This week, Slate ran a “cover story” titled The Kickstarter Recession. The article argued “economic growth—gross domestic product—is made of money, not dreams. A sudden shift in the share of labor and capital that are devoted to dream-following would show up in national account statistics as a large fall in productivity”, which caused quite a stir within the crowdfunding advocacy community.
In my view Matthew [Yglesias] has this all wrong on many levels – and I tend not to criticize others work.
The most successful projects on kickstarter are ALL commercial entities which without kickstarter might never have seen the light of day. The perfect story was when I heard Pebble founder Eric Migicovsky state after their angel round they did the venture capital circuit and no VCs showed interest. That could have either been the end of their story, or they would have had a slow bootstrapping model that could have taken them five years to hit $10 million in sales which would have been still a phenomenal success. The VCs were wrong about Pebble and now some regret it. The market spoke, we want the Pebble watch, in fact 68,929 people spoke up by voting with their wallets.
Crowdfunding is removing the gatekeepers. VCs, angels, commercial banks, investment banks, etc. no longer have veto power over great ideas and passionate artists. Platforms that allow entrepreneurs and artist to promote their art to their fans and secure payment or investment will do nothing but stimulate the economy. We are moving closer and closer to a true free market economy where Wall Street-oriented gatekeepers lose their power.
With donation-based crowdfunding, someone has to print the T-shirts, mugs, books, and DVDs, someone has to package them and ship them and deliver them. Pebble only now has a net economic gain to the suppliers and employees and contractors now tied to a $10M order versus a $100K order. We are not only funding dreams, we are funding people who are turning those dreams into reality, they are shipping their art enabled by sites like kickstarter. Today Seth Godin hit his goal with The Icarus Deception in under two hours at $40K. He proved to his publishers there is a demand for his book and publishers will no longer be the gatekeepers. They will publish books the crowd votes in favor of. The crowd is in charge finally and hallelujah and can I hear an amen?
The level of stress in corporate jobs is at an all time high. What if crowdfunding is a catalyst for more people to pursue their passions, live lifestyle businesses as owners and not have to take a J-O-B-S in our world a four letter word. Maybe less people will be sick, injured and medicating themselves with food, drugs, alcohol and other such things. Maybe our industry will bring forth a new era, leading The Entrepreneurial Revolution, where more dreamers are given a voice and a chance to have supporters invest in their dreams whether by donation, perk or security.
This is why I am involved in crowdfunding and the naysayers, critics and detractors their noise will soon be silenced by the voice of the crowd. What an awesome world we are moving into. And I am grateful to be co-creating this with all of you.