Does Online Crowdfunding Actually Reward Innovation? (strategy-business.com)

Slashdot reader Anirban Mukherjee is an assistant marketing professor at Singapore Management University who led a team analyzing every Kickstarter project ever launched in nine product-oriented categories. An anonymous reader summarizes their results: One 2013 report predicted $96 billion a year in crowdfunding by 2038 -- nearly twice as much as what's currently funded by venture capitalists. (In a foreword, AOL co-founder Steve Case touts the potential of crowdfunding for "the rise of the rest.") "Many have predicted that online crowdfunding will democratize product development," writes business journalist Matt Palmquist, "allowing small entrepreneurs who lack the contacts, resources, and experience of larger companies to overcome economic, geographic, and social barriers on their way to market." But a large-scale analysis discovered that the biggest barrier may be consumers themselves. "The study's authors found that the amount of money pledged increased when the product description emphasized either originality or utility -- but dropped when both attributes were mentioned. The findings suggest that the crowd does not yet prize true innovation."

"The authors posit that the high degree of ambiguity surrounding crowdfunding might scare consumers away from supporting groundbreaking projects. In the typical shopping context, they point out, consumer regulations protect the buyer. But in crowdfunding, consumers may never receive the product... Another study found that more than 75 percent of successfully funded Kickstarter projects are significantly delayed... 'We speculate that the higher level of uncertainty in the crowdfunding context drives backers to choose modest innovations and shy away from more extreme innovations, i.e., innovations that are high on both novelty and usefulness,' the authors write."
After reviewing 50,310 projects, the team concluded that crowdfunding "may not be the panacea for innovation."

Comments

Here's a serious question:

[hey!]

Who cares if crowdfunding projects meet some academic definition of "innovation"?

That question asked, I suspect the "problem" has to do with the tech adoption cycle: early adopters and pragmatists are two different groups that are important at different phases of a product's life. Anyone who has ever sold a tech product into a market that's never seen tech before (granted a less common experience than it was twenty years ago) knows you can't appeal to both groups at the same time.

In the end success means winning the pragmatists over, but early adopters are a key step toward that goal.

Re:Here's a serious question:

[ShanghaiBill]

Who cares if crowdfunding projects meet some academic definition of "innovation"?

Indeed. The most cost effective innovations are incremental improvements to existing products. Sure, we should fund an occasional moonshot, but that is not where most R&D money should be spent.

Re: Here's a serious question:

[anirban.mukherjee]

Novelty by itself only has curiosity value. Usefulness by itself does not transcend the status quo. Hence, creativity and innovation is their joint. Our work, unfortunately, canâ(TM)t speak to innovators vs âoepragmatistsâ: a limitation of Kickstarter is that one doesnâ(TM)t really know who is pledging support. It would be interesting to know how innovators differ from early adopters, or how it matters for crossing the chasm (Moore 1991).

Re:Here's a serious question:

[93 Escort Wagon]

Who cares if crowdfunding projects meet some academic definition of "innovation"?

Since it's voluntary, I certainly don't care. But it is still interesting academically, and perhaps useful when examining the phenomenon for other reasons (such as trying to detect and/or prevent abuses of the system).

To my non-expert eye, it seems apparent the average person is as bad at picking crowdfunding winners as he is at managing his own finances. And I'm sometimes amazed at the (in my mind) garbage some people are willing to throw money at. I think if there's a problem, it's at least in part because people may not really understand what crowdfunding is - you're not an investor, for example.

Re:Here's a serious question:

[alvinrod]

There's a bigger problem in that just because a product harps on about being original or offering a lot of utility doesn't mean either of those things are actually true.

I suspect that online crowd funding rewards people who (try to or claim to) provide what other people want. Selling food isn't very innovative, but I reward my grocer for doing so on a regular basis.

Re:Here's a serious question:

[fermion]

It could be that crowdsourcing misrepresents itself by claiming to offer a product when in fact people are making an investment, or, in some cases, more accurately making a donation.

Innovation does require that people, some of who are called early adopters, take risks. If no one buys the product, if no one invests in the product, then no innovation occurs. What wins and does not win is determined as much by sales as it is by innovation. Many would agree that Apple products are not always the most innovative, but they usually sell enough to support further innovation. This is not the case with many other products

What is nice about crowdsourcing is that provides a way to help innovate a very specific idea, such as a watch, or a tracker, or something like that. What is not nice, and the reason most of use invest in mutual funds instead of specific companies, is that it is hard for the small investor to due proper due dilligence.

Re: Here's a serious question:

[anirban.mukherjee]

I find it very interesting as to how backers perceive a product/project: as an investment, a donation, or a purchase. You are correct that it may not align with what it âoeoughtâ to be. There is research on this but not that much is known formally.

Re: Here's a serious question:

[anirban.mukherjee]

My initial expectation was that most Kickstarter projects are moonshots. But they are not. The vast majority of them are quite modest âoeinnovationsâ. A âoenewâ backpack, jacket, wallet, watch etc.

