Why Crowd-Fund.....?

[lwien]

Ok, this is what I don't get so if someone can explain the rationale behind this, I'd really appreciate it and please understand, my question has absolutely no negativity behind it at all.

I'm just trying to understand why anyone would "invest" there money for the "possibility" of owning a brand new product being offered to me at a discount, that one, may never arrive, that two, even if it does, there is a VERY big chance that it will not work properly in that most new product, ESPECIALLY ground breaking product that claims to do something in a form factor that hasn't been done before and is using brand new technology, goes through their growing pains and have all kinds of bugs that need to be worked out and three, that your money would be tied up for awhile and tied longer than expected, and four, that discount could probably be realized anyway after all the bugs have been worked out and the product has proven itself in the marketplace for a bit.

Typically, when one "invests" their money into a new start-up, they get a piece of the pie, if you will. They expect a return. What is the return here? Lot's of downsides, but I fail to see the upside unless being philanthropic is one of those upsides. Is that the key here?

 

[fonzerelli]

Ok, this is what I don't get so if someone can explain the rationale behind this, I'd really appreciate it and please understand, my question has absolutely no negativity behind it at all.

I'm just trying to understand why anyone would "invest" there money for the "possibility" of owning a brand new product being offered to me at a discount, that one, may never arrive, that two, even if it does, there is a VERY big chance that it will not work properly in that most new product, ESPECIALLY ground breaking product that claims to do something in a form factor that hasn't been done before and is using brand new technology, goes through their growing pains and have all kinds of bugs that need to be worked out and three, that your money would be tied up for awhile and tied longer than expected, and four, that discount could probably be realized anyway after all the bugs have been worked out and the product has proven itself in the marketplace for a bit.

Typically, when one "invests" their money into a new start-up, they get a piece of the pie, if you will. They expect a return. What is the return here? Lot's of downsides, but I fail to see the upside unless being philanthropic is one of those upsides. Is that the key here?

Perhaps you are too caught up with semantics and being too literal with the use of the word 'invest'.

Technically speaking, people really are not investing, but you know that already. Maybe another term should be used, like, pre-purchase, but then, would it really change the concept of it at all?

 

[lwien]

Maybe another term should be used, like, pre-purchase, but then, would it really change the concept of it at all?

Not at all, 'cause for me, most all of the same questions would apply.

 

[RUDE BOY]

People just want the next Great thing before everyone else so they are willing to take the risk. I have no personal understanding of going to a casino to blow your money on slots and black jack expecting a return.

To me crowd funding is a gamble. If its in the cards you get a decent product and can brag about getting it first and often paying less and receiving freebies or perks for taking the risk, If its a fail you bite the bullet.

Crowd funding Not something I'm gonna take part in on a fixed income but to some its worth the risk.

 

[SD_haze]

My thought is, early adoption is fun enough,
to make you ignore the rational reasons to avoid brand new product innovations.

Additionally, when you're buying a proven product.. the purchase feels very neutral.
--I buy a product, company makes a lil bit of money.
But with crowd-funding, it feels like your money actually matters and is meaningful to the company (typically a start-up). If you're assuming the company is ethical, then you get an ethically positive feeling by "supporting them in their time of need."

So basically, unless your not worried about risking a few $100, it's emotion involved that compels people to crowd-fund


Me personally, I am not into crowd-funding (except vapexhale). I similarly prefer to spend my limited income on proven products in the marketplace.

 

[lwien]

People just want the next Great thing before everyone else so they are willing to take the risk. I have no personal understanding of going to a casino to blow your money on slots and black jack expecting a return.

To me crowd funding is a gamble. If its in the cards you get a decent product and can brag about getting it first and often paying less and receiving freebies or perks for taking the risk, If its a fail you bite the bullet.

Crowd funding Not something I'm gonna take part in on a fixed income but to some its worth the risk.

Rude, I love to go to Vegas and play blackjack. Love to play poker too. But I just don't see the upside in the crowd-funding gamble.

I mean, if by crowd-funding I was able to eventually get the product at manufacturers cost along with a penny for unit they sold, than yeah, it may make some sense to me. But without even a miniscule stake in future profits and/or a REALLY deeply discounted price, I just don't see it.

