Tuesday, November 30, 2010

SEC Regulations Barricade The Crowdfunding Floodgates

Kevin Lawton Entrepreneur & Author, The Crowdfunding Revolution
Posted: November 30, 2010 11:21 AM

Joseph Pulitzer used a form of crowdfunding to finance the Statue of Liberty. Obama used crowdfunding to bankroll his presidential campaign in 2008.

Crowdfunding is such a pervasive concept that today more than 175 crowdfunding sites exist online. Seemingly, a new crowdfunding site pops up every other day. So it may be surprising to learn that none of them allow entrepreneurs to raise money in exchange for equity in their business. That's because regulatory organizations like the SEC ban it.

SEC regulations that date back to the 1930's usurped entrepreneurs' ability to pitch their business ideas to the general public with the aim of securing funding. Ostensibly, this was done to protect unsophisticated investors from fraudsters, but in any case effectively handed the role of financing new companies over to the wealthy. These days, the regulations don't make sense given the Internet's ability to add transparency to the opaque venture capital model.

In the same way that social networking changed how we allocate time, crowdfunding will change how we allocate capital. Crowdfunding, generally speaking, is the merger of group funding and social networking. While group funding dates back millennia, the social networking aspects of crowdfunding are quite new, and are a major driving force behind this revolutionary form of financing.

Building on social networking, crowdfunding creates a vehicle for people to invest or pledge money to projects for which they have an interest, a passion and an attachment. In doing so, it creates a marketplace opportunity for a diversity of players. Whether financing an indie movie, a fashion line, an around-the-world sailing adventure, or the next Lance Armstrong, crowdfunding is being applied everywhere.

Still, the human race hasn't even come close to integrating the collective wisdom of our multi-billion person crowd with ways to allocate capital. 2 billion people already use the Internet, and that number is increasing rapidly. Until recently, capital allocation was largely the province of a small and entrenched minority. But with the explosive growth of connectivity and technological complexity, the classical models of capital allocation are folding and becoming dysfunctional. What are the weaknesses of old methods, especially the sheer scale of information and ideas, are the strengths of a new model of funding which has the potential to tap an almost unfathomable collective intelligence. Therein lies the immense future of the crowdfunding revolution.

Ironically, while nearly every other market sector has incurred disruption by new technologies, venture finance, which funds many of these new technologies, has innovated little itself. That shows in the downward-trending performance of venture capital, now negative across the industry.

In many ways, the financing of new ventures has shared ailments that we've seen in the banking industry: centralization and intermediation. The solution to these issues is decentralization and disintermediation -- exactly what crowdfunding offers. Whereas classic financing places a premium focus on relatively few financiers, crowdfunding derives its value from the ability to coalesce the collective IQ of many.

But that's not to say crowdfunding is a replacement for classic financing. It's actually something much bigger, and something new. In fact, nimble players, hailing from classic business financing, will use it as a signaling mechanism to access hot new deals they would have never seen. As exciting is the fact that the value of a person's social networks is undergoing an enormous upside transformation. That's because, as David Geertz of the SoKap crowdfunding platform says, "Influencers drive crowdfunding campaigns. These curators of cool ideas are poised to become the new power brokers." With crowdfunding, zero network equates to zero funding, so it follows that those with networking influence enjoy a new form of value.

Efforts are afoot in other countries to enable the massive potential of crowdfunding, recognizing that small businesses are the job-creation engine of the economy. In fact, crowdfunding looks to be one of the most important socio-economic forces of our time. The question is: Which nations will be held back by their unwillingness to change regulations?
I discuss a much deeper and broader look at the crowdfunding phenomena in my book, The
Crowdfunding Revolution, and will continue with a series of related posts on The Huffington Post
To Learn More Click Here

Crowdsource Is Not Open Source

by Simon Phipps Computerworlduk.com

Open source is not the same as crowdsourcing because open source community members are stakeholders whereas crowdsourcers get less than sharecroppers.

I've heard a few conversations in the last week treating open source interchangeably with crowdsourcing. Despite sounding the same they are very different, and the key difference is the ownership of the outcome.

Open source describes a pragmatic projection of the four software freedoms - to use, study, modify and distribute software for any purpose. As I have explained before, people who find value from the software synchronise the fragment of their activities which relates to the software in question in a community of others with related fragmentary needs (but without a necessarily related motivation behind it). The community is of equal peers, with no one participant necessarily benefiting more than any other. True open source communities are "open-by-rule" - they have a governance that ensures no single community member can exploit the others.

Crowdsourcing describes the leveraging of the marginal interest and free time of a large group of people to complete a task that otherwise could not be economically completed. The result typically benefits the initiator hugely, without significantly compensating the participants. It's one of the examples of crowd behaviour James Surowiecki cites in his very interesting book The Wisdom of Crowds.
The new US web phenomenon Kickstarter is a modern example of crowdsourcing. It allows entrepreneurs to pitch their wild idea on the web site, and then offer token rewards in return for donating money to pay for bootstrapping - or in some cases fully executing - the business in question. The web site's denizens pledge relatively small amounts of money and in return get token items - in some cases samples of the product to be created, in others just mementos - in the event that the project is fully funded. Importantly, they get no stake in the business that's created. They are not "investors" - they are instead crowdsourced donors, not even benefitting as much as sharecroppers.

This is not to say I think crowdsourcing in general is a bad thing. I am for example rooting for Mike Salmon to get fully funded today for his proposal to create an animated version of Neil Gaiman's "The Price", and have pledged a small amount towards it because I'd like to see it exist. But it's not the same thing as open source, where a community comes together for their collective mutual benefit and remain co-equal stakeholders.

As Henrik Ingo explains more colourfully, there are some businesses that don't understand this, and exploit community for their sole benefit in the name of open source. But you may by now have figured I don't have a high opinion of that approach!

