Kanyi Maqubela Interviewed Jessica Jackley of Kiva About Crowd Funding

Kanyi Maqubela of Collaborative Fund interviewed Kiva co-founder Jessica Jackley for The Atlantic (how’s that for maximum name-dropping in minimum space).

Read the article, or continue reading for some highlights.

Maqubela: It seems there will soon be platforms to raise money for almost anything, from the local bakery you hope to start in your neighborhood, to your high-technology startup idea, to donations for a church mission trip. What will such an economy look like? To answer that question, I spoke with with my colleague Jessica Jackley…

Jackley: Not all things can or should be crowdfunded…The ventures that keep things light and fun, easy to understand, that have a compelling story, a sexy retail product, will have an easier time getting people to rally around them and contribute. A start-up doing something that’s difficult to communicate or doesn’t offer any kind of retail product will have a tougher go at it.

Maqubela: This seems to line up with your Kiva philosophy: crowdfunding as a way of validating, or manifesting, an emotional connection to an individual or a narrative.

Jackley: Investors in big and in small deals tend to invest in people and in stories that resonate with them.

Maqubela: Kickstarter provided more than $150 million in funding to the arts in 2012, outpacing the National Endowment for the Arts (NEA), but is that a lot of money?

Jackley: One of the smartest things Kickstarter has done, in my opinion, is give people a great shopping experience related to the arts, that funds the arts. In essence, they’ve gotten people to pay $200 for a t-shirt plus the feeling of participation in another artist’s endeavor…Healthcare professionals don’t make art (in any traditional sense).

Maqubela: Endowing important projects requires sustained interest over time, and the Internet trends heavily towards short term thinking. I’m skeptical that crowdfunding could sustain longer-term projects…

Jackley: I wonder about that too.

Maqubela: But is the wisdom of the crowds really good?

Jackley: I see no problem with opening up more ways for entrepreneurs get capital — in general I think the more the merrier on this front — but again, we need to respect the place of crowdfunding in a very big market, and not try to make it more than it should be.

Crowd Funding Dump

Kickstarter has subdivided their “technology” category into “open software” and “open hardware” which makes my job a little faster. There aren’t very many things in it…but I suppose that also makes my job a little faster.

Summary:

• MaKey MaKey: Funded
• Safecast Geiger Counter: Funded
• QU-BD Universal 3D Printer Extruder: Funded
• B9Creator 3d printer: Funded
• Wireless Inventors Shield for Arduino: 16 days left
• Open Rail: 27 days left
• The Vision 3d printer: Funded
• Variable USB Power Supply: Not Funded
• Rapcraft 3d printer: Not Funded
• Plugable Thin Client: 8 days left
• Robotic Minion: 20 days left
• Tantillus 3d printer: 3 days left
• H1.1 SeeMeCNC 3d printer: 19 days left
• Wikispeed C3 car: 31 days left
• Kontinuum Garden: Not Funded

Details after the jump.

MaKey MaKey, Apparently Exactly What People Want

Crowdfunding is a reasonably popular way to launch, or maintain, an open hardware project. The best site for this approach is Kickstarter. Some projects get their funding, some don’t. What’s the difference between them?

That’s a hard question to answer. I haven’t studied the issue, but the most popular (IE: funded) projects seem to combine technology(s) in such a way as to create an “experience.” I’ve yet to see a better example of this phenomenon than the MaKey MaKey.

The creators asked for a mere $25K. What they got was $400K.

Printrbot asked for the same $25K and received over $800K, but that makes a lot of sense. It’s a 3D printer, so it can make things for you, and it’s remarkably small/cheap, so it’s superior to many other designs. However, for some reason, it’s a lot easier to find examples of people throwing money at things that aren’t nearly as practical. Printrbot got over 3,000% of its funding goal. Other projects that broke the 1,000% barrier are Remee (lucid dream mask), Twine (make your “things” send tweets), QuNeo (a colorful MIDI pad controller for musicians), TJ* (a robotic face puppet), Estylo (an eco-friendly iPad stylus), and ClockTHREE Jr (an amusing clock). There’s a lesson in here somewhere. I’m not entirely sure what it is, but at the moment it seems to be that people get excited about hardware projects (open or not) that create an exciting/novel/interesting experience.

So we’re back to the MaKey MaKey. It really doesn’t do much. What it does do is allow you to turn pretty much any arbitrary action and materials into a few simple inputs the computer can understand. You’re not going to get anything done with it, and the novelty will probably wear off in the 30 seconds it takes to lose playing Tetris on bananas, but that doesn’t matter. People want it.

Hardware projects (open or otherwise) depend on funding. You can’t build something physical with just pizza and a long weekend; eventually you’re going to need cash (or an incredibly well stocked junk yard). It helps if you don’t have to supply all the cash yourself. Apparently, if you want people to help out by purchasing/donating to your project, it’s a good idea to show them how the finished project will make them feel. The sort of people who build useful tools in their spare time also tend to be the sort of people who don’t market. That’s fine, but only a few other hard-core geeks are going to spontaneously understand why your project is awesome. Everyone else has to be shown. Some projects are made for the camera. They are pure experience. Other projects have to work at it.

Crowd Funding Dump

So, apparently the JOBS Act officially sanctioned “crowdfunding” (yes it’s a real word now).

The catch is that “investors” can only work with “issuers” through the services of a “portal” which has to be registered with the SEC. What this means is that Indiegogo and Kickstarter will have some competition and we’re about to see a lot more innovative ideas pitched (more or less) directly to the public.

Anywho…that’s fascinating and all…but what will it do for open source hardware? I dunno; lets find out. Assuming there’s enough activity (seems like a safe assumption) the Crowd Funding Dump (CFD) will become a regular feature on Openalia.