To me, crowd-funding is similar to a company trying to get venture capital to get their business started. But what's really in it for those that are putting their money on the GrassHopper table, as an example?

...it's emotion involved that compels people to crowd-fund

So its that warm fuzzy feeling that people are paying their money for. Now THAT I understand. Hell, for the price of a happy ending, I could get a pen vape to boot? Win-win.

But this has no happy ending up front, eh?

 

[fonzerelli]

lwien, its really very simple.

If something looks really intriguing, and you know the only chance you have of getting this product is to support them (and lots of other people) when they aren't funded, you consider throwing the dice.

If not supported, you'd never see this vaporizer come to market. To some people, it's worth the gamble of losing their money in the hopes they actually do help get the product to market.

It's not always about dollars and cents!

 

[lwien]

lwien, its really very simple.

If something looks really intriguing, and you know the only chance you have of getting this product is to support them (and lots of other people) when they aren't funded, you consider throwing the dice.

If not supported, you'd never see this vaporizer come to market. To some people, it's worth the gamble of losing their money in the hopes they actually do help get the product to market.

It's not always about dollars and cents!

But you're making a pretty broad assumption that unless they get "crowd-funding", the product would never see the light of day. I would think that a more reasonable assumption would be that the company would first go to crowd-funding rather than initially seeking venture capital simply because it would be more profitable for them to do so. With crowd-funding, they don't have to give any future profits away as they would in seeking venture capital. And with that being said, I would think that if the company failed to get the crowd-funding off the ground, they would then seek venture capital to get it done.

I think it's a mistake to assume that the product would not see the light of day if they didn't get any crowd-funding, eh? There are a lot of ways to skin that cat.

Anyway, that's the way I see it but I really do appreciate your perspective on this. The "whys" of this is kinda interesting to me.

 

[SD_haze]

So its that warm fuzzy feeling that people are paying their money for. Now THAT I understand. Hell, for the price of a happy ending, I could get a pen vape to boot? Win-win.

But this has no happy ending up front, eh?

I see the customer getting the emotional payout upfront. For lot of people there's a "feeling" that you played a role, however limited & intangible, in the development of a new, possibly-cutting-edge product. Individually it doesn't have to matter if that role isn't significant - the feeling's still there somewhere.

But you're making a pretty broad assumption that unless they get "crowd-funding", the product would never see the light of day. I would think that a more reasonable assumption would be that the company would first go to crowd-funding rather than initially seeking venture capital simply because it would be more profitable for them to do so. With crowd-funding, they don't have to give any future profits away as they would in seeking venture capital. And with that being said, I would think that if the company failed to get the crowd-funding off the ground, they would then seek venture capital to get it done.

I think it's a mistake to assume that the product would not see the light of day if they didn't get any crowd-funding, eh? There are a lot of ways to skin that cat.

Anyway, that's the way I see it but I really do appreciate your perspective on this. The "whys" of this is kinda interesting to me.

I agree that most products would still eventually release without crowdfunding.

I was seeing it more from the individual's side.
He likes that feeling of supporting product development, even if it might be unrealistically significant.
Of course, there's those that put down for those crazy $10,000 deals. Then that "feeling" is more legitimate and more powerful.

 

[kato1234]

Ok, this is what I don't get so if someone can explain the rationale behind this, I'd really appreciate it and please understand, my question has absolutely no negativity behind it at all.

I'm just trying to understand why anyone would "invest" there money for the "possibility" of owning a brand new product being offered to me at a discount, that one, may never arrive, that two, even if it does, there is a VERY big chance that it will not work properly in that most new product, ESPECIALLY ground breaking product that claims to do something in a form factor that hasn't been done before and is using brand new technology, goes through their growing pains and have all kinds of bugs that need to be worked out and three, that your money would be tied up for awhile and tied longer than expected, and four, that discount could probably be realized anyway after all the bugs have been worked out and the product has proven itself in the marketplace for a bit.

Typically, when one "invests" their money into a new start-up, they get a piece of the pie, if you will. They expect a return. What is the return here? Lot's of downsides, but I fail to see the upside unless being philanthropic is one of those upsides. Is that the key here?