To Learn More Click Here

Taken from the book Accelerated Disruption by Eric Lefkofsky who invested $1,000,000 in crowdsourcing's Groupon (formally the point)

Accelerated Disruption by Eric Lefkofsky who invested $1,000,000 in the point which became Groupon.com which is about to be sold for $6 billion to Google and which was developed by Andrew Mason out of an altruistic idea called the point

“Disruptive businesses are born every day. Someone has a great idea that offers a better choice in terms of price, convenience, service or functionality, and for a moment, they hold the keys to the remaking of an entire industry.
Yet many of these businesses let advantage slip through their hands over time because they fail to realize that the fast pace of technology allows a challenge to come from anywhere - large competitors or startups -- and overtake them in an instant.
This is Accelerated Disruption. It is business development moving at the speed of the next technological advancement. Businesses that can understand and control the forces of technology will thrive in the coming years. Those that cannot will find themselves displaced.
Accelerated Disruption deals with the following critical startup concepts and more:

* Choosing the right industries to innovate

* Understanding the concept of pain in an industry and turning it to competitive advantage

* Using the strength of conventional wisdom to investigate a disruptive idea and test it under the radar

* Getting the best out of your people through smart automation

* Turning your customer base into a sophisticated R&D team

* Mastering the art of quick-release product improvements

* Promoting your idea in the face of industry and investor resistance

* Developing a capital strategy that supports your business during critical stages of development."

Author Eric Lefkofsky, a Chicago entrepreneur who helped found five technology startups worth more than a billion dollars, explains how

amazon - Accelerated Disrpution

Book review by Harry Gorden

If you aspire be an entrepreneur, or transform your company, this book is for you. If you feel passion alone will succeed or are risk averse, save your money, though all proceeds go to Chicago's Children's Hospital.

Accelerated Disruption is a blueprint on creating a business that delivers unique value and carves profits from large, deeply fragmented markets. The author presents 18 key Laws, how to manage and implement them, steeped with his experiences of successful start ups, as well as ventures gone awry. The opening chapter sets the tone with the Law of Accelerated Disruption, a map on how to disrupt a market by leveraging spend savings, transparent technology and a hybrid of automation and human processes that deliver value customers crave.

AD presents why you must anticipate customer needs, rather than react to customer pain with current processes/providers. Driven by sophisticated mining of customer data, the creation of customized technology solutions delivers value for optimal decision making, eliminating the pain of previous processes. Illustrating lessons learned from start-ups Innerworkings, Echo and MediaBank, AD shows how to discover client pain by asking naive questions. Innovators are a dedicated breed, embracing intentional ignorance to ferret out where pain resides, then create technology applications to address solutions that industry insiders usually miss.

The author's experience is buyers feel no pain while bosses have significant pain. Buyers make their world easier to manage by limiting suppliers, value loyalty over results and predictability over risk for buying criteria. Embracing changing market landscapes, an appreciation of limited asset provider options, leveraging spend are benchmarks senior leadership must seek. In other words if your company has been buying the same way for years, there is great opportunity to outsource this function to companies who utilize technology that leverage buying power, and customized technology for measurable value.

Large corporations are often paralyzed by the weight of their own infrastructure, hierarchies, politics, lack of respect for clients/employees, resisting change or have stopped listening for honest feedback. Of the many success stories illustrated, the newest venture, ThePoint (rewriting the webs high content but lack of discipline into a new space for activism) is very different than previous ventures and yet incorporates the same open mindset, guts, and passion that could dwarf the author's +$1 billion dollars in profit equity generated to date.

AD details why soliciting candid feedback, internally as well as externally, will honor logic in your organization. Learning from criticism rather than discouraging will engage the intellectual capital needed to continuously improve. The pathway for the right information must be build by management with a culture that is sensitive to the business environment. Arrogance, a key indicator of being out of touch with employees, markets and your future must be watched for. The author takes a hard line on the end result of a business venture must make the market better than it was before, fueling customer addiction to your service, with true technology innovations. Indifference leads to commoditized markets whereas engaged passions deliver value for a lifetime of customer equity.

The author believes in developing technology rapidly, sacrificing perfection for speed...a new innovation paradigm. Insightful warnings abound like "If you are not disrupting you are being disrupted." He shows what organized chaos looks like, maintaining key business drivers and appreciates that leadership taking learning into action rapidly is the ultimate competitive advantage.

The case for embracing risk, going hand in hand with innovation, is made to overcome fear. Entrenched businesses embrace conventional wisdom and therefore are risk averse. The author appreciates that humans are great rationalizers, often lacking the courage to face personal weaknesses, fragile egos, criticism, fearing wrong answers, instead of embracing the quest for the right questions.

Though entrepreneurialism a very broad concept, the author presents in a very tight message, simplified with graphic representations, easy to read, understand and act upon.
"Accelerated Disruption" delivers more than any current best seller in the business category. Unlike others, this book demonstrates what you must do to be a success in your own business.
Article Source: To Learn More Click Here

Google May Acquire Groupon for $6 Billion, and It Would Be Worth Every Penny

Forget the rumor that Google acquired Groupon for $2.5 billion; the search giant is about to close a deal for the group-buying service for a whopping $5.3 to $6 billion, according to multiple reports.

It would be worth every overpriced penny.

The deal is worth $5.3 billion with an additional $700 million earnout based on performance, according to All Things D. The New York Times reports that a deal could be completed as soon as this week. With a price tag almost double that of DoubleClick, Google’sbiggest acquisition to date, there are still plenty of ways for this deal to fall apart.

Earlier this year, Yahoo tried to snag the group-buying company, but failed. Google, with its $30+ billion cash reserve, reportedly then offered Groupon $3 billion to $4 billion. However, it was rebuffed, so the tech giant upped its offer.

Groupon pioneered the group-buying model through its deal-of-the-day business model. Launched in November 2008, the company has grown from an offshoot of ThePoint to a multi-billion dollar empire with thousands of employees worldwide. In April 2010, Groupon raised $135 million from Digital Sky Technologies, setting its value at over $1 billion.

If the Google deal does go through at a $6 billion valuation, that would mean that Groupon’s value has grown by more than $625 million per month or over $20.8 million per day. That skyrocketing value is simply mindboggling.

Acquiring Groupon: Overpriced or a Genius Move?

