The Wonderful Madness of Crowds
K. Mike Merrill is the world's only publicly traded person. In order to allow shareholder control of his life he had to develop his own system at KmikeyM.com. He works on projects in various forms with many people, all guided by the gentle hand of his shareholders who have invested their money and time to add accountability and expertise. Currently he is obsessing over his new company, Chroma.io, and coping with a crippling magazine addiction while still maintaining a full time relationship with the internet.
Will Self argues that crowdfunding is doomed. He says eventually the crowd will wise up that people are really just begging for money. His argument is based on someone who was given too much money for a silly project and he argues that eventually a few projects will claim the majority of funding and that will be peak crowdfunding and “the whole thing will collapse in a puff of pixels.”
The only problem with his argument is that he is wrong.
I would agree that we are in the heady days of crowdfunding and collectively still pretty giddy at the possibilities. I would agree that we may reach a high point of money invested in crowdfunding campaigns and then a leveling off. But I would bet Will Self an apple pie that crowdfunding will not collapse and is here to stay.
First, the idea that crowdfunding is begging is false. Many campaigns are for pre-purchasing a product a service. They usually have additional rewards like t-shirts and whatever. And they are project-based pursuits with defined parameters of success. His other examples of investor based equity crowdfunding is an investment. Unless Will Self thinks Apple is “begging” by offering it’s shares for sale on the market, then this is not begging.
Secondly, it’s a poor comparison. If we were more generous and accepted his comparison we’d have to point out that begging still exists. If crowdfunding is just begging then why would it “collapse” any more than actual begging does? Charity’s and non-profits have been begging for a long time, and in fact have started using crowdfunding as a fundraising tool.
Crowdfunding is easy to sneer at and poke fun of. It funds people making potato salad, apple pie, and enables people to make more horror movies that we really need. But the idea of blaming the funding mechanism for the ills misses the powerful point of crowdfunding. No one sits at their computer and says to themselves, “Where can I spend my crowdfunding money today?”
The crowd part of crowdfunding needs to either pre-exist, built on a reputation the crowdfunder has built over time, or be a project that inspires and moves people. Proclaiming that crowdfunding must be reaching its peak because an apple pie project received too much money is like saying that television must be about to die because Two and A Half Men gets good ratings. Just like television is in a golden age thanks to the distribution methods of the internet so is crowdfunding allowing for a golden age of project-minded people to pursue ideas they never could have done otherwise.
I don’t see these people as beggars, I see them as people looking to accomplish bigger projects with the help of people all over the world. I find it incredibly inspiring and I love seeing the odd and occasional weird project get over-funded. There is a sense that collectively we can participate in the ideas of other people and that our reputation as creators means we have better chances of pulling off the next big project.
Image credit: Carlos Amarillo/Shutterstock
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