Invest possibility you quoted discount you didn't this is one of the important ones. People are looking for a discount/rebate/win. Odds on winning the lottery multi millions to one, but every week we buy ( If you don't power to you) but millions of others do. I have browsed thru Indigogo and some of the ideas appeal to me and some are eclectic (bats shit stupid). If an idea appeals to me and touches me on a personal level i.e. I would like a super handy efficient vape then I may make the decision to send some money in the hope that I will receive a product but more importantly that I have helped make this product a reality. I first posted in the Grasshopper thread because I and been following it and when people were saying that I paid for this and expect it at a certain time and I expect updates and etc. and continued to speculate based on psychic powers " I think they are........" Only time will tell and in the big scheme of thing I hope I am right and that this is super but I won't hold my breath but only watch and occasionally comment. For right now I think I will go try one of my existing devices feel free to join me.

Kato

 

[macbill]

Interesting question. I "invested" in the VapeXhale campaign this last July, but I'm not normally a spendthrift. I don't gamble much: I always lose.

I guess I "invested" because I wanted to believe in the product. I've read parts of StoneMonkey's quest to make a vape through the years here on FC. I think he and HippyDippy would end up in huge discussions on the technical aspects: it was beyond my understanding. Nevertheless, in reviewing the project, I believed in the hype.

I know I debated whether I was OK with throwing away $500: I believed in the project, and I could handle the loss without hurting myself financially. For some reason, I always thought StoneMonkey's company would do it. I always thought, come September (or later), I'd score a cool vaporizer. Was that reasonable? Did it make economic sense? In retrospect, it does not. Am I glad I did it? Yes, indeedy. Would I do it again? I don't know........ would the circumstances remain the same? Probably.

 

[DDave]

People just want the next Great thing before everyone else so they are willing to take the risk.

We talking Crowd Funding or Vaporizers here? Or both...

 

[2 Paces]

If something looks really intriguing, and you know the only chance you have of getting this product is to support them (and lots of other people) when they aren't funded, you consider throwing the dice.

To me this sums it up nicely. A good example is a band I listen to that did a Indiegogo campaign to fund the recording of a new album. They do not have a record contract anymore, so they needed money for recording costs. Without the funding, there would be no album.

For $10 I thought it was worth the risk, so in October I donated. I did it with the full knowledge that the album might not get made. Coincidentally, I got an e-mail this morning that has my download of the album I helped fund.

I don't gamble, but on this I did. I didn't consider it an investment as it had no chance of showing a return on my money. It was a pre-order with no guarantee that I would get a product. To me the worst case scenario was that I gave $10 to a band that I really like. I was ok with that.

Fortunately it turned out much better, and now I have new music to listen to that wouldn't have existed if I (and others) hadn't been willing to take a leap of faith and gamble a little.

Sometimes taking that leap is the only way to get what you want.

 

[Enchantre]

Hubby and I have generally always been early adopters - innovation supporters. So much so, that when Toyota brought out the Gen 3 Prius (the body style you see now) for 2010, they flew me to Detroit for the unveiling. And, I was part of a commercial that Toyota did at the time (speaking part, yes).

There can be great benefits from being involved from the start of something. There is risk, of course. However, for certain personality types, being in at the beginning and voting with the dollars makes it so much more than just a purchase.

Yes, we've occasionally backed losers. We have a pile of stock certificates for an organization that has fizzled away, and they are worthless. Oh well. At the time, it felt right. Now, well, it felt right back then, so I will not say it was a bad decision, just did not work out.

Oh, and my most recent "investment" was the EVO, and with that, I got a longer warranty for taking the leap. I'm okay with that.

 

[syrupy]

I see the customer getting the emotional payout upfront. For lot of people there's a "feeling" that you played a role, however limited & intangible, in the development of a new, possibly-cutting-edge product. Individually it doesn't have to matter if that role isn't significant - the feeling's still there somewhere.

This captures it for me. A couple of years ago, an up-and-coming musical artist that interested me did a crowd source for a concept album. It was made clear up front that without full funding the project wouldn't go forward. I don't play the lottery or slot machines, but I was intrigued enough to gamble some dollars.

After some delays and miscommunications, the project did complete, and I do feel more emotionally attached the way SD_haze described. It's subtle feeling of ownership, contribution.

 

[Madcap79]

Speaking of crowd funding......

I guess Grass City is trying to crowd fund a 3-in-1 portable vape. I got an email about it. Weird.

This wasn't meant to derail.

Carry on.