There are many reasons to think that Google would be overpaying to get its hands on Groupon. Any company whose value rises by $20 million per day risks a flameout at the level of Pets.com. $6 billion is a stretch almost any way you slice it.

Still, Groupon has an asset that Google covets so highly that it’s willing to pay billions: local advertisers. Through its massive sales team, Groupon has built an impressive array of relationships with thousands of restaurants, spas and local businesses in hundreds of metropolitan areas. It’s a market that Foursquare, Facebook and Yelp all target, but none of them has figured out the formula like Groupon.

The group-buying website’s value isn’t in its technology — the flood of Groupon clones proves that — but in its unparalleled distribution. No other company in the world has the attention of local businesses that Groupon commands. And no other company has the expertise to turn that attention into a steady and consistent firehose of cash.

It’s that attention and expertise Google wants. This is about taking Google’s ad platform to the next level. It also doesn’t hurt that Groupon is set to exceed $500 million in revenue this year. It’s a multi-billion dollar business in the making.

If Google goes through with the biggest purchase in the company’s history, it will have the upper hand in local business advertising. That advantage could be so great that the courts stop this acquisition from ever happening. That’s why Google wants Groupon so badly that it’s willing to overpay by billions; if all goes according to plan, the search giant will be flooded with so much local advertising revenue that it will be able to buy a dozen Groupons
To Learn More Click Here

Talk of Google Buying Groupon for a Cool $2.5 Billion

Author: Stevie Ray Gilbert
Published: November 29, 2010 at 2:54 pm

Cyber Monday, and apparently Google has its sites on Groupon. As yet unconfirmed, the word is Google will purchase Groupon, the two-year-old worldwide local deals website that already boasts 20 million subscribers and estimated monthly revenues in excess $50 million. The figure for the price tag has settled at around $2.5 billion for the time being, making it a sweet deal for Google, seeing as how earlier this year Groupon was reported to raise funds, enough to make the company worth a nice, round $3 billion.

Business gurus labeled Groupon’s success “unprecedented” early on. Labels aside, any company that has only been around for two years is still “early on.”

VatorNews credits an unnamed insider from one of the companies, but Google isn’t talking and neither is Groupon. Vator insists, however, their source is reliable and says the story is consistent with “the recent string of Groupon acquisition rumors.”

“The rumors may have some merit,” said Vator’s Faith Merino in a November 19 article where she pointed to a recent Groupon tweet: "Hang in there, everyone: big things are afoot at Groupon.com today and we apologize for the site being so slow. We're on it. Updates soon..."

In that same article Merino quotes Groupon’s Julie Mossler, “Any rumors are way more interesting than us saying 'no comment.”

A Google takeover of Groupon would have interesting implications for Groupon’s partnerships with Yahoo and Ebay, two relationships that were preceded with glorious fanfare and rumor as dazzling as today’s.

Groupon and eBay seems like a natural fit. The two entities joining forces meant eBay shoppers could get the same kind of local deals using Groupon’s geo-targeting technology without being one of the 20 million Groupon subscribers. Talk about incentive; if you bought Groupon merchandise via eBay, you would receive five-percent of the purchase price back if you subscribed to the eBay Bucks Rewards Program.

This is the kind of acquisition that keeps the Google Campus stimulated. One can almost sense the collective rolling up of sleeves and rubbing together of palms while the nerds figure out how to integrate Groupon’s non-stop cyber machine, a globally aware consciousness that keeps track of all the best deals (in 29 countries) all over the world right down to your neighborhood.
Read more: http://technorati.com/business/article/talk-of-google-buying-groupon-for/#ixzz16lm5rz49

Read more: http://technorati.com/business/article/talk-of-google-buying-groupon-for/#ixzz16llz3dwD
Read more: http://technorati.com/business/article/talk-of-google-buying-groupon-for/#ixzz16llt5moX
To learn more click here

Evly.com first look: Will this new crowdsourcing social network work?

By Martin Carstens

Sometimes it just so happens that a new technology service really speaks to you. The first time I saw Groupon, I thought that it was one of the most compelling services seen in quite some time. Clearly I was not the only one. Google is rumoured to have made an offer to acquire Groupon for US$3-billion. My first look at Evly however did not elicit quite the same initial reaction.The crowdsourcing social network had a soft launch this month. Its founder, Eran Eyal, of Springleap fame, touted their efforts as cutting-edge and having the potential to revolutionise the internet. Based on mathematical models for businesses with viral loops, he ambitiously described a scenario that could see Evly amass “over 36-million users in its first 18 months”. If this came true, it would easily make it the fastest growing website on the African continent. Some have rightly pointed out that Eyal and his business partner Eric Edelstein have had local success over the last three years via their T-Shirt crowdsourcing startup, Springleap. Based on the popular Threadless, Springleap’s local focus sees the company using 3 500 artists who form a part of a community of about 25 000 subscribers. That’s great, but its a rather long way off from 36-million users. It may not be wise to take the success of Springleap to predict Evly’s fate. There is no doubt that Eyal and Edelstein are savvy entrepreneurs, but can taking the Springleap crowdsourcing model and handing the keys to the public really produce similar success stories? With Evly, the idea is to give anyone the ability to create initiatives based on crowdsourcing. I wouldn’t be surprised if someone attempted to create another version of Springleap using Evly, but success depends largely on the people driving the initiatives and not necessarily the tools they use to build them.
Hands-on with Evly’s site building tool Evly’s site-building tool is at the heart of the service, allowing businesses and individuals to source input from the members that become part of their social network. Very simply put, you can think of the tool as a Ning social network, with a Q&A element added to it. You start by choosing from a list of pre-defined themes. Next is the most critical part: You are presented with a list of templates. Depending on the template you choose, your Evly social network will have a certain design to facilitate the particular crowdsourcing input you are looking for. The templates currently available are “Ideas”, “Answers”, “Solutions”, “Designs”, “Advice”, and “People”, with “Money” shortly to follow.
If none of these templates are useful, you are also free to create your own using the “Custom” option — for example, if you’d like to source friends for a party you’re having.
Each of the templates have more fine-grained setup options. If you choose the “People” template you can select to source people for business, projects or research. If you choose the “Designs” template, you can select to source designs for business, projects or products.
To Learn More Click Here

Saturday, November 27, 2010

The 10 Most Successful Crowd-Funded Projects From Kickstarter

Posted by Jay Yarow

New York startup Kickstarter is one of the most interesting startups out there.
It provides a platform for people to raise money for projects. If people hit the target they set, then Kickstarter gets 5% of the money raised.

