The crowdfunding website, Kickstarter, is a go-to place to fund your friends' "great ideas." It's been attracting everyone from creative-types -- like musicians looking to pay for a new album or writers who want to start a new magazine -- to entrepreneurs looking to advance their innovative product ideas since the site launched in 2009. But it's no longer just a site for indie entrepreneurs. Cash-flush companies are now discovering benefits from the funding platform.
As Jessica Leber reports for Technology Review:
[S]ome startups and even larger companies are now looking to crowdfunding sites to serve other business functions, from market research and product design to customer relations and manufacturing negotiations.
“Crowdfunding is the ultimate form of consumer research,” says Scott Popma, an intellectual-property lawyer who advises companies about crowdfunding. “You are not just asking people’s opinions—you are getting opinions with their money.”
Leber points to one company, For Days of Wonder, which makes digital and board games, that used Kickstarter to determine if it would be worth the company's time any energy to build an Android version of a popular iPad game. The company got useful information about the actual demand for the product and eventually canceled the Kickstarter campaign.
The idea of Kickstarter aiding business innovation for larger companies is an intriguing one. But while Kickstarter is attracting businesses, it might not be the place where the largest companies turn to when looking to the aid of crowdfunding. Leber points out that General Mills and Procter & Gamble are working with CircleUp, a crowdfunding site for accredited investors, to seek out innovative startups to fund or possibly purchase.
Whether it's Kickstarter or another crowdfunding site, it's clear that crowdfunding is becoming an important resource for big businesses, not just weekend entrepreneurs.
Backers with Benefits: Why Companies Are Outsourcing to Kickstarter [Technology Review]
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