{"id":24928,"date":"2014-03-31T11:01:17","date_gmt":"2014-03-31T16:01:17","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=24928"},"modified":"2014-03-31T11:01:17","modified_gmt":"2014-03-31T16:01:17","slug":"market-research-disguised-as-crowdfunding","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2014\/03\/31\/market-research-disguised-as-crowdfunding\/","title":{"rendered":"Market research, disguised as crowdfunding"},"content":{"rendered":"

Virginia Postrel<\/a> has an interesting take on the current brouhaha over Facebook’s acquistion of formerly crowdfunded Oculus:<\/p>\n

Crowdfunding sites such as Kickstarter and Indiegogo represent a classic entrepreneurial phenomenon: Once you roll out your great idea, customers use it in ways you didn\u2019t imagine, and you wind up in a different business than you expected.<\/p>\n

Kickstarter\u2019s founders wanted to help artists raise money. Indiegogo co-founder Danae Ringelmann pictured aiding capital-strapped small-businesses owners like her parents. Neither intended their site to act as a test market. But, as the rags-to-riches story of virtual-reality firm Oculus shows, that\u2019s what they have become.<\/p>\n

\u201cIt\u2019s a way to access capital, but what it\u2019s also become is a market-testing and validation platform,\u201d Ringelmann told the Dent the Future conference on Tuesday. \u201cWhat we\u2019re doing is creating pre-markets for ideas,\u201d she said.<\/p>\n

[…]<\/p>\n

Now that Facebook is buying Oculus for $2 billion, critics are reverting to the original assumption that crowdfunding is primarily about raising money. “Talking people out of $2.4 million in exchange for zero percent equity is a perfectly legal scam<\/em>,” wrote my colleague Barry Ritholtz<\/a>.<\/p>\n

But it\u2019s not a scam at all. It\u2019s market research. In effect, customers placed pre-orders and received early products; why are they griping that they don\u2019t own a part of the business?<\/p>\n

The backlash is largely Kickstarter\u2019s fault. It may not be running a scam, but it definitely sends mixed messages. Unlike Indiegogo, which prides itself on operating a neutral platform giving anybody\u2019s idea a market test, Kickstarter hasn\u2019t embraced its de facto<\/em> transformation. It strictly curates the campaigns it hosts and, although it makes its biggest profits on technology products, it still exudes an artistic sensibility that isn\u2019t entirely comfortable with disruptive technology or large enterprises. It still talks as though it\u2019s PBS. \u201cKickstarter is not a store,\u201d it declares.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Virginia Postrel has an interesting take on the current brouhaha over Facebook’s acquistion of formerly crowdfunded Oculus: Crowdfunding sites such as Kickstarter and Indiegogo represent a classic entrepreneurial phenomenon: Once you roll out your great idea, customers use it in ways you didn\u2019t imagine, and you wind up in a different business than you expected. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[831,25,28],"tags":[707,391,174,428],"class_list":["post-24928","post","type-post","status-publish","format-standard","hentry","category-business","category-economics","category-media","tag-crowdsourcing","tag-facebook","tag-innovation","tag-marketing"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-6u4","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/24928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=24928"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/24928\/revisions"}],"predecessor-version":[{"id":24929,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/24928\/revisions\/24929"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=24928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=24928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=24928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}