Cognitive Design

Instead of begging friends, chasing a grant, pitching a VC or making a presentation to the board for funding you can use crowdsourcing to get capital for your brilliant idea.  Crowdfunding uses a internet-based microfinancing approach to pitch the crowd collecting many small promises to fund.

Many crowdfunding sites have sprung up. Some focus on specific types of ideas, for example RocketHub funds projects in the creative arts, while others such as KickStarter are general purpose.  Some sites extract a fee for funded projects (5-7%) but otherwise there are no costs.  Amounts raised seem small but often happen quickly. For example, Diaspora raised $10K in 39 days.  The model is even being tested as a funding mechanism for scientific research – see FundScience.

From a cognitive design perspective the micro financiers  are getting a kick (intangible value or mental energy) from helping to fund an innovative idea.  You can select the projects to fund, monitor its progress and in many sites have to pay nothing unless it is fully funded.   For little to no financial investment you can have the pleasure and satisfaction of supporting dreams and make the world a better place through innovation. A good deal. But the effects go deeper. As Lawton and Marom point out in their book: The Crowdfunding Revolution:

 ”Even as exciting, is that crowdfunding links funding with the social dynamics and affinity groups which naturally surround efforts that resonate with our many motivations. That alone, is enough to cause a monumental shift in the way business and organizations operate.”

Interested to hear from readers that have used crowdfunding.

This entry was posted on Thursday, December 9th, 2010 at 5:39 pm and is filed under Books, Service Innovation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.