the-social-robot-gets-300k-funding-in-24-hours

Gannes, L. (2015).Jibo Raises $25.3 Million for Hotly Anticipated Home Robot.Re/code. Retrieved 26 July 2015, from http://recode.net/2015/01/21/jibo-raises-25-3-million-for-hotly-anticipated-home-robot/

CAMPFIRE（キャンプファイヤー）,. (2015).伝説のポートレイトレンズ・Petzvalをボケ調節機能を備えた58mmレンズに！ - CAMPFIRE（キャンプファイヤー）. Retrieved 26 July 2015, from http://camp-fire.jp/projects/view/2297

Kickstarter,. (2015).The Lomography New Petzval 58 Bokeh Control Art Lens. Retrieved 26 July 2015, from https://www.kickstarter.com/projects/lomography/the-lomography-new-petzval-58-bokeh-control-art-le

Snowballeffect.co.nz,. (2015).Invivo - Back a Kiwi Business on Snowball Effect. Retrieved 26 July 2015, from https://www.snowballeffect.co.nz/invivo

Idealog,. (2015).UPDATED: Invivo Wines smash $500k target - Equity crowdfunding + brokers = unexpected. Retrieved 26 July 2015, from http://idealog.co.nz/venture/2015/03/equity-crowdfunding-brokers-unexpected-invivo-wines-brings-big-guns

Indiegogo.com,. (2015). Retrieved 26 July 2015, from https://www.indiegogo.com/projects/kreyos-the-only-smartwatch-with-voice-gesture-control#/story

Indiegogo Help Center,. (2015).Fees & Pricing. Retrieved 26 July 2015, from https://support.indiegogo.com/hc/en-us/articles/204456408-Fees-Pricing

Limer, E. (2015).The $1.5 Million Indiegogo Smartwatch Horror Story.Gizmodo. Retrieved 26 July 2015, from http://gizmodo.com/the-1-5-million-indiegogo-smartwatch-horror-story-1625043836

Type of Crowd Funding

waylon — 2015-07-26 20:58:30 UTC

From

Classes.dma.ucla.edu,. (2015).

http://classes.dma.ucla.edu/Fall14/161/projects/nicholas/4-style/Types.html

What is Crowd Funding? - A video

waylon — 2015-07-26 21:01:57 UTC

From

YouTube,. (2015).

https://www.youtube.com/watch?v=8b5-iEnW70k

From consumers to funders

waylon — 2015-07-26 21:07:07 UTC

Ordanini, A., Miceli, L., Pizzetti, M., & Parasuraman, A. (2011) notes "The idea that some people may decide to pay for producing and promoting a product (instead of buying it), and bear the risk associated with that decision, represents a further step in the evolution of consumers' roles, that involves a mix of entrepreneurship and social network participation."

Actors - Crowd Funding Platform

waylon — 2015-07-26 21:10:11 UTC

Ordanini, A., Miceli, L., Pizzetti, M., & Parasuraman, A. (2011) notes one of the three actors in crowd funding is the platform itself, which brings together the funders with those who need funding.

Actors - Funders

waylon — 2015-07-26 21:14:09 UTC

Ordanini, A., Miceli, L., Pizzetti, M., & Parasuraman, A. (2011) notes that funders are one of the three actors in crowd funding, financially supporting the project, taking on risk, and expecting output from the project.

Actors - Founders

waylon — 2015-07-26 21:17:52 UTC

Ordanini, A., Miceli, L.,Pizzetti, M., & Parasuraman, A. (2011) notes another actor in crowd funding are those with ideas and projects who want to be funded, and want to directly engage their consumers.

How do platforms define success?

waylon — 2015-07-26 21:41:12 UTC

"General Manager of the Spark Foundation, Lynne Le Gros told Idealog the biggest measure of the platform’s success is the number of projects successfully funded." Idealog,. (2015).

Founder's tips for success

waylon — 2015-07-26 21:46:49 UTC

Diallo, A. (2015) states a tip for success is "As with any sales venture, the first key to success is creating a product that people want to buy".