Over $20 million has been raised through Kickstarter so far. We estimate Kickstarter will generate approximately $2 million in revenue this year alone.

What makes for a good Kickstarter project? We've skimmed through Kickstarter's many projects and picked out 10 biggest successes and tried to figure out what works.

The number one thing we see: Make sure you're actually giving something to people. Especially a physical object. The number two thing: Make sure you're targeting a passionate crowd at the right time.

1. "Save Blue Like Jazz" raised more money than any other project

"Save Blue Like Jazz" raised $345,992 to save a movie project that was going to be canceled. The book "Blue like Jazz," was turned into a film, but ran out of funding before it could hit the big screen. Supporters started a Kickstarter project to get it going and created what they call, "the largest crowd-sourced creative project ever."
What was the key? It appears the key here was that it was a project with millions of fans already built in.
Incentives? The minimal donation landed you some goodies like posters, and script pages. The director of the movie is calling people to personally thank them for donating.
To Learn More Click Here

Friday, November 26, 2010

Help Make the Rap Guide to Evolution DVD More Awesome Posted by David Bruggeman on November 22, 2010

Baba Brinkman just announced a crowdfunding challenge for the upcoming DVD for his Rap Guide to Evolution. The videos for the songs are being filmed – a grant from the Wellcome Trust is enough to support basic production costs. But to be an effective educational (and entertainment) tool, the videos could use more in the way of animations, multimedia, and other material.

Given the groundswell of support for Brinkman and his science-themed projects, he is appealing for folks to essentially pre-purchase the DVD. But it’s a bit more involved than that. His crowdfunding challenge is to raise 10 thousand pounds in 60 days (by January 21). Donors can contribute at different levels, and will get the following depending on their donation:
As of this posting, Brinkman’s challenge has already gathered nearly fifteen hundred pounds (it’ll go over that amount once my investment clears), with an average donation just south of thirty pounds. Since both the Rap Guide to Evolution and the Rap Guide to Human Nature are available for free, a healthy donation to this project seems a reasonable course of action to support a talented fellow seeking to support science.

To donate you’ll have to register with Crowdfunder, and for those outside the U.K., Paypal can handle the currency differences. There will be a small Paypal fee. Should Brinkman not make the goal, all money will be refunded. Since the videos are shot and edited with the Wellcome Trust grant, all that will be lost is what will boost the videos from cool to awesome.

About Baba Brinkman
Baba Brinkman is a former tree-planter who worked in the Rocky Mountains of Canada every summer for more than ten years, personally planting over one million trees. He is also a scholar with a Masters in Medieval and Renaissance English Literature. His thesis drew parallels between the worlds of hip-hop music and literary poetry. After graduating in 2003, Baba began his career as a rap troubadour.

Since 2004 Baba has toured his award-winning hip-hop theatre shows, “The Rap Canterbury Tales”, “The Rap Guide to Evolution” and “The Rebel Cell” (with MC Dizraeli) to dozens of cities around the world. “The Rap Guide to Evolution” won the Scotsman Fringe First Award in Edinburgh 2009, and is set to transfer to New York in the Spring of 2011. Baba is also the founder and president of the independent music label, Lit Fuse Records. When he is not on tour, he resides in his hometown of Vancouver.

More information about Baba can be found at www.babasword.com
To Learn More Click Here

Crowdfunding: Charles Armstrong from Trampoline Systems on the practicalities of crowdfunding.

Reprinted from http://www.nicksmith.co.uk/blog/2010/02/01/crowdfunding/

On Friday I went to Minibar, the first to present was Charles Armstrong from Trampoline Systems on the practicalities of crowdfunding. These are my notes, they may not make complete sense, although they are reworked somewhat from what I took at the time. My advice: there may be inaccuracies and typos here, so if it’s important check, as always be especially careful with legal info. Enjoy :)

Crowdfunding works in a variety of ways but is difficult to set up legally. A research project for the Open Society Institute couldn’t come up with a way for it to work.

Charles describes himself as a ‘corrupted social scientist’. His talk was designed to cover how to finance ventures. There are four conventional ways: venture capital, angel investors, family loans and loan finance.

Loan finance is under used. There’s a fixation on venture capital (VC) in the tech world. VC is problematic. Venture capitalists insist on preference stock, different from ordinary stock. They usually want extra rights and extra protections, they’re taking a risk yes, but anyone else investing in your business do to, for example friends and family. Why should venture capitalist’s be different?

Venture capitalists will lure you with high valuations for your business. But they completely screw with your corporate governance and articles. For Trampoline their articles became 12 times longer once venture capitalists became involved. You also suddenly have to hire lawyers, of course there are bills associated. Venture capitalists also use stealth control.

There are all kinds of agendas that are connected with VC fund life-cycles. You’re tied into the life-cycle of the VC fund. He’s not saying venture capitalists are bad, but there’s not enough discussion of their drawbacks. The recession and what’s happened over the last couple of years has had affects that some people think means VC funding won’t exist in the same format in five years time. They’re investing in fewer and larger deals. They’re focussing on seed and post-breakeven businesses. This leaves a large swathe of businesses not covered by VC.

What is crowdfunding?

The name comes by applying the concept of ‘crowdsourcing’ to that of money. It’s based around using the internet to build a much larger group of private investors. It’s a shift to a much more transparent form of investment (normal VC is very secretive). With crowdfunding everything goes into the public domain.

The concept of crowdfunding came from the early years of the 90s. The first wave started with the music industry. Sellaband.com and BandStocks.com are examples of crowdfunding. An artist puts themselves on the site and fans get a share of the proceeds if they make money. This works well in the film and music sectors where fan bases already exist.

