Crowdfunding has become a popular way for people with an idea to make money by creating a product and selling it to the public using money invested by a lot of strangers. But more technically, it’s described by Forbes’s Magazine as the “practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.” Web sites such as Kickstarter and Indiegogo have become household names, despite the fact that just a tiny fraction of the population actually create and post successful projects on such sites. Also, little reported, is the huge impact that crowdfunding is having on accelerating the pace at which new technology is developed and brought to market.
Quite simply, crowdfunding allows people to create products from ideas they dream up-products that they would never have been able to build prior to the Internet. Before the advent of the Internet and crowdfunding sites, the only way regular people could get funding was to draft a proposal and try to sell their idea to people with money who were looking for an investment vehicle. The problem was, such people were not only few and far between, but only were willing to invest in projects that were close to fruition and showed promise as a viable marketing option. With crowdfunding, all that has changed, and because of that new technology based ideas are springing up, getting funded and are produced and sold in extremely short periods of time-in record numbers.
Some have even suggested that crowdfunding has become a source of new development of technology itself, allowing for new technologies to come in to existence that wouldn’t have otherwise. One example is the Brydge, an external keyboard created specifically to attach to an Apple iPad. Apple announced it would not be developing a keyboard for its popular tablet computer, so a group of people got together and created one, posted their idea to Kickstarter, and got rich selling millions of them to users. Another is the impact that crowdfunding is having on the Interactive Entertainment industry. Just last year the U.K. Association for Interactive Entertainment (UKIE) published a report suggesting that crowdfunding has become the main source of funds for development, trumping more traditional forms of venture capital funding.
Perhaps even more remarkable, it doesn’t appear that crowdfunding is slowing down, suggesting that in the near future, the brightest ideas and products may just come from regular ordinary people, who just happen to have a great idea.