Re:Here's a serious question:

[whoever57]

It could be that crowdsourcing misrepresents itself by claiming to offer a product when in fact people are making an investment, or, in some cases, more accurately making a donation.

People are never making an investment. At best they get the product. Just look at Oculus Rift. Did the the people who bought into that product see any of the profits when Facebook bought the company?

Crowdsourcing is a hack which really only exists because laws in the USA don't allow some types of speculative investment by anyone except the already wealthy. For a historical example of how that works out, look at how "La Serrata" (the closure) affected the economy of Venice.

Re: Here's a serious question:

[tysonedwards]

Here's the way of thinking about it... If you provide funds to a crowd funding activity, you are not legally considered an investor /and/ you are not legally purchasing a product under contract. You are entering into a buyer beware, uncontracted engagement with an entity in which any terms agreed to are tacit rather than explicit. As such, if you engage in crowd funding and you do not receive anything, receive something that is substantively dissimilar to the product stated (such as a backers only update), or do receive exactly what you believed you would, the relationship carries with it no requirement of quid pro quo.

Re: Here's a serious question:

[hey!]

Well, actually having been in the position of developing products, the part you're missing is the way novelty and utility dovetail. A pragmatist won't buy something until it's proven to work. The way you do that is you sell novelty to early adopters and prove that it works with them.

You can't use the same message for early adopters and pragmatists; you can't sell to them both at the same time. But they're both on the long term path to success.

Re: Here's a serious question:

[easyTree]

modest âoeinnovationsâ. A âoenewâ backpack, jacket,

Someone should start a KickStarter which will deliver working Unicode to Slashdot :D

Re:Here's a serious question:

[aaarrrgggh]

Crowd funding, just like any other type of funding, places value on the pitch rather than the product. Fundamentally you need to accept that first and then talk about innovation.

Ultimately though innovation and funding are independent. The real discussion should be about funding efficacy for high-risk projects by source. I opened a savings account yesterday with 0.07% interest! While not my purpose, can you imagine "saving" money like that... clearly there is an opportunity for high-risk funding, but to be effective it needs to have a good pitch and offer real opportunity.

Re: Here's a serious question:

[anirban.mukherjee]

I am not sure most people are aware of that. Itâ(TM)s also complicated because often the backer knows the creator on a personal level (friend of a Friend, etc.).

Re:Here's a serious question:

[tlhIngan]

Indeed. The most cost effective innovations are incremental improvements to existing products. Sure, we should fund an occasional moonshot, but that is not where most R&D money should be spent.

Exactly. The problem with moonshots is twofold. First, you have to make the final objective achievable - a moonshot that no one believes is possible will attract the gullible, but rational actors will not ante up.

The other problem with a moonshot is marketing. It's easy to sell an incremental innovation because people have the product, and can see why doing X to it will make it better. But if you invent a completely new product, now you have to get people to figure out why they want it. Think about a personal computer in the 70s - the general public was not envisioning why they'd need to have one. Sure hobbyists can see the potential, but a general household? You'd have to sell them on why they'd want one, when no one else had one, not even schools or businesses. (It took VisiCalc to give purpose to a business computer).

Whereas, it's the 50s and you'd created the microwave. Why would people want it? Easy - it reheats food quickly - what took half an hour in the oven takes 5 minutes.

Perhaps that's the true reason why academic "innovations" in crowdfunding make less money is simple marketing - if people can't figure out why they'd want one, they won't support it.

Re:Here's a serious question:

[Anonymous Coward]

As well they should. If you look at the comment section on any failed project or one that's been greatly delayed, you'd see that there's a large number of people that don't understand what they're getting into when they back a project.

And there's basically no protections given for the backers. It's more or less precisely the kind of thing that regulators should be banning as the only upside for the backers is that they might get their product at a bit of a discount. But, sometimes the product never comes to market and sometimes it winds up being cheaper because the asking price was too high initially.

There are other methods of funding things like this, the problem is that in many cases the sum of money they're asking for is astronomical. If it were just a few grand, that wouldn't necessarily warrant much protection, but one of the KS I just backed isn't through and they're already well into the hundreds of thousands of dollars. Granted the campaigner has previously raised money there and fulfilled the promises, but it's still a ton of money.

In most cases these projects are going for money directly from small donors for a reason. It's usually something of limited commercial value with significant risk that investors wouldn't be willing to loan money for without taking equity in the company. Or not at all.

Re:Here's a serious question:

[fermion]

Not all investments are equal. Not all investors receive dividends which are directly connected to profits. Some investors simply receive profits if the values of the stock increases, which is not necessarily linked to any profits. Some companies with profits actually see their stock valuations fall, which is a loss to some investors.