The second wave (of which KickStarter.com in New York is one) was in the non-profit world.

The third wave was based on journalism. Conventional journalism was in decline. Spot.us is a site where journalists pitch ideas.

Trampoline started with VC funding and raised $6m in 2007. They realised it wasn’t a good time to bring in VC funding so they looked for alternative ways to do it. They spoke to their solicitors about crowdfunding, but lawyers don’t like innovation. The legal sector is based on precedent, their solicitors simply said crowdfunding is illegal.

Instead, they found a lawyer who wasn’t dismissive. Francis Irvine does work with the Open Rights Group, he likes innovation. After two months of scratching their heads, they found a legal way to do crowdfunding. They set themselves a £1m target to raise within a year. They’re doing it in a few tranches, they’ve closed their first and the second will close in the Spring.

This method of funding is not mainstream yet, but it will be. However it’s not for the faint hearted.


They’re not victims to the VC fund life-cycle. They have a much bigger pool of influential people (investors) that will make them successful (Trampoline is only just seeing the benefits of this). Some would think having so many investors/voices would be a nightmare? However, arguing with investors is good, it challenges your ideas.

It’s not widely known, but the UK Government runs an Enterprise Investment Scheme which is unbelievably good. Wealthy people get 20% written off their tax bill and are covered for 60% of ther investment if the company goes bust.

The FSA is a nightmare though. If you get it wrong you are personally liable (not the company). It’s not easy to get started, you need to work your networks hard, do due diligence and speak to a lot of people. The Trampoline website has a few case studies. However you won’t find any content inviting people to invest on their site, they have to stay within the law.


Q. There seems to be a bias towards rich people. In the FSA regulations, if you’re seeking investment you can’t advertise it to the world (this protects the grannys). The FSA says you need to be a high-net-worth individual or a sophisticated investor to do it, but Charles how do you do it?

A. It’s illegal with a private company to incite people to invest. However, journalists can say anything they want. Journalists are your friends. You still need a website, but Trampoline’s is full of case studies. There are still exclusions: high-net-worth means £300,000 in net assets not including their main residence. You can tell these people or someone who works in the finance industry (a ‘sophisticated’ investor) that you’re looking for investment. But even if you tell them, you still can’t give them a business plan. You have to set up a labyrinthine system to get them to the next step towards investment. Sellaband and BandStocks are not selling equity, trampoline are the first to do this.

Q. What type of person are we talking about as an investor? Who invests in you?

A. There are two categories. Either 3rd or 4th levels down in their network or friends (friends of friends). Also, people who’ve read about them in TechCrunch or some other publication, they’re often semi professional tech investors.

We traditionally assume that PLCs float their shares on the stock exchange, really they can give their shares to anyone, Charles is looking at ways to reverse engineer a public company to be crowdfunded.

To Learn More Click Here

Using Social Influence And Crowdsourcing To Elevate The Sesame Street Brand

Taking a page from Betty White, Sesame Street is turning to its fans to help land Cookie Monster a gig hosting SNL. A YouTube video and Facebook page feature 4 minutes of Cookie Monster auditioning for SNL, and have already garnered nearly 200,000 views on YouTube, and nearly 40,000 Facebook fans. Even a kid-targeted property like Sesame Street has also turned to social influence and crowdsourcing to help elevate the brand.

The purpose? We’re guessing it has more to do with re-igniting interest in the property among the adults that actually watch SNL and grew up with the show (unlikely many of Sesame Street’s core pint-sized audience know what SNL or who Lorne Michaels is).
To Learn More Click Here
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How Threadless plugged into Facebook with 190,563 fans

Threadless Weaves its Awesome Customer Support Experience Directly into Facebook, Providing a Smoother and More Interactive Customer Experience

New Support Access Powered by Parature for Facebook™, the Industry’s First and Only Social Support Application for Directly Engaging Customers and Fans through Facebook

Chicago, IL and Vienna, VA (Vocus) November 18, 2010

Threadless.com, a community-driven online design platform for retail, and Parature, a global leader in Web-based customer service software, today announced Threadless has extended its customer support and service experience by directly integrating support into the world’s most popular social network, Facebook. The new support service can be accessed at Threadless’s Facebook Page, and is powered by the first and only social support application for directly engaging customers and fans through Facebook, Parature for Facebook™.

Customers and Threadless’s more than 180,000 Facebook Fans are now able to rapidly resolve support issues by simply clicking on a Support Tab from the Threadless Facebook Page. Fans and Customers can now:

Search a knowledgebase of frequently encountered issues and resolve support issues quickly and independently;

Submit a trouble ticket if unable to resolve a support issue; and,
Post comments on the Threadless.com Facebook Page and receive an individualized response rapidly.

Threadless is known globally for its pioneering approach to crowdsourcing and social media innovation, focusing its business on helping customers build social art and design communities that make the creative and fashion design experience more collaborative, fun and enjoyable. Providing integrated support with Facebook is another crucial step in Threadless’s evolution as a social media innovator.

"We are really excited to extend our support experience to our growing community of fans and customers through Parature for Facebook,” said Brianne Hattaway, Director of Customer Support for Threadless. "Threadless's approach to support is shaped by our online community and their need for transparency and immediacy. We can reach out to our customers on Facebook even more than before and give them a fluid support experience across different channels with the same rich FAQs and personalized support that Parature enables on our site."

“In today’s increasingly social and collaborative world, customers demand support when and how they want it,” said Parature Founder and Chief Strategy Officer, Duke Chung. “With over 500 million members at last count, and recently surpassing Google as the most visited site in the United States, according to HitWise, companies are compelled to provide direct and real-time support, sales and service through Facebook. Parature for Facebook enables them to do just that.”

Parature for Facebook is the industry’s first and only customer support application for directly engaging customers and fans through Facebook and is delivered through the cloud and charged by subscription. Customers can monitor Facebook Wall conversations, posts and comments in real time, appropriately route, respond and report on social interactions, gaining an enhanced view of customer engagement and support effectiveness. With Parature for Facebook, corporate Facebook fans can search knowledgebases, submit tickets and chat directly with customer success agents without leaving Facebook. Demos are available for viewing at http://www.parature.com/res_demos.aspx

Parature for Facebook can be purchased as a stand-alone application or as part of the Parature Customer Service software suite.

