Crowdfunding is a powerful tool. It unlocks opportunities, enables news products to reach interested buyers, solves problems, drives business models, and creates customers, supporters and fans.
Crowdfunding is a very human way of doing business. As with crowdsourcing, the notion of sharing concepts to collect ideas or to solve a problem is a very human behavior. We all instinctively know that it’s good to ask others for their thoughts when we’re stuck, lost or confused. Crowdsourcing enables those pleas for help or ideas; it’s just a little more organized than simply calling friends or shouting out: “does anyone know how to do this?’”
At various points in our lives we have all used the power of the crowd, and that’s exactly what crowdsourcing and crowdfunding is.
One of the very best examples of crowdsourcing was its role in solving the problem of longitude. It all started in 1707 following one of the largest British naval disasters in history. Up to two thousands sailors, including Admiral of the Fleet Sir Cloudesley Shovell, lost their lives against some small jagged islands off the west coast of England called the Isles of Scilly. The reason? Nobody yet had a way of telling their precise longitude at sea. In the 1700s, sailors could calculate latitude based on the stars, but longitude could not be determined out of the sight of land. As a result, the British Government established the Longitude Board in 1714 and offered: “A Reward of Sum of Ten thousand Pounds, if it Determines the said Longitude to One Degree of a great Circle, or Sixty Geographical Miles: to Fifteen thousand Pounds, if it Determines the same to Two Thirds of that Distance, and to Twenty Thousand Pounds, if it Determines the same to One half of the same Distance”. After crowdsourcing the problem, British clockmaker John Harrison (1693–1776) ultimately stepped up to the challenge with the invention of the chronometer.
Transforming crowdsourcing into crowdfunding by turning to the masses for money is also nothing new. Historic expeditions, explorations and scientific research projects were commonly funded by petitioning. In more modern times, one popularly quoted example of crowdfunding succeeded in 1997 when British rock band Marillion asked its fans to contribute to raise funds for the band’s US tour – raising $60,000. A few years later, the world was introduced to ArtistShare – the first fan funding, or crowdfunding, platform.
Over the past two decades the concept and the creation of online crowdfunding has grown exponentially. If you’re just at the beginning of your journey, you’ve likely sat down to explore your options and found yourself with a headache. There are literally hundreds of sites to choose from, with thousands of differing audiences, fee structures, legalities, rules and benefits.
Want some advice on how to best get your crowdfunding launched and running successfully? Then join our upcoming online workshop: ‘Planning a rewards-based crowdfunding campaign? 13 things to avoid so you don’t screw up your own crowdfunding campaign’ on October 13, 2017.