Re:Here's a serious question:

[whoever57]

And participants in crowdfunding get none of the investment proceeds. No dividends. No capital appreciation. Nothing.

Crowdfunding is not an investment. It's a speculative purchase.

Re:Here's a serious question:

[datavirtue]

Innovation is often ignored and or punished. That is why the rewards of innovation are usually attached to strong, persistent people.

Re:Here's a serious question:

[david_thornley]

That's one of the reason crowdfunders might be conservative. If a venture capitalist funds ten startups, all it takes is one big success to make it financially worthwhile, covering the costs of all ten and then some. If I contribute to ten Kickstarter projects, and one wins big, I've got one good whatever. If the product is a huge success for its company, I've got my whatever, and that's it.

If something's innovative, that means it has a good chance of going bust and a real chance of making it big. As a crowdfunder, it may be a tossup: tails I lose, heads I likely win a little. If it's some people doing the same sort of thing they've done two times before, I'm likely going to win a little. The contributions and reward levels are, in my experience, never enough to constitute a real win. I get something nice before the general public, probably at a minor discount, and it's possible that the something might never exist if it wasn't for our contributions.

Also, venture capitalists can meet the founders and talk to them. Their individual contribution is big enough to get them individual treatment. I can only judge KS projects by what I can find out as a member of the public. If someone comes around with a new and potentially brilliant idea, I can't judge the chance of success or the competence of the someone..

So, I support Kickstarter projects that are basically people doing what they've done before, if they're making things I'm going to want, and the contribution is not so much money that I'd be seriously annoyed if I lost it.

Not sure what's being said here

[Kjella]

It seems obviously to me that successful Kickstarter projects provide people with something they already know they want. Even if the project can't deliver people have already internalized their desire for it. Truly novel and innovative ideas are typically things people don't yet know they want, like it's famously said that if Ford had asked people what they'd want they'd say faster horses. I didn't understand I wanted a smartphone until I actually had one, if you'd ask me up front what I wanted from a next-gen phone I'd probably say battery life, call quality and whatever else you'd want from a dumb phone.

Re:Not sure what's being said here

[ShanghaiBill]

I didn't understand I wanted a smartphone until I actually had one

You were not alone. Back in 2007, the Slashdot consensus was that the iPhone was lame, had pointless features, and was doomed to failure since nobody wanted to use an iPod as a phone.

Re: Not sure what's being said here

[anirban.mukherjee]

Our findings hold across the board: if we filter out small projects (for eg., goal less than $10k) or large projects (for eg., goal more than $100k). We originally thought this would be something only for the big, potentially implausible projects. But that doesnâ(TM)t seem to be the case.

Re:Not sure what's being said here

[Anonymous Coward]

Well, the original iPhone was pretty useless. There was no app store. There was a very limited set of provided apps on it. At that time, Windows Mobile was a better option (Symbian sucked, but at least was more powerful). Hacked phones and apps made by people doing hacks to the OSX SDK at least provided some hobby potential to the original iPhone. It was when they made an official SDK and introduced the App Store that the iPhone had true potential. The 3g was probably the true turning point in not just having access to useful apps/games, but also having enough bandwidth to make it useful as a true mobile device.

Re: Not sure what's being said here

[anirban.mukherjee]

More than âoeasking people what they wantâ, this is the equivalent of Steve Jobs walking out and doing a demo of the first iphone and people saying âoeno thanks, I would prefer my horse to your carâ. (With due apologies for mixing up the various metaphors and analogies.)

Re: Not sure what's being said here

[Anonymous Coward]

And they were right. It wasn't until it became far more than a music player that they got popular. The real win came when you could use it to browse the internet and play games, check email, use social media, and had a camera that was worth a shit.
The first two generations of smartphones were crap.

Re:Not sure what's being said here

[Anonymous Coward]

I didn't understand I wanted a smartphone until I actually had one, if you'd ask me up front what I wanted from a next-gen phone I'd probably say battery life, call quality and whatever else you'd want from a dumb phone.

Exactly what I'd want from a Smartphone.

So far...

Re:Not sure what's being said here

[ArchieBunker]

Throwing money at a problem doesn't fix it.

Re:Not sure what's being said here

[aaarrrgggh]

Are you kidding?! Compared to what was on the market at the time, it was a huge change. I still remember sitting in a conference room when my meeting was over, looking at the presentation, and saying "wow... this is huge!"

Even if it was just a giant touchscreen... it changed the idea of what a "smart phone" was.

Re:Not sure what's being said here

[Anonymous Coward]

Are you kidding?! Compared to what was on the market at the time, it was a huge change. I still remember sitting in a conference room when my meeting was over, looking at the presentation, and saying "wow... this is huge!"

Even if it was just a giant touchscreen... it changed the idea of what a "smart phone" was.