Founded in 2000 by entrepreneur Jake Nickell, Threadless has evolved from an online t-shirt design company into an international community-driven design platform featuring merchandise designed by and for its fan-base of nearly one million users. Considered the "poster child" of crowdsourcing, Threadless boasts a diverse community of designers, artists and general consumers from around the world who submit and vote on designs for ongoing competitions. Winning designs are produced and available for sale at Threadless retail locations and online store, and the winning designers receive $2,000 plus a $500 gift certificate. Threadless integrates its passionate, authentic and highly active community into every aspect of its business and continues to offer them new design opportunities through strategic partnerships with major brands including Disney, Dell, Griffin and Havaianas.

Parature, Inc.
Parature enables organizations to better serve, support, engage with and retain their customers via the Web. Industry-leading, Web-based Parature Customer Service™ software provides customer service organizations with a comprehensive, multi-channel way to meet the growing expectations of their customers. With more than 10 years experience, Parature serves organizations in a wide variety of industries worldwide and helps support nearly 20 million end users. Parature is among Inc. Magazine’s Top 100 Fastest Growing Private Software Companies and is the recipient of numerous product, technology, and leadership awards. Today, the Parature name is synonymous with innovation and value in Web-based customer service software, strategies and best practices. Parature is headquartered in Vienna, Virginia with offices in San Francisco and the U.K. For more information, visit http://www.parature.com or follow @parature on Twitter.

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Thursday, November 25, 2010

Jazz artists turn to Kickstarter for funding

by Chris Barton Los Angeles Times

With a tough economy sending artists and food entrepreneurs toward grass-roots "crowd-funding" sites such as Kickstarter, it's no surprise that jazz musicians have started looking its way as well. Facing a cratering music industry, some of the worthy projects looking for support online include Seattle trumpeter Jason Parker's quest to fund his quartet's tribute to Nick Drake's "Five Leaves Left" and the New York City-based Search and Restore's ambitious $75,000 goal to create a year-long video documentation and online hub for the city's ever-percolating "indie" jazz community.

On the local front, Long Beach-based composer-guitarist Chris Schlarb joined Kickstarter to finance a limited, 180-gram vinyl release of his album "Psychic Temple," a contemplative, four-song odyssey that was only released digitally today via Sufjan Stevens' Asthmatic Kitty label. As one half of the atmospheric drone-jazz duo I Heart Lung, Schlarb's vision has grown even more ambitious with this record, which features 29 musicians that include members of the Philip Glass Ensemble, the Brian Blade Fellowship as well as local fixtures such as Mike Watt, Steuart Liebig and Anthony Shadduck.

In terms of categorization, Schlarb admits in the album's promo video (after the jump) that "Psychic Temple" doesn't fit squarely into a traditional view of jazz, but it's easy to hear a spiritual connection. Touches such as sweeping nonverbal vocals, the fuzzily elastic bassline cascading over "White Dove in the Psychic Temple" or the keening trumpet of the Empty Cage Quartet's Kris Tiner on album-opener "I Can Live Forever If I Slowly Die" are as reminiscent of the epic scope of some '70s jazz as the cinematic excursions of modern post-rock groups such as Chicago's Boxhead Ensemble.

In keeping with Kickstarter's rules, Schlarb's effort is an all-or-nothing proposition -- donations are only collected if his $3,555 goal is met by a Dec. 2 deadline. Following a similarly tiered system that drummer Josh Freese used to court fans for his solo album last year, Kickstarter artists often include amusing incentives with higher donation levels. Search and Restore's offers include a home-cooked meal from the organizers or an improvised musical voicemail from the Bad Plus' drummer Dave King, while Schlarb's pot-sweeteners range from a digital download at the $10 level to a personal performance anywhere in the U.S. for the most deep-pocketed donor.

At the time of this writing, Schlarb is a little more than a $1,000 away from his goal, an effort he further described in an e-mail as "No debt. No distribution. Just music." What could be more revolutionary than that?
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Wednesday, November 24, 2010

Alms for the Creative: Crowdfunding means passing on traditional funding to pass the collection plate

Move to change securities regulations could mean big changes in the micro-funding model
by Josh Gross - Boise Weekly -

Travis Swartz wanted to make a movie, but he didn't have any money. And while the Boise resident had made zero-budget films before, he wanted this one to be different and that meant he needed some dough.

He could have pounded the pavement shopping his script about an unloved janitor with eight days to live to aspiring producers and so-and-so's rich uncle looking for the $25,000 needed, but Swartz didn't feel right about it.

"If we're all being honest with independent film, it's not a smart investment. It's an investment of love," Swartz said.

Instead, he chose to delve into the growing world of crowdfunding, where small, individual contributions provide a new way of getting projects off the ground, ranging from independent films or music to a hobbyist's attempt to create nuclear fusion in his Brooklyn garage.

Though there are several different variations on the crowdfunding model, the idea is to use the web to pitch an idea and collect small donations to fund it. Essentially, a project manager --an artist, filmmaker, journalist, scientist, etc.--creates a project profile and pitch on a crowdfunding site--like Kickstarter or Indiegogo--then uses social networking to solicit small contributions from a large number of people. In return, contributors receive non-monetary gifts relative to the amount of their contribution.

"When I first started looking into crowdfunding I was uncomfortable with it because it seemed like handing out the hat for nothing, but I discovered that's not what it's really about," Swartz said. "It's like pay-in-advance. You get something in return."

For donating to Swartz's film, Nobody Cares, contributors would be rewarded with what amounted to tokens of appreciation. A smaller donation would get a signed DVD, where a larger donation would guarantee a luxury private screening and the donor's name in the credits as a financier. Essentially, Swartz was pre-selling tickets to and copies of a movie he hadn't actually made yet.

From a promotional standpoint, Swartz's crowdfunding campaign would have made the audience personally invested in the film's progress in the same way comic book fans obsessively follow every step of film adaptations.