Most Funded Projects on Kickstarter

waylon — 2015-07-26 21:51:06 UTC

Link to the largest crowdfunding platform

Most Funded Projects on Indiegogo

waylon — 2015-07-26 21:52:00 UTC

Link to one of the other largest crowdfunding platforms

Most funded Projects on Camp Fire

waylon — 2015-07-26 21:52:53 UTC

Link to Japan's largest crowfunding platform

Successful Projects on PledgeMe

waylon — 2015-07-26 21:56:09 UTC

PledgeMe is a popular New Zealand crowdfunding platform

NZ Equity Crowdfunding

waylon — 2015-07-26 21:57:56 UTC

SnowballEffect has equity funding for NZ businesses

Significant Project - Pebble Time

waylon — 2015-07-26 22:09:17 UTC

Pebble Time is the most funded project on Kickstarter,

requesting $500,000 USD, and receiving $20,338,986 USD. The key to success was delivering a successful previous project, the Pebble. This gives confidence to backers of the project. This time Pebble had the capital it needed to make the watches, and was using this launch more of a marketing campaign, which attracted criticism. However, Spence, E. (2015) notes “There is nothing that says crowdfunding is not to be used when you have capital in the bank, there is nothing that says when you pass a certain level of sales you should be banned from these sites.”

Significant Project - JIBO Robot

waylon — 2015-07-26 22:20:32 UTC

JIBO is a social robot that was partially funded through Indiegogo, raising $3,710,560 USD states Indiegogo.com,. (2015). The original funding target was $100,000 USD notes Suleman, K. (2015). The credentials of the founder, Cynthia Breazeal, Director of the Personal Robots Group at the MIT Media Laboratory I believe contributed to the success of the project. It’s important to note that once traction was shown in the market, $25.3 million USD of Series A funding was received by the company states Gannes, L. (2015). This shows that crowdfunding can be combined with other funding types.

Significant Project - Petzval 58 Lens

waylon — 2015-07-26 22:37:25 UTC

Not all crowdfunding platforms are American. Each country appears to have its own crowdfunding platform, Camp Fire being the popular one in Japan. CAMPFIRE（キャンプファイヤー）,. (2015) lists the most popular campaign as the Petzval 58 camera lens. This raised $121,494 USD in Japan. However, the Petzval 58 lens was originally a Kickstarter campaign raising $966,312 USD as stated in Kickstarter,. (2015). The company behind both campaigns, Lomography, used multiple geographical crowdfunding platforms to raise money, and used these geographical crowdfunding platforms as sales and marketing platforms. This would improve fundraising by targeting local crowdfunding platforms that I believe people feel more comfortable with.

Significant Project - Invivo

waylon — 2015-07-26 22:44:54 UTC

Rewards and products are the largest category of crowdfunding platforms, however, equity raising is also popular. Snowball Effect is a New Zealand equity crowdfunding platform which featured the wine company Invivo. The funding target was $500,000 NZD for 5.9% of equity, and a cap of $2,000,000 NZD for 20% equity states Snowballeffect.co.nz,. (2015). The $2,000,000 NZD cap was enforced by the crowdfunding platform Snowball Effect. This was the largest equity raising in New Zealand using a crowdfunding platform to date states Idealog,. (2015).

Significant Project - Kreyos

waylon — 2015-07-26 23:28:04 UTC

Not all projects on crowdfunding are successful. Kreyos wanted to raise $100,000 USD to make a smartwatch with voice and gesture control in 2013 states Indiegogo.com,. (2015), and raised $1,502,533 USD in one month. The attraction was the price, $100 USD for the smartwatch. Of note was the choice of funding model. Indiegogo Help Center,. (2015) states there are two funding types on Indiegogo, Flexible Funding, and Fixed Funding. With Fixed Funding if the funding goal is not reached by the timeframe, all the money is refunded. With Flexible Funding, all money is received regardless of whether the funding goal was met. Kreyos therefore received all funding regardless of goal amount. However, Limer, E. (2015) points out the signs why this project wasn’t successful “Absurdly low budget goal, unrealistic promises, too-good-to-be-true price tag, all from an untested manufacturer”.