Sorry, but the parent is absolutely right. From an adoption standpoint, Windows Mobile was still rather huge back then. This was also when Blackberry was still a dominant force in the business environment. Apple appeared to be "innovative" to many who saw iTunes support as the smartphone salvation in their life, since initially it was little more than a fancy iPod on cellular wheels. The rise of the iPhone had to do more with fashion than function. This still rings true today across and endless sea of narcissistic consumers who wouldn't be caught dead with any other phone. Most other smartphones can do all the things an iPhone can, sometimes better, with features that often predate Apples implementation. The "it just works" marketing gimmick is old and worn out; all smartphones have been made just as idiot-proof as iOS.

Re:Not sure what's being said here

[Anonymous Coward]

It seems obviously to me that successful Kickstarter projects provide people with something they already know they want. Even if the project can't deliver people have already internalized their desire for it.

That is true at least in my case.
Does matter if it is about fantasy miniatures (ReaperMini.com) , Comics (girlgenius) , computer games (Kingdom Come : Deliverance) or ... novel AR cleaning kit (mscleankits.com)
First I can see idea and concept , then I decide that it is worth to throw some of my money on that project ... taking risk that project will fail but hoping to get something that I want.

Crowfunding is tightly related to the reputation. I would like to see proof of past competence before i commit.
Somebody coming from nowhere with innovative idea and ... just needs money ...
No, thank you.
You need investors. For high risk I would expect share of profits ...

Re:Not sure what's being said here

[aaarrrgggh]

No, the Windows phones were the best available at the time and most comparable to the iPhone-- but the resistive touch screen made them a toy. Blackberry dominated due to being the best device for email.

It's tough to make predictions

[Anonymous Coward]

One 2013 report predicted $96 billion a year in crowdfunding by 2038

Trying to predict technology and economics 25 years out is sillier than trying to forecast the weather that far.
What would 1976 predictions of 2001 computer investment have looked like?

Re: It's tough to make predictions

[Anonymous Coward]

Then how do you explain the original Star Trek's uncanny ability to predict technology?

Re: It's tough to make predictions

[NEDHead]

Self fulfilling prophecy, mostly. And so far on a vastly wrong time schedule. And where are my grav boots, force fields, and warp drive?
 

Re: It's tough to make predictions

[bn-7bc]

And what about transporters, replicstors And warp drive ( in a wider sence ftl travel)hmm? Replicstors snd transporters are fundamentaly imposdible due to the Hisenberg uncertanty principle (the trek writers skerted this problem withh the hisenberg compansator, sadly I doubt we are much closer to this device now then when it was first mentioned in a script idea. As for warp drive, correct me If I’m wrong but does that not kind of violate general relativity? So what are we left with - communicators well to some extent mobile phones tho we have a bit left when it comes to range (iirc TNG hinted at a range of about a solar system, not there yet is putting it mildly, Tri corders. - well I’ve seen kickstarter projects but no test models so undecided. AI and androids(Ie cmdr Data) - are we even close yet? “Give trek a break we ar not at stardate x yet” - hmm what star date are we at and are there rughly 365 srardays in an earth year, if not rughly how many are ther? My pont whit that question is, ar we lightly to get there by the time the equvivalent date rolls around irl. Pesonaly I love trek and cudos to the writers fir geting some rhings right, but they miss a few things esp when it comes to the way we interact with tech and how it changec procedutes - case in point the number of times we se peple handing over reports by handing over a physival pad instead of doing the eqvivalent of E-maling them or some souch,why, is it only a plot device, a convinient way to start, conckude a scene? Ikt sems that one second pad= paper and the next it is a cumouting device, so which is it?

Re:It's tough to make predictions

[thinkwaitfast]

What would 1976 predictions of 2001 computer investment have looked like?

The big thing that everyone said about computers when I was in college was that someday a basketball court sized computer would fit into your pocket. And was a lot later than 1976, though it had been around then too IIRC. I know this because everyone was dumping money into faster and faster computers while I, and a small minority of others, kept asking where's our pocket computer because it became fast enough three cpu generations ago.

There was a lot of wintel money to be made convincing people they needed more GHz, bigger towers and megabytes, so I guess we had to go down that path till it burnt itself out.

Re:It's tough to make predictions

[Kjella]

I know this because everyone was dumping money into faster and faster computers while I, and a small minority of others, kept asking where's our pocket computer because it became fast enough three cpu generations ago. (...) There was a lot of wintel money to be made convincing people they needed more GHz, bigger towers and megabytes, so I guess we had to go down that path till it burnt itself out.

Well one gigahertz was reached in 2000, a good while before that you had PalmPilot and other PDAs but the interface kept it from being more than a small curiosity for businessmen. I tried one of the Microsoft tablets around 2003, it had plenty power but the interface made me wish for a laptop. The killer feature of the iPhone/iPad that "reinvented" those products was the multi-touch screen. Mind you, Apple could probably have gotten a good chunk of the market anyway taking the iPod and adding basic phone functionality to it because for many young people the portable music player was more important than the phone.

