Crowdfunding has exploded over the last couple of months and came into the spotlight this week when two very different stories went viral. Both crowdfunded their way to what they desired: one wanted a potato salad, and the other wanted a Master’s Degree from Oxford University.
Collaborative funding is another aspect of the wider collaborative consumption (or sharing economy) trend. As already explored in a previous blog post, the sharing economy is embedded in an ecosystem of trust between complete strangers; improved consumption habits and better utilization of resources we already have access to.
Crowd funding websites like Kickstarter or Hubbub allow individuals to mediate funds by asking complete strangers to donate a small (or large) amount of money to a specific cause, project, product or idea. Estimates from earlier this month value the largest elements of this sector at around $15bn globally. Currently, such services are targeted (effectively) at an urban audience, as many rely on large volumes of user-generated data. One such example is controversial taxi app Uber.
The Kickstarter campaign with the goal of $10 and aim to “Basically I’m just making potato salad – I haven’t decided what kind yet” has received backing of over $50,000 demonstrates both that anything is possible on the internet and also the power of specific internet communities (in this case, Reddit). While this campaign has attracted no short measure of opprobrium, it essentially reflects the democratic principle behind this trend – the crowds decide what to invest in. That may be a potato salad – or (perhaps more worthily) a Master’s Degree.
By allowing like-minded people to come together, crowdfunding platforms challenge the role of mediators, who have found themselves under evermore scrutiny since the onset of the economic downturn, and thus follow the current zeitgeist of informed and proactive consumers. This chimes with the broader evaporation of deference that is observed in the decline in trust and confidence in state institutions and many figures of authority, and the rising trust in peer reviews and recommendations.
While this long term trend was arrested during the economic downturn, growing technology access and the expansion of collaborative platforms has seen it accelerate again.