Sep 182012
 

This new model comes with a host of potential pitfalls

An effort to build a sleek aluminum charging dock for the iPhone generated fervor online when it was announced last December. The project’s creators raised close to $1.5 million through Kickstarter, a crowdfunding Web site, and promised to start shipping their Elevation Dock in April to those who had backed the project.

But last week Apple announced aredesigned iPhone that is not compatible with the dock — and because of manufacturing delays, some of the project’s original backers were still waiting to receive theirs. The designers are now scrambling to make an adapter and update the product.

“I’m just hoping to get mine before the iPhone 6 ships at this point,” one backer wrote on Kickstarter.

Crowdfunding sites like Kickstarter and IndieGogo are letting designers and other creative people connect with audiences who want to finance their dreams, and they are becoming increasingly popular. Nearly three million people have helped a total of 30,000 projects meet their fund-raising goals on Kickstarter, the largest such site, to the tune of $300 million in pledges.

But for the creators of these projects, getting the money is sometimes the easy part. They then have to turn their dreams into reality, with a crowd keeping an eye on their progress.

This new model comes with a host of potential pitfalls that are often difficult for project creators to anticipate, and hard for the armchair philanthropists who back them to grasp. Backers are essentially putting their trust in the project creators, giving them cash in return for the promise of a future reward.

Those who give a few dollars to a moviemaking project may get their names in the credits, while someone who puts up $100 to support development of a smart wristwatch might be promised one of the finished items.

Much of the time this works out. But some projects, including several prominent and in-demand ones, have run into missteps and lengthy delays. The permits for a new food truck might not come through. Or a gadget like the Elevation Dock might be harder than expected to manufacture and ship.

The rise of crowdfunding came up often over the weekend here at the debut of the XOXO Festival, a conference that focused on new models and outlets for creativity on the Internet. The conference was co-founded by an early Kickstarter employee, Andy Baio, who sold $400 tickets on Kickstarter itself to gauge interest in the event and raise money for it.

The relationship between creators and backers on crowdfunding sites is still being worked out. The backers play the role of philanthropists, investors, customers — or all of the above. And when promised rewards are slow to materialize, eager backers can get cranky.

Read more . . .

via The New York Times – 
 

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  2 Responses to “Success of Crowdfunding Puts Pressure on Entrepreneurs”

  1. Pressure will make them aware of the supporters need and this will really help the entrepreneurs in making a business system full proof to meet the crowd expectations.

    I think it’s obvious anyone would keep you under pressure if do invests on believing your presentations.

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