Where people found micro-sized keyboards and a stylus to be terribly awkward the touch interface set a new "so easy your grandma could use it" standard. It's a bit like the Nintendo Wii, sure you could use Xbox or PS controllers but the natural simplicity of swinging your controller like a tennis racket sent sales skyrocketing. And then the app store came and even though many of the first apps were quite crude they created a lot of buzz, like how many saw that "drink a beer with your phone" app? You couldn't buy the kind of marketing that made ordinary people pull out their phone and say "watch this, it's cool", you didn't exactly pull out your Nokia and show them snake.

Apple also did a lot of design/marketing, but they also perfectly timed it to a large technical disruption in the market. One that was far more profound than the CPU specs or amount of memory.

Re: It's tough to make predictions

[david_thornley]

Replicators aren't fundamentally impossible, merely difficult. There's a big difference between wanting a chicken sandwich and wanting an exact copy of a Platonic ideal chicken sandwich. We can already 3D-print certain foodstuffs with a printer well under $1K (and it's probably become cheaper, since I priced it a year and a half ago).

Transporters? They're fussier, since if I step into one I want to walk out as one specific human. There's some work on quantum teleportation, which bypasses the uncertainty principle, but I don't know any practical way to do it.

Warp drive? There's the Alcubierre drive being kicked around today. It's very far from being possible currently, and may never be. Relativity tells us that faster-than-light travel is the same as time travel, and Kirk wound up in the Twentieth Century several times (probably because the sets were cheaper, much like, say, "A Piece of the Action", where he winds up on a world tailored after Earth at a certain period).

The communicators are souped-up versions of cell phones. Tricorders are sensor packs with recording capability, and I don't know what I'd want with one. They were handled by Spock and McCoy for scientific and medical purposes, not normally by the crew in general.

What I'm absolutely sure of is that, assuming civilization persists, the stuff available two centuries from now will look like magic, just not the sort of magic that we predict.

Does Online Crowd Funding Justify Silly Analyses?

[TheZeitgeist]

Of course it does.

originality IS innovation

[gurps_npc]

Utility is something that happens AFTER the product is created.

A truly original product has unknown utility. We didn't know what you are going to use the internet for before we invented it.

When someone claims both utility and originality before the product is created and sold it is a key symptom of a scam artist. They are claiming that they personally created a unique, wonderful project with tons of use - and that everyone else was a moron for not thinking of it's obvious uses before them.

You can discover massive utility for a slight innovation, or you can discover a huge innovation with unknown utility. But when people talk about both, they are most likely a scam artist.

Re: originality IS innovation

[anirban.mukherjee]

It is possible that our findings are driven by skepticism.

Re: originality IS innovation

[Anonymous Coward]

Scam artists perform scam art, and some people like to fund art.

Re:originality IS innovation

[mark-t]

You can have a huge innovation with some specific pre-imagined utility, although such utility is often substantially narrower in scope than what will ultimately happen if the innovation is big enough.

The telephone comes to mind as one thing that was invented with a very specific utility imagined for it before it was created.

Re:originality IS innovation

[thinkwaitfast]

https://www.youtube.com/watch?...

I think they got most of it

Re:originality IS innovation

[Anonymous Coward]

I knew what the Internet would be used for, in 1988. Nobody listened and I failed to capitalize on my teenage knowledge because frankly, at that time I wanted to kill myself. I was young and just beginning to realize how stupid humans actually were.

Re: originality IS innovation

[Anonymous Coward]

Right now the most rewarding innovation is taking old things, use it in other cases and pass some tech makeup.

Re:originality IS innovation

[q_e_t]

If utility exists as such, and can be measured, then whilst it may happen after a product is created, the likely utility can be estimated, which is what companies do all the time. The estimate may not be exact, but estimates often aren't.

"may not be the panacea for innovation"

[lucaiaco]

Nobody ever claimed that it was. In fact, I don't think anybody in has honestly shown that X is the panacea of Y. It's a new, different, and complementary way of funding a project. There are others such as public fundings and VC. Nobody said kickstarter was going to replace those. News at 11.

They supported the people against...

[Anonymous Coward]

Hillary so that proves they are stupid. Thinking people knew we should support the establishment against someone that stands against "The Swamp" and the deep state.

Re: They supported the people against...

[Anonymous Coward]

Of course Hillary supported the swamp.

Re: They supported the people against...

[Anonymous Coward]

She helped to create the swamp.

Re: They supported the people against...

[Anonymous Coward]

The swamp makes things go.

Vulture capital a panacea for innovation?

[Anonymous Coward]

Crowdfunding "may not be the panacea for innovation." Bult vulture funding is?
I've backed many crowd funding projects and most are not Kickstarter, so this report is not realistic.
These projects haven't even the hope of vulture capital and if they did, I would rather not fund it having gone through such routes and falling foul to the whims of vulture capitalisms and wasting a lot of time in meaningless diatribe with modern investors such as producing a product before getting the funding.

