Technology Analysis 1: Crowd funding

Crowd funding is one of the latest methods of raising awareness of specific projects, which uses emerging technology. Crowd funding has had a huge impact on the internet; there are massive projects worldwide that have been successfully initiated that have gained a lot of funding. Crowd funding is the usage of a large number of participants who contribute together towards a specific project using the internet. There are three core elements in creating a crowd funding project, which are the idea, the platform and the people. Each of these elements plays an important part within the circle of the crowd funding.  There are many types of crowd funding projects, such as fundraising for medical treatment.

There are four main types of crowdfunding and they are as follows:

Equity based: people investing in a company and becoming a shareholder, from which they can receive shares of profits.

Donation based: people contributing to a cause they wish to support, financially or in other ways such as volunteering e.g. the effort of the student Army, which helped people to clean up the liquefaction after the Christchurch earthquake.

Reward based: people give money to a business so that they can get some type of “reward” from the company which could be a product or service; for example Kickstarter.

Debt crowdfunding: People lend the company money as a loan, which must be paid back according to the contract. The lenders do not become shareholders.

Pebble e-paper watch is one of the most successful projects worldwide up to date. This project was on Kickstarter. The company set out to raise $100,000, by producing a customisable product, a watch, and their end result was that they raised over $10, 000,000. Now they have to be able to produce and supply this product.

Giveitlittle.co.nz has helped a lot of people throughout New Zealand. An example of one of their successful projects made via this website is supporting two children after their mother has passed away from cancer. Her death left the two children with a huge debt of $175.000 dollars including her medical treatment bills. This crowd funding has funded so far 50.000 dollars from 800 participants within only 3 weeks. This is an example of how quickly funding can be raised. This website can be of great use for people in such emotionally charged positions. One weakness of continuously using this emotional strategy is that it can become too frequent, and people may start to be less effected emotionally, and donate less.

Veronica Mars Movie was one of the biggest crowd sourcing projects with aimed at raising $2 million dollars to produce the movie; however, the movie made almost $6 million. The source of the funding was the fans of the TV series, who contributed so they could see the movie. This was a good strategy for the movie production team as they didn’t have to pay for the production costs while making the movie. It was revolutionary, and may become a project for other movies to be made. The problem may occur when fans pay for a movie to be produced, but then don’t like the end result once the movie is made. This could have a negative effect on the movie and on crowd funding. 

Form1 is a project to raise funds to develop a 3D printer that is affordable enough for people to buy to use in their homes. They set out to obtain $100, 000 but they actually got $3 million. This project may be extremely beneficial in the future if they are able to realise their goal of giving the public access to a 3d printer for personal use. The only negative thing is that people might use this technology to produce things that may harm society, such as guns, without any regulations, monitoring and licensing.

Double Fine is a computer game, that achieved great success in a limited amount of time, as it only took 8 hours to get the total funding they required. The final amount raised was $3.3 million. This was an excellent result for this project. This amount of money, may mean that other games can also be developed, so contributors may gain additional benefits from continuous new game production or game updates.

There are many great potential opportunities to use crowd funding.  The first potential of using crowd funding is that the internet allows you access to unlimited numbers of potential contributors that you would not normally have access to with a good range of responds. This can lead to have an access to the capital, which is the main reason of the crowdfunding. 

Also this application has a huge potential to many participants because it does not cost anything to the invertors to present their products or services. 

The second potential is the speed in which you can access contributions e.g. 8 hours. These shows that this application has enable the world to be a flat world, where you can have an access to millions of people within a very short period of time more effectively. 

Lastly, raising awareness and feedback is one of the great potential using crowdfunding. This is can help to create a brand awareness before you can set up the business as well as making it attractive to the maximum number of people. Also this can lead to have positive and negative feedback, which will beneficial to the product or service funding for.