Online crowdfunding offers success for any entrepreneur

There has never been a better time to be a startup company or to have an idea, period.

Thanks to the growing success of online crowdfunding, someone with an idea realizes their dream everyday.


Crowdfunding has always been a legitimate option for raising money, construction for a base for the Statue of Liberty was crowdfunded by the citizens of New York in 1885 through a series of newspapers ads, but it has never been quite so easy or accessible.

Entrepreneurs have been able to use crowdfunding sites like KickstarterIndiegogo, and GoFundMe to raise millions of dollars for their products, or for the promotion of their cause. Some start-ups, such as Pebble – makers of the Pebble Watch whom raised over $20 million on Kickstarter to create their latest iteration of the popular smartwatch - have been able to turn their original product idea into a full-time, ongoing business.

This is why Japanese media giant Sony just launched its own crowdfunding platform, First Flight, to fund ideas generated by its employees.

And there are no signs of the investment networks slowing down. In the last three years, the crowdfunding economy has tripled, according to entrepreneur.com, now being valued at around $5.1 billion.

So it's clear why entrepreneurs love crowdfunding, but it's how much investors love it that has allowed the strategy to thrive.

Pretty much all modern crowdsourcing platforms return investors their money if the creator is unable to raise all of what they set as a goal. Because there is so often safety in numbers, this helps investors feel secure, knowing that if they end up handing out some cash, they'll be one of many and not few.

It's also the desire to be the first to get, or be on the ground floor of, something new. This is what drives people to jump on promising ideas early. Much like an investor tries to boost their financial portfolio, people try to enhance their social portfolio by showing off the cool thing they bought or invested in.

There is simply no other explanation for how Jack Danger Brown, a Kickstarter user from Columbus, OH, raised more than $50,000 for his campaign to make potato salad.Screen Shot 2015-07-01 at 12.36.32 PM

Brown's target was $10 and his goal was only to make a dish of potato salad, but as media attention created a buzz around the campaign, people undoubtedly wanted to contribute just to be a part of the fun.

Of course sometimes the goal is more serious, but the sentiment is the same.

In the last three days, an Indiegogo campaign to help Greece solve its debt crisis has attracted more than 57,000 funders and just under one million euros – however the lofty goal of 1.6 billion euros will likely result in all of this money being returned to contributors.

If nothing else, this should teach us that no idea is too small for those looking at crowdfunding sites for their next investment. Smartwatches, international debt crises, and potato salad can all be wildly successful as long as the creator's ambition is in line with their donation requests.