Donnerstag, 4. April 2013

Crowdfunding Is More

Than A New Capital Source

However, there are some areas in which crowds might outperform existing institutions. And for these contributions, crowds deserve serious consideration for startups and their stakeholders.

Understanding the Costs of Crowd Benefits

When it comes to contributions, you should expect to find power laws at work. That is, a small group will drive a great deal of the value. For this small group, you should expect more help to refine product-market fit, more access to their unique expertise and more help with early customer acquisition. Like advisors, don't they deserve compensation? Or might you get even better contributions if you made it explicit, upfront that this type of compensation was possible?

Also, involving a larger group of stakeholders introduces new demands on founding teams. Founders will need to plan processes to share progress and respond to feedback like they do for shareholder meetings and investor updates. Fortunately we can look to effective community management techniques from firms like Threadless or Giffgaff, who have efficiently engaged and worked with their communities. 

Like investors, crowds can contribute much more than capital. And like investors, some crowd participants will be more valuable than others. How will you recruit your crowdfunders? Read Full Text On HuffPost