Why should crowdfunding be for innovation?

[gweihir]

Crowdfunding allows the creation of goods that the have a smaller number of people interested in them and that would not exist otherwise. Nothing says that these goods need to be "innovative". If I and 10'000 others keep the creator of a web-comic financed because I like his comic, that is not innovation. That is merely funding a specific form of entertainment that appeals to a smaller number of people and that the commercial publishers with their focus on the mass-market would never have funded in any way.

Re: Why should crowdfunding be for innovation?

[anirban.mukherjee]

Anyone can support what they prefer. But I think the hope is that people will pick more innovative and more creative projects over other projects.

Re:Why should crowdfunding be for innovation?

[Anonymous Coward]

Exactly. It has nothing to do with innovation.
The purpose of crowdfunding is to get past investors and market analysts that are too incompetent to capitalize on a market that has proven that they are even willing to pay in advance.
The developers still innovate, the market still buys, it is just that the shit between them that is so incompetent that the two of them have to do that job too.

Re:Why should crowdfunding be for innovation?

[Anonymous Coward]

Crowdfunding makes little sense for development. All of these projects that we keep hearing about failing started passing around the hat before they knew that they could actually produce something. You use crowdfunding to fund the initial production run, which also serves as part of the marketing and feedback process. This reduces your risk by allowing you to properly scope the amount of production. Crowdfunding "innovation" is just a stupid waste of money.

No and here's why...

[Anonymous Coward]

Crowdfunding rewards those who make compelling videos and the like. It seems to have little-to-nothing to do with the innovation at all, just whether you can sell your snake oil better than anyone else.

Re:Beware of crowdfunding websites...

[Anonymous Coward]

As the Bible says, there's nothing new under the sun.

If you had more than 10 dollars a day you'd be abel to buy things other than flip flops and frankincense.

i dont trust it

[FudRucker]

because i dont want to spend hundreds of dollars for a product that does not exist, build it, test it, when it is a verified product that actually does what it is supposed to do then i will buy it, LimeSDR is one that caught my interest, they claim to have a product, but i never seen it for sale at amazon, HRO, gigaparts, or dxengineering or anywhere else reputable and trustworthy for selling high tech electronics

Re:i dont trust it

[Anonymous Coward]

because i dont want to spend hundreds of dollars for a product that does not exist, build it, test it

Good news! You don't have to.

What I don't get is why you bothered to comment. It is pretty clear that the entire crowdfunding segment isn't targeted at you.
I assume that you don't waste your time commenting on professional knitting subforums and other stuff you probably aren't interested in.
So why are you so invested in crowdfunding that you just have to chime in for something you claim you don't care about.

You should see the view up here

[Anonymous Coward]

The view at karma zero is breathtaking

2038?

[easyTree]

Tell me what's going to happen tomorrow. No? Ok then.

Just out of curiosity...

[thinkwaitfast]

Are there any crowdfunded projects that have lived to be successful long term businesses that sell products or services? The only ones I ever hear about are the likes of solar roadways, or something that everyone says is a great idea (or more likely a stupid idea that goes viral over its stupidity), then you never hear from them again.

Not as bad as child molesters

Re:Just out of curiosity...

[anirban.mukherjee]

I was about to respond to your question with my favorite example. Just prior to posting, I searched for them on the web. They closed down a few months ago! The best examples are likely games (Exploding Kittens comes to mind). M3D is a good example in technology.

Re:Just out of curiosity...

[Dripdry]

Ministry of Supply is still going.
Bluffworks is also still going, I believe.

Re:Just out of curiosity...

[thinkwaitfast]

Haha. I was just reading about the mouse experiment.

Re: Moderation is censorship... apk

[Anonymous Coward]

We need more bump stocks, to protect homeland from invaders smelly shitty hindu-chimps, taking our jobs, bringing in more smelly shitty chimps to clog social services. Everything is getting shittier in American hindustan, bump stock and more killing sprees is what we need to exterminate parasites invaders hindu-chimps.

Re:Beware of crowdfunding websites...

[Anonymous Coward]

raved about a new product they're backing on Kickstarter and got mad when I pointed out that the product category, and sometimes the exact same product, was already available at a substantially lower price point from Amazon or Walmart.

Gramatically, this makes no sense. You switched from a specific anecdote to a general case mid-sentence. Hate to be grammar detective but it leads to believe that this whole story never happened and you are lying about having friends on Slashdot to impress people...