"It's really important to build an audience into the filmmaking process," Swartz said. "The old way is to send [a film] out to festivals and hope it builds an audience. Crowdfunding is really a process of not just raising the money, but raising the money from the audience that is really going to appreciate it."

The combination of the promotional and financial benefits of crowdfunding may be so successful, in fact, that even established institutions with solid donor bases are looking to augment their budgets by passing the virtual plate. In Boise, for example, Boise Contemporary Theater recently used Kickstarter to produce its 2010-2011 season opener, The Krumblin Foundation.

And while members of Boise's artistic community are piling on the crowdfunding gravy train to cover the cost of albums, plays and even teaching expeditions to Kenya, what many don't realize is that they're also firing the opening shots in what could be a major revamping of the laws that dictate how funding is done in this country, from the arts to small business.

As things stand now, crowdfunding contributors are sidestepping longstanding laws of the land. They are considered "donors" and not "investors" and can only receive non-monetary gifts. If they were to benefit financially from their donation, it would be in direct violation of the Securities and Exchange Act of 1933, the law passed to prevent the sort of practices that brought on the stock market crash of 1929 and the Great Depression.

The act "Requires that any offer or sale of securities using the means and instrumentalities of interstate commerce be registered pursuant to the 1933 Act, unless an exemption from registration exists under the law."

No exemption exists for the type of small-scale projects crowdfunding is typically used for. Anyone who wants to offer financial returns must register with the SEC, a process often more complicated and expensive than the project itself.

"What those laws were protecting against was the oil speculators knocking on widows and doors," said Danae Ringlemann, co-founder and CFO of IndieGogo, a crowdfunding site that operates in more than 130 countries. "But that was an age when communication was literally knocking on doors. You had to get physical reports on how projects were running."

According to Ringlemann, the transparency brought by the Internet is the single biggest change since the laws governing these transactions were written. And though the Internet has provided tools to more effectively assess risk and track projects, the laws are still strictly enforced.

"We're not dealing with big amounts of money here," said Tim Kappel, a Nashville-based entertainment lawyer who specializes in crowdfunding. "There are ways to structure in protections for the creative investor. Meanwhile, you've got the stock market, which is a big roulette table and people treat it like a casino or a race track."

Kappel published a paper in the Loyola of Los Angeles Entertainment Law Review, explaining the differences and problems between what he calls "pure patronage" and "patronage-plus" models--the "plus" being financial returns.

"The U.S. market poses unique and significant legal obstacles--specifically laws governing gambling and the sale of securities--that could derail any effort to import a patronage-plus ex ante crowdfunding system for the recording industry," Kappel wrote.

Kappel translated that from law person to lay person.

"When you start offering a share of the profits that are created through the sale of distribution of the product, then you're dealing with investment laws," said Kappel. "If someone wanted to offer more than a tote bag, if someone wants to offer an investment, they can't. They would certainly run afoul of SEC laws. And that has to go through a ton of regulation as a public offering."

Aside from contributors' inability to make money, this creates an odd loophole in the process. Since contributors aren't legally investors, that also means they don't have any ownership or control. And while this is certainly an arrangement artists prefer, it also means that there's no back-end protection for contributors. If an artist doesn't follow through on a project, there isn't much that can be done about it. While some crowdfunding websites hold the money as pledges of support until a goal is reached, others do not, and almost universally, there are no guarantees that a project that has been funded will reach fruition. Theoretically, project managers are legally culpable, but since the average contribution hovers around $25, the chances of a lawsuit from contributors are minimal.

It's what Kappel calls the difference between a legally enforceable right and practically enforceable right.

In Kappel's paper, he cites European crowdfunding websites such as Bandstocks, which allows bands to sell 10-pound shares in their album projects. Bandstocks, however, provides back-end protection by suing on behalf of contributors should a project get dropped.

However, Ringlemann said dealing with a donor unhappy about incomplete projects hasn't yet been a problem for Indiegogo.

"It's always possible someone can take the money and run off to Bermuda," she said. "But the probability is incredibly low."

Ringlemann said the two things that make it unlikely are human nature and transparency provided by the Internet.

"No one raises money from 100 percent strangers," she said. "Crowdfunding can be a way to raise money from friends and family more quickly."

Ringlemann cited a crowdfunding campaign to buy a new computer for a student as a birthday present. Her friends all pitched in a few bucks and she had enough for a new computer within several days.

Ringlemann said in a typical campaign, initial donations by friends and family serve as a vetting process. People aren't quick to financially cross those closest to them. And while strangers may eventually donate to a campaign, it's unlikely to reach that point if friends and family aren't willing to risk a few dollars first. It's part of what Ringlemann calls a "social score."

"Right now, we're judged by a credit score," she said. "But over time, I think that is going to adapt to include how good you are at following through on things like Facebook and Twitter as a way of further assessing your credibility. When you see people with great followings on Twitter, they have them because they're doing good work."

Ringlemann said a crowdfunding scam is hard to run online simply because there are so many options, and a project manager's social score can be easily gauged by prior successes and failures listed on the project page.

That transparency is why the process has such appeal to both project managers and contributors and has been successfully employed for such a wide variety of projects.

Longtime BW columnist Ted Rall even used crowdfunding to raise $25,999 for his recent expedition to Afghanistan to cover the research costs of a new book. The money covered one month's expenses--an amount Rall claimed in his pitch video would normally prohibit reporters not backed by large corporate sponsors from making the trip. He and his colleagues, cartoon journalist Matt Bors and web cartoonist Steven L. Cloud, claimed to be the only unembedded reporters operating in the nation at the time.

For their part, Rall's 211 backers received, or will receive, gifts like signed copies of his book, original sketches and thank yous in the book's liner notes. One contributor bought dinner and drinks with the author for a cool $1,000.

Since crowdfunding appears to be an effective way to raise capital, small businesses are looking at how it could be used to their benefit. But under current SEC laws, such a venture would be illegal. That's why a growing movement is trying to change the law.

