Crowd Funding Sustainability
I hate when a band I like breaks up, or when a company whose products I use goes out of business. It’s discouraging to think that so much around us today is unsustainable and will soon be forced out of existence.
Color, the iPhone photo app, proved that even with $41 million in seed funding, it couldn’t garner success. Dispora, the Facebook alternative, proved that even with the general consensus that open was better, success was not guaranteed. So many products today are built on hopes. Like the hope that markets will shift to cater to a new technology standard, or better yet, that new technology standards can shift the markets.
It’s fine to hope for these things and make every effort for them to work out, but as a consumer, the fickleness of unsustainable ventures is unsettling. So unsettling in fact that I’m beginning to fully appreciate Kickstarter and the crowd funding movement, not for what it is, but what it produces.
I backed my first Kickstarter project in 2009. A band I knew needed to raise something like $2500 to record their first EP so I pitched in what I could. Doing this, I knew exactly what I was paying for if the project was a success. I wasn’t promised that the band would be around for X number of years. I wasn’t promised anything beyond a one time, 5 song EP, and that’s what I got.
Sustainability isn’t sexy. I can’t remember ever seeing a bullet point advertising a company as financially sustainable. Though, that’s what we’re all hoping for and assuming when we start using a product. Did you consider which music, TV, or movie service to use based on the company’s financial records? After a bit of thought I decided to use iTunes to purchase digital movies, not because they’re superior to Amazon, but because Apple has over $130 billion in the bank and I assume they’ll out live Amazon in a worst case scenario. Is Amazon or Barnes and Noble the better choice when buying digital books? I’m tired of having to choose a horse in the race, only to later have to switch because the horse I chose died.
Crowd funding, mainly, solves the problem of sustainability, or at least sets expectations in line with reality. If the online read-later service Instapaper shutdown right now because the creator, Marco Arment, would rather focus on his new venture, a lot of customers who paid for the app would be outraged. Not for any other reason than they assumed that paying for the app meant it would never go away. Even though that assumption is clearly misguided.
Kickstarter, The most popular crowd funding service has funded over 80,000 projects and they don’t appear to be slowing down. This isn’t a fad or just a new trend. I think people, consciously or not, are tired of picking a service only to have it disappear. They’re tired, like I am, of not knowing which product to invest time into and which one won’t make it. At least when you contribute to a successful crowd funded project, you have a better idea of what you’re getting.