The concept of crowdfunding is nothing new and has been used by civilizations since the beginning of time. The idea is simple, large numbers of people donate small amounts of money to a specific cause, idea, invention, or business. These small donations from large numbers of people can add up to a lot of money. When a person hits their funding goal they are then obligated to use the money for the specific project they claimed they were raising capital for. There’s a lot of different crowdfunding platforms out there and they all do things in a slightly different way, but the end goal is the same. The biggest problem with crowdfunding is the fact that only a small portion of projects get funded. In fact, some research suggests as little as 10% of projects get the adequate funding they need to realize their dreams. After a lot of study and research I figured out that the primary projects that get funded are the ones that are for a specific cause that people care about. Think of it this way, would you give your money to help someone start a business? Probably not, but you would chip in a little money to help someone start a homeless shelter. In fact, I can just look at a campaign and tell you if I think it will be funded. Over the last few years there hasn’t been any big changes in the industry. Meanwhile, other industries such as transportation, overnight lodging, and online shopping have undergone huge transformations. Isn’t it time that the crowdfunding world had a giant breakthrough? When Uber was introduced it revolutionized the cab industry and forever changed the way people look at transportation. Since automobiles were invented cab drivers basically had a monopoly and could charge high rates without threat of competition. In fact, the cab industry is so regulated that the barriers to entry are very high making it hard to start your own business. In fact, when they found out about Uber stealing their business they went after the company trying to shut them down. Their argument was that Uber was unregulated and it was dangerous to ride in their cars. Uber cars are basically the cars of normal people who drive on the side to make extra money. Most of these people do not have a business license and use Uber to make extra cash after work. Unfortunately for the cab industry, the argument didn’t hit home to the average person who decided that government intervention in every aspect of our life was not necessary. Think of it this way, you don’t need special insurance to ride in a friends car. If they have the car insured then in theory you should be covered. Uber has a built in driver review feature so you can read about the person and their driving history prior to choosing to use them. With the cab industry, you have no idea who’s going to pick you up until the moment they show up. From my experience, I have more trust and confidence in the Uber drivers I’ve had over the cab drivers.
I think that crowdfunding is about to experience the radical breakthrough that a lot of other industries have experience in the last 10 years. Recently a company called SmashFund has announced that they will be releasing a new social crowdfunding platform that will revolutionize the industry once and for all. Basically, the platform will combine the best aspects of crowdfunding, social media, and revenue sharing. The revenue sharing piece will help the platform grow because it will be picked up and promoted by internet marketing experts. If you give people the ability to get a cut of the profit they will do a lot of the growing for you.