Has anyone noticed that crowdfunding is not just about a bunch of young aspirationals looking for cash? What started out as a way to democratize innovation and access to capital, is now a sweet way for well-established companies to play at being a "startup."
Why would you want to play at being a startup when you're not? "There are so many good reasons," said Bruce Bornstein, President and CEO of Aftershokz, makers of well regarded open-ear bone conduction headsets. "Expand our visibility, get consumer feedback in product development, raise money without dilution, offer a presale of new product, the list goes on."
TrackR, a small business that makes a geolocation tag that is used to locate missing items, began their crowdfunding campaign only after they had a heritage of five reasonably successful products that were already on the market. The campaign was highly successful, bringing in $1.2 million dollars towards the development of the Trackr Bravo. The company has earmarked the money to help with app design and improvements, production tooling, creating better antennas, and overall hardware and firmware improvement. While it hasn't been a perfect ride (many backers are still awaiting shipments according to the website), the company says that having a proven track record and a manufacturing process already in place were keys to success.
And it's not just small businesses dabbling their toes in crowdfunding. GE (yes, that GE) recently launched a wildly successful Indiegogo campaign for its Paragon product, a sexy looking induction cooktop for sous-vide aficionados. Paragon comes by way of a GE subsidiary called FirstBuild. On its Indiegogo page it writes, "Crowdfunding on Indiegogo gives us the opportunity to validate that a cutting edge group of early adopters wants Paragon before we make hundreds of thousands of them."
At Adobe's annual summit in 2014, Kickstarter's Yancey Strickler took the stage and evangelized how crowdfunding can capture the spirit of creating a relationship between company and its would-be owners. He marveled at the more frictionless way of getting products to market, citing examples like the Pebble smartwatch, the first civilian space suit and the famous restoration of the Veronica Mars franchise. The mantra: Community is a more exciting metaphor than customer. Taking people along for the ride, he intimated, is a much loftier process of creation than just making it and putting it out there.
While the first wave of crowdfunding devotees were mostly startups looking to crash through the barriers to entry, the next generation of crowdfunding companies may be larger ones looking to capture that same entrepreneurial spirit.
Robin Raskin is founder of Living in Digital Times (LIDT), a team of technophiles who bring together top experts and the latest innovations that intersect lifestyle and technology. LIDT produces conferences and expos at CES and throughout the year focusing on how technology enhances every aspect of our lives through the eyes of today's digital consumer.