And if you’re not, in a nutshell it goes like this: one individual entrepreneur or a team posts a project asking for an amount of money to develop a new innovative product or service…or to make a $55,000 potato salad.
Random users from the internet who want that product or service in their lives back it up with a financial pledge. The money is only collected if the project reaches its designated goal and is paid to the team shortly after. And while granted, the notion of getting funded at a very early, pre-seed, stage by your first customers without having to hand out any equity is attractive for any (wannabe) entrepreneur, there are some caveats in crowdsourcing, for both backers and project owners:
- for the backers, there’s literally no guarantee that the money will be spent developing the project, or at least, that *all* the money will go towards that goal
- for the project owners, there’s no guarantee that their project will not be duplicated by someone else before they manage to get funded and beat them to market. There are lot of articles on this subject.
So then, why do it?
Well, for backers I assume it’s the idea of supporting a project they like and maybe get some perks in the process, in the form of future discounts or free merchandise. And especially for small amounts of money, the risk is easily manageable.
For the entrepreneurs is the ever present need of funding and the knowledge that an unfunded and unimplemented idea is worthless. And they are generally the type of people who assume risks.
What about myself?
Well, while I browse Kickstarter and similar sites from time to time, I do it mostly for fun, without backing any projects – I know 🙂 I wait for the product to hit the market, read some reviews and buy it afterward if I still wanted. Usually, I don’t! However, I have decided to make an exception and start my backing career!
One the most prominent Kickstarter campaigns lately was the one for Liv Watches, which you may already be familiar with, as it was aggressively promoted on social media. Anyway, being a bit of a watch aficionado, I’ve decided I want one of those watches. I really, really want it.
So I made a pledge that should get me a Day-Date Chronograph. I’m a big fan of chronographs and I generally prefer larger watches. The campaign ended a few days ago and it got funded, which means my card got charged and I can’t pull out anymore. So now I’m just hoping for the best.
However, I’m quite pleased with the way LiV decided to handle the whole enterprise. They created a rewards site where project backers can pick their watches, customize them and also purchase a lot of goodies – straps, boxes, winders and other accessories – at discount prices.
With the help of a friend, I decided on the orange dial chronograph from the picture above. I hope I will be able to post an unboxing article in a couple of months.