The research doesn't check for actual innovation

[ET3D]

The methodology went like this: take all projects with goals between $1,000 and $100,000, and check how many times their descriptions say 'novel' (or a synonym of it) and 'useful' (or a synonym of it) compared to the size of the description (i.e., percentage of these words), and compare to money made. This doesn't really reflect usefulness or innovation. Just from normal ads, I tend to associate exaggerated claims of innovation and quality with shoddy products, and I imagine that Kickstarter projects which harp on how innovative and useful the product is do so in an attempt to convince backers that's the case, not necessarily because it really is. So the real conclusion of the research might be not that people don't want innovative, useful products, but that the advertising strategy of emphasising these aspects doesn't work. (It's hard to know what the case is without a more detailed research, but I'm certainly not going to do that research.)

Re:The research doesn't check for actual innovatio

[anirban.mukherjee]

The actual research doesn't claim that more/less innovative projects are more/less funded. The use of 2SLS/instrumental variables explicitly rules out unobserved variables (including how innovative the project really is). Hence, the research only makes claims regarding the extent of novelty and usefulness claims and does not speculate on the underlying nature of the project. The evidence does not support exaggeration. Making novel and useful claims is linked (causally) to much more money being pledged to the project. In fact the effect size is staggering. With exaggeration, the community should discount the project description. But it doesn't. What is surprising is that if people fund more if you say its novel, and they fund more if you say its useful, why do they fund less if you say its both novel and useful? Why do they respond positively to novel, and positively to useful, and negatively to the joint of these. This effect is stable across categories, across time. It does not seem to be a learning story (backers learn that novel + useful is more risky and hence better not funded). It seems to be something more fundamental about how we as consumers/individuals respond to innovation claims. But the evidence cannot rule out all confounds: the work is more exploratory than confirmatory. Re: measuring innovation. Arguably this is a more important question. But the extent of innovation depends on a potential backer's knowledge and their own needs. What is new to someone, is not new to another. What is useful to someone, is not new useful to another. This is an active area of research so other methods may help address this issue. But it would be cost prohibitive to do this at scale using archival data.

PDA

[DrYak]

Back in 2007, the Slashdot consensus was that the iPhone was lame, had pointless features, and was doomed to failure since nobody wanted to use an iPod as a phone.

On the other hand, another slice of the geek population has had been having PDAs such as Psion and Palm for a around a decade.
They already had pocket computers, with very rich ecosystems of application.
And some already used to connect their PDAs to networks thank to nascent Wifi or by pairing (Bluetooth or even IrDA) with GPRS-capable dumb phones.

(That was my case : Palm IIIc, then Tungsten T3. Pairing with IrDA, then Bluetooth to an Ericsson T39, then a Wifi SDIO card)

To that crowd, an iPhone was pretty lame and useless.
- the only new feature was the multi-touch capacitive screen (most PDA used resistive single touch).
- it lacked everything else that made PDA great.

It wasn't such a huge innovation that we weren't able to grasp it.
It was a huge step backward.

I didn't want a smartphone, because I already had way much better when the original iPhone launched.

Re:PDA

[david_thornley]

Actually, my original iPhone did pretty much everything I used a PDA for, so I stopped using the PDA. It could keep track of my schedule and my contacts, and it had decent web-based games, and it did more. It handled my email well and had a good web browser. It even made phone calls.

Sulf-fulfiling

[DrYak]

Self fulfilling prophecy, mostly.

But if you dig into *why* these prophecies tended to self-fulfil, things would be clearer.

Star Trek is a fiction show by writters. Their only limitation is their imagination, and they tended to imagine what would be cool to have no matter how realistic (pocket computer) or not (warp drive).
The show writter "simply" put form to some of the more technical human desires.

Then some of the gadget ended up appearing in real life, because :
- lots of engineers agreed or were already thinking that, indeed, it would be could.
- in those fields the technology would eventually catch up.

On the other hand, I you would have ask *market* specialist, investors, etc. during the same time instead of asking Sci-Fi writers you would have gotten something along the lines of :
"More big iron ! Invest in IBM now ! " and "Teletype to connect to the big iron in each middle-upper class home ! Invest in Bell !"

Re:Sulf-fulfiling

[Anonymous Coward]

That's just an excuse.

Their primary focus was on whether or not something was entertaining and in most cases that technology was just a means to an end. It was there for the same reason that people in movies regularly let the cashier keep the change, people don't want to watch while something tedious happens. So, they invented their way around things like that without much concern for whether or not it was possible. Transporters and the Warp Drive are excellent examples as are the replicators that you see all over the place.

Compare that with how Arthur C. Clarke wrote and the two are not even remotely close. Sure, Clarke did have some silliness at times like resurrecting people from the cold of space after centuries years, but most of the technology that shows up in the stories is at least plausible.

Any decent tech company is going to have some provision for that sort of pie in the sky thinking. Usually there'll be some sort of skunk works were people can tinker away on things that aren't necessarily commercially viable. Some will give employees release time where they can work on their own pet projects knowing that some of them may become big, but with a more defined cost to the company.

The big thing that Star Trek did was inspire a huge number of people to go into science fields the fact that some of this stuff was done is mostly a matter of the number of devices that were needed to pave over plot holes. The biggest and most significant things have yet to be done and likely never will as they violate various physical laws.

