Crowd and funding

The video above from Vox explains crowdfunding, but not exactly how it works, rather, how it works best. Crowdfunding of one sort or another is often used these days to get money for a new project or product, and it’s a more satisfying model for independent creators of any sort, rather than having to rely on venture capitalists—who in addition to being hard to win over are also often called “vulture capitalists” for a reason.

Raising money isn’t the only, or even necessarily the best, use of crowdfunding, as this video explains. And what works for a specific product wouldn’t necessarily work for makers of creative works that are outside of normal product models.

Another form of crowdfunding was created to meet that need, subscription-based services for all sorts of creators: Writers, musicians, visual artists, video producers, even podcasters, among many others. The best-known of these fudners is Patreon, which is now used by a lot of YouTube creators in particular. This kind of figures because Patreon acquired Subbable, which was created by John and Hank Green, and used by them and a lot of big YouTube creators, including CGP Grey, who I’ve shared on this blog.

The basic point with crowdfunding is that it allows people with ideas to directly fund those ideas, and to aviod the loss of control that would happen with traditional funding models. It’s also a way to build a market/audience in advance of release, which is also great.

However, crowdfunding also underlines the new reality: Thanks to the Internet and all the many ways to connect to it and use it, literally anyone can now be a creator, whether of a product or of content. This is a democratising of creation that was never possible until the Internet came along. But until crowdfunding, especially subscription models, came along, there was no reliable way to actually get paid for that work.

The catch in all this is that someone has to create something that someone else wants to pay for, and a great many people (like me and most of the content creators I know) work without receiving any money coming in as a result of that work. There’s nothing wrong with people who create stuff just for the love it, and that’s sort of the flipside of crowdfunding: Very often people don’t participate in any sort of crowdfunding merely because they don’t want to.

In any case, it’s interesting to watch the growth of crowdfunding, and its increasing importance. These are certainly different times—different even than ten years ago. That's a good thing, I think.