Russell C. Smith: Feel Good Capitalism: Crowdfunding and Cash Mobs Save the Day
In an interlinked world, where services and products are usually paid for through digital means than with hard currency, a new form of financially helping and promoting start-ups and small businesses has taken hold, and grows stronger each passing month. The phenomenon of crowdfunding has taken off, and shows no sign of slowing down. Start-ups and people with a business or product worth supporting ask to be supplied with funds from the commons. In this case, the commons is anyone who believes enough in someone’s cool product, or start-up company, or cause to send along a few dollars or a much greater sum. Which can add up to millions.
Kickstarter, IndieGoGo, and similar sites provide the way for these new businesses, or sometimes just an idea for a product or business, to present themselves to potential supporters and receive the funds needed to make the leap into the online or analog marketplace. Some start-ups offer incentives in the form of personalized products to people who make large donations, and others small businesses owners simply rely on the good will of their fellow networked citizens. Which amounts to sending money along to support a cool idea as reward unto itself. The cooler the idea, the more funds will roll in.
Corporate America has been slow to provide new and meaningful jobs, so there’s a definite need for start-ups to build the next economy from the ground up. And, as history has proven, money funds ideas. Whether one is creating the next killer app, a game that will blow away every other game, or the most awesome bakery in town, it often takes front money to get started. And, since front money is now available through willing participants, the startups are in the crowdfunding game all the way. Welcome to the reinvention of business funding. Forget venture capitalism, this is capitalism as an adventure. Supporters can chart the daily (or hourly) activity of the developers, people, and businesses they are backing, and feel the buzz when their team wins.
With success comes more scrutiny, but so far so good. The crowdfunding movement is becoming more formalized, and even gaining the attention of law makers, with Congress already passing bills enabling entrepreneurs greater access to capital with fewer restrictions at the outset. Along with the financial oversight component, presenters are becoming savvier as to how to develop more compelling profiles and professional campaigns. Selling any idea on the Internet means participating in the new social networked world, and an engaging, professionally edited video lets presenters tell their story directly to potential supporters.
Cash Mobs work on a different small business support model. Taking place in the analog world, Cash Mobs are organized locally, and target a struggling small business that’s been hand-picked to receive an immediate cash infusion. On the specified day the Cash Mob converges upon the shop/restaurant/gallery, and has agreed to spend a minimum amount of cash. Often, the business gets local media exposure as well as a terrific sales day, and hopefully word-of-mouth marketing for the future.
The Cash Mob movement is turning into a worldwide way to pay it forward. Within a few months it has connected people to small businesses in need of help by way of websites, blogs, rules of the road — and even a National Cash Mob Day. All across the United States, in Canada and the United Kingdom, Cash Mobs have done their part to build a local business movement, based on helping the small retailers. Rather than going for the best deal at the local mega store, the idea is to support local retailers no matter the cost, and keep money in the local economy. If social media has accomplished one thing, its connecting people with talent, ideas, and stuff to sell with those that have the funds to send their way.
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