Just to follow up from Andreas presentation about kickstarter:
The Economist Nov. 17th 2010
THE GLIF'S designers hoped to raise $10,000 to produce a few hundred iPhone 4 tripod adapters. Dan Provost and Thomas Gerhardt planned to do most of the fiddly final assembly, packaging, and mailing themselves. Instead, the project brought in $137,417 in crowdfunded contributions via Kickstarter over 30 days. The pair have been scrambling to keep up with success.
This Babbage first spoke with the Glif's makers three days into their Kickstarter effort, at which point Mr Provost and Mr Gerhardt had seen over $70,000 pour in, largely in preset increments of $20, $50, and $250. The two were both a bit freaked out, as their original plans revolved around producing a modest number through low-volume injection molding. The final tally has them delivering over 5,200 to contributors of $20 or more.
This is where the use of crowdfunding spins the conventional story of success killing a small business on its head. If the designers had plugged prototypes to buyers, and suddenly received an order for 5,000 units from a wholesaler or retail chain, the two might have failed before beginning. To raise money for initial production, they would have followed the traditional scripts: fire up credit cards, obtain a bank loan (without a previous manufacturing track record), or borrow money from friends and family. Any glitches or delays could have led to cancelled orders. Even had the big order shipped, returns of unsold units could have led to financial ruin.
To read the rest click here: http://www.economist.com/blogs/babbage/2010/11/making_product
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