The Hidden Upside of Crowdfunding?

Reader Noah Dentzel claims that crowdfunding has overlooked virtues, and that it is giving rise to products that may never have happened via the traditional business model:

Most companies either a) raise money through traditional financing avenues or b) build a business slowly and invest first and then bring a new product to market. Crowdfunding allowed us to do everything backwards: by pre-selling a product before the tooling for it even exists, we get a good feeling for market demand and we then gain a clear picture of whether or not to move forward.

Meanwhile, because companies like us are financed through consumers (pre-selling), it’s essentially consumer driven business growth and innovation. We don’t have to wait around for angels or VCs, we can allow anyone from around the world (and a good third of our orders are from overseas) to invest in new ideas, new businesses and whatever will be crowdfunded next. What’s also pretty cool is that we’re making this product right here in California which isn’t too typical for a consumer electronic device these days. People ask why we’re not doing it in China and I just tell them that both in terms of quality and cost, we couldn’t afford it if we wanted to–these are some of the twists and turns that you see in the Crowdfunding consumer product long tail of manufacturing.

Check out Noah’s project here. Crowdfunding can, of course, also give rise to products like this.


Seminymous Coward

Out of the two, I think the Puppy Cow is the better crowdfunding success story for illustrating projects that would be nearly impossible without it. Noah's card-shaped cable seems much more like something that could make it through a traditional manufacturing process. Puppy Cow is an extremely quirky item with a niche audience.

There's nothing wrong with a more easily mass-marketable product, and I don't object to their being crowdfunded unlike some others. Crowdfunding has other benefits besides expanding the range of feasible projects. As an example of that aspect, though, Puppy Cow is superior.

Fred Schechter

As someone participating in the same sort of thing. Crowdsourcing, (and the "Pre-selling" aspect is very useful). Our company makes electronics for cars and auto racing http://autosportlabs.com/ We've been doing it for a few years. To launch our latest project we've taken this exact route. All our products are made in our shop in Seattle Washington. To skip the long route of funding and the like crowdsourcing has been the option. With the latest changes from kickstarter (they no longer allow automotive based projects), we found Indiegogo.com to be the perfect partner. They've been wonderful in responding to our questions and have answered every question and issue about the process. Most of all we've been able to pre-sell a product we've been racing and testing for over 2 years. While many fund development/final engineering, we are pushing a product we've completed out the door with the help of Indiegogo.
Finally, shameless plug, if you drive race cars (or want to) and want to improve, our Race Capture Pro system http://www.indiegogo.com/RaceCapture is designed to help you collect and learn from your data to drive better and faster.
The funding models have really opened up, this is one option that doesn't require begging and borrowing from friends, family, neighbors, and more than that, provides a stable platform that proves market viability out of the gate.

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James

Having looked at both project websites, I'm more than a bit confused. I understand the PuppyCow (even though I wouldn't want one), plus it has a nice blurb explaining what & why the maker thinks it will sell. The other? Well, one end is a USB cable, but what's the other for? Site doesn't explain much...

frankenduf

wonder if u could have crowdfunded movies

Noah

James,
ChargeCard is a USB cable for charging your phone. The iPhone version functions just like the white USB cables used for charging and syncing iPhones, and the Micro USB version functions just like the black USB cables used for Androids and other Micro USB devices. Being the size of a credit card, it stows easily into your wallet. Think of it as a jumper cable for your phone.
Noah

James

But the non-standard USB end is nothing at all like the USB connector for my phone. Or for my cameras - which are different from the phone, and from each other - or the music player. I think the GPS unit does match one of the cameras, though. Why not go a little further, with several rubber tongues on the other end to match different devices?

I'm also puzzled as to how you would get the standard USB end to be the thickness of a credit card, when it's as thick as (let me check) 6 cards. Is it spring-loaded somehow, so that it pops out when you flip the rubber tongue out? I do think you'd benefit from more write-up.

Seminymous Coward

I can't exactly tell which end you think is standard, so I'm going to talk about all 3 possible plugs. To make sure we're on the same page first, the flexible end is the one that connects to the computer/charger, not the one that connects to the phone.

The flexible part ends with a USB A plug's inner contacts and the plastic tongue that keeps them in place; it'll go in any normal USB A receptacle. A similar design is used on some very small flash drives and likely elsewhere. To my knowledge this is technically non-standard, but they work in normal ports because they include the same contacts in the same places, omitting only the metal sheath. That omission is both perfectly safe (if slightly less sturdy) and a key to the Charge Card's thinness.

The iPhone version uses a proprietary connector Apple made up. It fits in various i-devices, though not the latest versions.

The Micro USB version includes a Micro-B USB plug which appears fully compliant with the specification. If your phone is a remotely recent non-Apple smartphone, it will take a Micro-B plug; many lesser phones will as well.

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Anne Flournoy

I just learned of a new crowdfunding site geared for film/video production called SeedAndSpark.com. Seems really well thought-out, involving the 'funders' more than by extracting a credit card number from them.