KEPHART's Cindy Harvey, AIA builds upon what she learned at Elton Rivas' Urban Land Institute breakout session on crowdfunding. Gain a base knowledge of crowdfunding and crowdsourcing as well as how it relates to architecture, building and the real estate industry. Can't get enough? Read Cindy's full blog post on this subject at http://www.kephart.com/category/kephart-blog.
2. WHAT IS CROWDFUNDING?
• DEFINED – Collective effort of individuals who
network and pool their money, usually via
the Internet to support a wide variety of
activities including disaster relief, political
campaigns, startup company funding, free
software development, scientific research
and civic projects.
• WHO’S INVOLVED?
• The Initiator – people who propose
the ideas to be funded
• The Crowd - people who support the
proposal
• The Platform – the organization who
brings together the project initiator
and the crowd
3. • HISTORY – Is it a new idea? NO! In 1884 when
funding ran out for the Statue of Liberty’s
pedestal, Joseph Pulitzer raised over $100,000 in 6
months. More than 125,000 people contributed to
the Cause with most donations being $1 or less.
• INDUSTRY OF ITS OWN – and
growing
• 2010 – Crowdfunding Websites
raised $.89 Billion from members of
the public
• 2011 - $1.47 Billion
• 2012 - $2.66 Billion
• Projected to grow to $5.1 Billion in
2013
WHAT IS CROWDFUNDING?
4. • ROLE OF THE CROWD
• Each individual acts as an agent of the
offering, selecting and promoting the projects in
which they believe.
• Can be Donor
• Can be Shareholders
• CROWDFUNDER PERSONALITY
• Tend to be innovation oriented
• Seeks out new modes of interacting with firms
and other consumers
• Social identification and desire to be part of
an initiative
• Desire to be first to market with associated
payoff
WHAT IS CROWDFUNDING?
5. • BENEFITS
• Profile – Compelling project can raise a producer’s
profile and boost their reputation.
• Marketing – Initiators can show there is an
audience and market for the project; viral spread
• Audience Engagement – Constant Feedback loop
• Taps Wisdom of the Crowd to fund something
when Conventional Wisdom will not.
• RISKS
• Reputation – Failure to meet campaign
goals or to generate interest results in
public failure.
• Intellectual Property protection - Idea
theft and Plagiarism
• Donor Exhaustion – will it last?
• Regulation
WHAT IS CROWDFUNDING?
6. • PLATFORMS
• As of 2012 there were over 450 crowdfunding
platforms
• Platforms serve as “network orchestrators”
• Replace traditional intermediaries such as record
companies or venture capitalists. Focus on inclusion of
investors
• WHO’S WHO?
• Kickstarter – Largest funding platform
for creative projects. Treats funds as
donations. 5% Fee, $649M raised since
2009, Launched 42,000 projects
• Fundrise - Investment platform that lets
you invest directly in local real estate
• Rockethub - Now partnering with A&E
for broader exposure, leader in
crowdfunding education
WHAT IS CROWDFUNDING?
8. • DEFINED – The practice of obtaining needed
services, ideas, or content by soliciting
contributions from a large group of people
and especially an online community rather
than from traditional employees or suppliers.
• Coined by Wired Magazine Editors in 2005
• WHO’S INVOLVED?
• The Company– The group that puts
out an open call to the crowd to
problem solve
• The Crowd - Solver in the form of
peer production or sole individuals
who respond with ideas
• Reward for Best Ideas – Can be
recognition or collateral
WHAT IS CROWDSOURCING?
9. WHAT IS CROWDSOURCING?
• WHO’S DONE IT?
• Public and semi-public databases of DNA testing were
created using peer production crowdsourcing techniques
• Apple rumored to be looking to use crowdsourcing to
make Siri provide smarter, human-powered answers in the
future.
• ChaCha – human powered answers to any
question, anytime, anywhere, for free.
• Arcbazar – Crowdsourcing
Architectural design. Controversial
in the Architectural world (DWELL ~
“the worst thing to happen to
architecture since the internet
started”)
10. • NEXT EVOLUTION
• OneSpark – World’s Crowdfunding Festival
• 5 day Festival for Creators, 150,000 attendees (April 9-13
2014)
• “One Spark is built on the belief that game-changers
emerge from dorm rooms, garages, and small studios.
One Spark is the community behind great ideas. It’s the
chance to submit and decide on the next big thing. It’s
the opportunity to get involved, be inspired, connect and
collaborate.”
• Prize Money, Capital Investment and Direct Contributions
WHAT IS CROWDSOURCING?
11. • One Spark Success Stories
• 20 Murals in a Year – Artist gets fund for painting
downtown’s blank spaces.
• Kona School – Paradigm shift for the future of
Education with blended learning environment
• Fresh – Retail concept that combines healthy food
and fitness into one fun and approachable
location. Construction starts in late 2013 and doors
open in Spring 2014.
WHAT IS CROWDSOURCING?