Sure

[drinkypoo]

It rewards innovation in attention whoring and advertising, but I repeat myself.

Nothing rewards innovation anymore

[zifn4b]

It's all about money, not progress, at least in America. Therefore, the question is absurd.

Indeed

[nospam007]

"But a large-scale analysis discovered that the biggest barrier may be consumers themselves."

Indeed, those fuckers will just buy what they like or want, it's a shame.

It's not just crowdfunding that does this

[DidgetMaster]

The market in general is very risk averse. Innovation requires risk..a step into the unknown. Almost every new invention or innovation requires at least a small group of 'early adopters' who will take a chance on the new thing enough to get some market traction. If the product is truly good, then lots of people will jump on board once they know most of the risks have been eliminated. But until then, it sees little support. This is a primary reason many startups fail. They are caught in a 'catch-22'. Cannot get the resources needed to build and perfect the product without market adoption first. Cannot get any market adoption since the resources to actually build it are not there.

Re:It's not just crowdfunding that does this

[david_thornley]

Innovation is risky. It can flop completely, or it can be a big success. With crowdfunding, you have all the possibility of losing everything you contributed, combined with the lack of ability to succeed big. Not a good fit.

Innovation?

[drolli]

That is IMHO not the strong side of crowdfunding. Crowdfunding is best when the solution is well known, desired by some potential users, but not being produced by the market because the product is financially not interesting enough (could be "too small userbase" or too risky).

Re:Innovation?

[anirban.mukherjee]

As far as I can tell, the effect persists even if one looks at very modest "innovations". Categories like apparel are mostly minor tweaks on well accepted designs/norms. Yet, we find the same effect. I thought this might be limited to only big/radical innovations for exactly the same reasons but as far as I can see in the data, that does not seem to be the case.

Re:Beware of crowdfunding websites...

[Anonymous Coward]

You are wrong! Creimer has plenty of friends, see them here:

https://www.youtube.com/watch?...

Re:Beware of crowdfunding websites...

[Anonymous Coward]

Chris has a lot of friends. Normal people call them imaginary friends but for Chris they are really real.

For the valuable /. users that might already have read the following, please note that there is an important update.

IMPORTANT UPDATE:
Special Education for the Santa Clara County Office of Education has invested money to buy Chris a new chair:
http://www.keynamics.com/image...

Information about Christopher Dale Reimer and autistic people:

Autistic people have obsessions about things normal people don't care. For example, one of our autistic patient went haywire when he realized that there was a penny missing in his pocket change.

To calm him down, one of our educator pretended to have found it on the floor and gave a penny to him.

The autistic patient condition went even worse because he realized it wasn't the same penny!

Chris has an obsession with budgeting every penny. He doesn't understand that most people do not budget to the penny and have a flexible amount they allow for miscellaneous items.

I am Nancy Guerrero and I am Director of Special Education for the Santa Clara County Office of Education. We use Chris' (a.k.a. creimer,cdreimer) picture in our document because he is the hardest case we have ever had to handle:
http://www.sccoe.org/depts/stu...

Our artists were inspired by the low carb diet that Christopher follows scrupulously for the small lunch box and by the picture linked below for the rest. I am sure that you will notice the similarities such as the bump on the side of his chest and more:
https://ibb.co/gVad65

Please be easy on Christopher although, I am aware that some of our staff handling Chris post joke comments here and obvoiusly, the Santa Clara County Office of Education disapprove that behavior vehemently:
https://school.discoveryeducat...

But it isn't Chris' fault if he is the way he is. We do the best we can do with him and he is partially integrated into society. We try to cure his abnormal need for attention but he is kind of stubborn and won't listen to anybody.

Thank You dear users,
-Nancy Guerrero

Re:Beware of crowdfunding websites...

[Anonymous Coward]

Friends? Which friends?

Oh sorry, my mistake, after reading the thread, I see who they are now:

https://www.youtube.com/watch?...

Impersonating me? Weak

[Anonymous Coward]

See subject: Whoever the fool is attempting to "impersonate me" only proves that I've REALLY 'gotten to them' somehow (thanks).

* I am with you on something though - there is a TON of bogus downmoderation but as the saying goes? "When all your opposition has is censorship you've obviously won" (& I am highly against the LOON(s) who shot all those folks up in Vegas - I think it's somekind of falseflag OR an attempt @ further dividing our nation up ala the KING of bogus evil in that capacity, George Soros paying off groups like BLM & Antifa to do so...) - but GUNS DON'T KILL PEOPLE - people do. NO reason to ban guns!

As far as "AssFux" Ash-Fox? That whimp's a weasel who ALWAYS starts w/ me (he's 'butthurt' I've busted him up on tech issues is all that is)...

APK

P.S.=> Provoking weasel reactions like yours is all the satisfaction anyone needs... apk