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Business and Finance

Standing up for crowdfunding

Kate Russell
Does crowdfunding offer up an unfair shortcut to success? No - here's why.

I get pretty annoyed when I see people criticising technological advances without any foundation. For the most part it’s born out of fear of the unknown, or an unwillingness to welcome change and progress into their comfortable lives. But when a newspaper trash-talks innovation and ingenuity, like this Metro article slamming a science undergraduate for having the audacity to crowdfund her education, it can have a negative impact on the world.

The journalist’s objection was that Emily-Rose Eastop was getting ‘something almost totally free’ instead of having to work a part-time job or tap into the ‘bank of mum and dad’ like everyone else. For starters, as someone who is still fulfilling the campaign promises for my own successful Kickstarter 18 months ago (to write a sci-fi novel, Elite: Mostly Harmless, which is out now on Amazon, thanks for asking!), I can tell you it is a long way from getting something for nothing.

Use it or lose it

On reward-based platforms, backers are essentially paying in advance for whatever you’re selling. This helps many truly innovative products and services come to market when traditional finance avenues – like banks and investors – might not be open to them because the market is yet to be proved.

There are equity based-platforms too, where backers are rewarded with shares like any normal investor, and for charity work platforms like Just Giving are available. But in Emily-Rose’s campaign on Hubbub, she is actually committing to writing and publishing regular content based on her degree course, and her backers, familiar with her dedication and writing abilities because of her existing (unpaid!) work running a Facebook page that debunks science myths, are happy to pay for it. 

So where exactly is the sin in this? Emily-Rose could play by the rules of the system; get a job at Wetherspoons and rack up tens of thousands of pounds worth of debt she will spend years paying back (with interest) once she graduates. But instead she decided to see if her writing skills could provide an income.

Despite the fact I’m willing to bet there isn’t a publisher on the planet that would have given her a £26k advance, she now has a job – producing content from her master’s degree to share with her readers. And who knows, without the yoke of debt around her neck maybe Emily-Rose will go on to do something really important with her education. Or she might inspire the next Nobel Prize winner with her science blogging.

The wisdom of the crowd

I believe that crowdfunding represents an opportunity for us to take back control of the entertainment content we are served. The highest funded project in any category right now is video game Star Citizen, which has so far made more than $53m against an original goal of $2m.

The campaign still runs independently on the game developer’s website and is earning additional pledges of between $1.3m and $3.7m each month. When you look at movies, there are currently over 800 projects live just on Kickstarter alone. The highest funded so far was The Veronica Mars Movie project, which made nearly $6m against a goal of $2m.

Music is also well represented. Amanda Palmer crowdfunded her tour and album and made over a $1m against a goal of just $100k. Not so much crowdfunding, but crowdsourcing an audience: Welsh high school student Beth Reekles was 17-years-old when she got a three-book publishing deal in the US last year after getting more than 19 million views when she posted her first novel, The Kissing Booth, online at the story-sharing site Wattpad.

In many ways crowdfunding is a return to Shakespeare’s days of patronage, only the patron is fragmented into hundreds, perhaps even thousands or millions of backers on the internet. The artist sets a target – the lowest amount they want to be paid for their time – and anything over that is a bonus. 

In the case of the above examples, they knew they had hits; achieving earnings in the millions during the period of their campaigns. That’s not common – but then neither is earning millions as an artist under today’s system of copyright. For others, like Beth Reekles, great success might come after the completion of the campaign, with the content taking off across the world once people get the chance to experience it. For some, like me, success will most likely be moderate. Very many more people will never achieve their crowdfunding goals at all and fade into obscurity despite their creative ambitions… so a lot like it is today all round, really.

If we embrace crowdfunding, I believe we have the potential to bring the power of choice over what we watch, listen to and read back into the hands of the people, instead of it being something that is decided by a soulless financial algorithm designed to assess the potential return on an investment.

Kate Russell is a technology writer and reporter. She is author of Working the Cloud, a business book about the internet and Elite: Mostly Harmless, her debut science fiction novel based in the gaming world of Elite, which achieved over 400% of its funding goal on Kickstarter. Image credit: CC xpgomes6.

Crowdfunding helps many truly innovative products and services come to market when traditional finance avenues - like banks and investors - might not be open to them



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