Crowdfunding has the power to bring about a funding revolution for the development of new inventions. By crowdfunding development costs, whilst simultaneously demonstrating demand for a product to potential partners, investors and retailers; new product ideas have an enhanced chance of success.
The idea was simple. Transform the iPod Nano into the world’s coolest multi-touch watch with a simple wrist strap. It seems straight forward enough, yet Scott Wilson, the founder of Chicago-based MINIMAL needed $15,000 to make it happen. Enter Kickstarter – the US crowdfunding super tanker. What happened next is nothing short of staggering. The TikTok project raised $941,578 from 13,510 backers in just a few short weeks.
Also in the US and another Apple accessory invention, Dan Provost and his friend Thomas Gerhardt have raised over US $137k (they only initially wanted to raise $10k!) for their remarkably simple, yet incredibly elegant and powerful idea: The GLIF – iPhone 4 Tripod Mount and Stand. The two young American entrepreneurs believed that the iPhone was the best camera they had ever owned but it could be made even better with a tripod mount and stand accessory; lots of people agreed with them. The overwhelming support from over 5000 backers was beyond their “wildest dreams” and has meant that they can turn the prototype into reality.
Dan and Thomas used Kickstarter to raise the money they needed. Visitors could pledge money to the project and effectively pre-order the Glif while it was still a prototype; funding further design, development and production.
Gretha Oost used crowdfunding to develop her brilliant idea to turn tap water into fresh water. The easy-to-use plunger mechanism contains a carbon block filter. One push removes any chlorine, unpleasant tastes and odours in an instant, leaving you with fresh, filtered water anytime you need it. Production has now started on Gretha’s 321 Water product.
By attracting a dedicating band of co-funders, inventors will benefit from valuable feedback and insight into the design and development of the product. Getting people engaged in the early stages of the development process can dramatically reduce costs in the long run; it also has the benefit of building a group of advocates to kickstart word of mouth and viral marketing through social networking websites.
Attracting funding for new inventions has always been notoriously difficult as many investors prefer to put their money in established products with proven concepts. The cost of patent, design, prototyping and testing can be prohibitive even for simple designs. A lean model funded by ‘the crowd’ can be the answer.
Using crowdfunding as an alternative model for raising seed funds for innovations and inventions is still in its infancy; but these three examples are blazing a trail that should make many other budding entrepreneurs and inventors struggling for funding sit up and take notice. It will still take a ‘eureka moment’ and a lot of hard work to crowdfund it successfully but it should now be considered a genuine method of raising seed capital.
If you have any other inventions that you think should be in the top three then please let me know.