Crowdfunding has such huge potential, but what is crowdfunding? It is a way for businesses and organizations to raise money for their ventures. The unique thing about crowdfunding is that the money usually comes not from investors, but everyday users who actually care about the product.
Crowdfunding is amazing because of the fact that there is next to no risk or overhead expenses. In most cases the businesses set a goal of how much money they want to raise. This goal is usually calculated to where if the amount of money they receive hits the goal, then all of their costs are covered. If they do not hit the goal then the money is returned to those who tried to fund the project and there is no harm done.
The potential for great things to come out of crowdfunding is high, but some projects just waste funders’ money. Crowdfunding’s greatest strength is also its greatest weakness. You don’t have to be rich or qualified to start a Kickstarter campaign. This enables people without money to pursue their dreams, and also promotes very innovative thinking. However, many developers bite off more than they can chew, promising a list of features that either can’t be done or take too many resources to pull off. This causes some fully funded projects to flop and fail to deliver on their promises.
Great things have come out of crowdfunding, you don’t have to dig very far to find all of the successes and wonderful products that were born from it. For example, the Oculus Rift is a fantastic item that exists thanks to crowdfunding. The Oculus Rift is a device that many have dreamed of. It allows a person to step inside a virtual world, using stereoscopic 3D to make you feel like you are in another reality. Their campaign raised almost $2.5 million dollars which were used to create this virtual reality headset. Almost 2 years later the company was then sold to Facebook for $2 billion dollars. This shows the power of crowdfunding. Especially when you consider that they received $2.5 million dollars to produce their product. Granted, some people donated enough money to where they would receive an Oculus Rift Developer Kit, and the company did have to build and send those out, however that cost is built into the goal for the campaign, which keeps it all profitable.
In conclusion, crowdfunding is a wild and exciting new opportunity for business and consumers alike. However, in its infancy it can be used poorly and outcomes don’t always meet expectations. The good however, does outweigh the bad, and in the end it is up to consumers to filter out the campaigns that should be fully funded and those that shouldn’t.
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Rebecca Patterson says
This company is going places, especially since it has been purchased by Facebook. There is only so much that Facebook can do with the company, but VR is the wave of the future, especially with video games.
I’m somewhat conflicted on crowdfunding because awesome stuff comes out of it like Shenmue 3 and Oculus Rift. However there’s some really bad stuff too. For instance, I recall a guy trying to turn a bar into a 2nd wave hipster hangout in the Fishtown part of Philadelphia. Instead of using his own money to do this as he was already a bar owner, he decided to make a really bad kickstarter campaign to raise funds. Most of the people who supported it were the gentrification crowd and the people who were against it were the people who live in the area already. At the end of the day I didn’t care too much but it just rubbed me the wrong way how douchey it was handled.
Another aspect of crowd funding is that gofundme has essentially become a way for people to pay for their medical bills. While it’s cool that people are at least able to get some funds together, it’s pretty depressing that people can’t pay their medical bills and either die or are riddled with debt.
Jennifer Black says
I would have to say that more than half of it is garbage and most of that never even makes it to production. That is too bad when you see the talent and creativity that comes in behind some of these products.
Susan Romano says
I have no problem if someone wants to get on social media and the internet, tell their story and beg for money. NOBODY has to give it.