"Like everyone, I have more ideas than I pursue. And for as along as I can remember, I thought there should be a way for people to invest in me, in others, with small amounts of money. Not just as a means to do it, but as external motivation," said Paul Spinrad, project editor for Make magazine, who is leading the charge to change the SEC laws and make crowdfunding easier.

He tried to put that into action with the Premises Premises website, which was a rudimentary attempt at crowdfunding. Spinrad said it failed because the site didn't frame ideas well enough. Since then, more successful crowdfunding sites have incorporated the best elements of social networking.

When he learned about Kickstarter, Spinrad wrote several guest opinions on the popular blog boingboing.net about the potential of investing in intellectual property. People seemed interested, so he took that energy and decided to see what could be done with it.

He discovered that the SEC accepts public petitions, which are posted on the SEC website for public comment.

Spinrad decided to levy the crowd to push the SEC to write an exemption to the Securities and Exchange Act for investments of less than $100 using the comment process.

"Even if just 50 people submit comments, it's going to be way more than they've dealt with before," said Spinrad. "It's a backwater."

The exemption wouldn't cost anything, but it could open new ways for investors to make money.

"Securities deregulation, people are down on it right now," Spinrad said. "And generally I am as well, but this is not high-level insider corporate gaming. This is the kind of deregulation that a leftie can love."

Spinrad acknowledges that comment-bombing a site could backfire, but he feels the comment process is in line with the principles of crowdfunding, making it the ideal method.

"I don't want to antagonize the SEC," Spinrad said. "This is to inject it into public dialog. If they don't want to do that, that's their bad. But if it's a proposal worth consideration, then they should consider it."

It seems to be working. His campaign has levied 39 comments so far, including several from CEOs and an in-depth analysis of the exemptions potential from an associate professor of finance at Georgetown University. The American Sustainable Business Council, a prominent lobbying group, picked his cause as one of its official campaigns, and Spinrad even got an unsolicited letter from the White House Office of Science and Technology Policy encouraging him to attend and push for the exemption at an annual open forum the SEC holds to meet with small business leaders.

While Spinrad sees the exemption as a way for artists to fund projects, Jenny Kassan, co-director of the California-based Sustainable Economies Law Center--who is helping Spinrad with the petition--sees it from a different perspective. For her, this is the only way small businesses will ever be able to get a fair shake.

"If you care at all about supporting small, locally owned businesses in your community, this is a crucial issue," Kassan said. She contends that without it, large corporations will always have an advantage over mom-and-pop stores.

"A lot of people don't understand securities regulations in the first place, so they don't understand why we need to do this," she said. "But the more people realize how hard it is for a small business to raise money legally, and that people are not allowed to go out and ask their friends or their community for an investment, the more excited they get. Especially now, in this climate, when businesses are suffering."

In Kassan's view, the idea that people can freely stroll around dropping money on the lottery or in a casino, but that the government won't let them risk it on an investment is absurd.

"Let's leave it up to the people," said Kassan. "It's their $100. They're not going to die if they lose it."

Kassan sent a nine-page letter to the SEC in late June outlining the proposed changes in detail, including several caveats to ensure it isn't exploited.

No. 1: No purchaser may invest more than $100.

No. 2: The aggregate offering is limited to $100,000 maximum.

No. 3: Offerors must be individuals. Offerors may not be entities and must be United States citizens or legal residents.

No. 4: No offeror may have more than one offering open at any time.

No. 5: All offering materials and communications must contain a disclaimer clearly stating the possibility of total loss of the investment and the necessity of careful evaluation of each offeror's trustworthiness by the individual purchaser.

The letter also includes detailed descriptions of the benefits Kassan expects to see as justification.

"It's a totally crazy long-shot," she said. "Especially in this environment. Unfortunately, a lot of really bad players have made people really nervous about doing anything that would loosen up the rules at all.

"We wouldn't do it if we didn't think there wasn't a chance," Kassan added. "It's a very reasonable request."

Even if Ringlemann and IndieGogo didn't stand to benefit from the potential exemption, she said she'd support it. One of the things that drove her to start IndieGogo was being the child of small business owners and watching them refinance their house and cover business expenses with credit cards for 30 years.

"Ever year, 7 million ventures start," said Ringlemann. The average outlay is $45,000. But the average need is only $4,500. Most businesses are something like a hot dog cart. So people are financing it themselves with credit cards. If there was an easy way for people to raise 10 grand, then that could be the bread and butter of America.

According to Ringlemann, Kassan and Spinrad, a SEC exemption on small-scale investments is that way.

"There are two ways to protect people," Ringlemann said. "Require companies to do risk disclosure or cap investments. Second [option] wasn't used in 1933 because it was too hard to track. The Internet has changed that. So the question becomes what is the appropriate level? $100? $1,000?"

Spinrad, the arts enthusiast, sits at the $100-end of the spectrum. Investors and financiers are pushing for a larger, and therefore potentially profitable, cap.

But even if all the legal minutiae is resolved, there's still the question of why anyone would fork over their hard-earned $20 to someone else's crazy idea rather than their own.

For Megan Egbert, a Boise librarian, it started out as helping her friend Gregory Bayne with his film Driven.

"The platform allows someone not only to ask for money, but to show what they're doing," she said. "Plus, it makes it not awkward if you want to refuse."

Bayne campaigned to fund his soon-to-be-released documentary about mixed-martial arts fighter Jens Pulver getting ready for his underdog shot at the big-time. His effort has been used as a model of how to use crowdfunding.

Bayne first tried to raise money the traditional way, but he started running out of time before Pulver's main event. So Bayne made a trailer and put it on Youtube.

The trailer got more than 10,000 views in one week, which proved there was an audience, so he decided to try crowdfunding. His goal was $25,000 in 20 days, but he ended up with $27,000 and a fanbase itching to see the film.

Bayne was also able to use the contributors as a test audience, sending out clips and rough cuts to see how people responded.

After contributing to Driven, Egbert became curious and looked for other causes to support, giving to several including Travis Swartz's film.

"I wouldn't give money to someone if I had doubts about it. I've donated pretty small amounts to people, so if someone takes my $25 and runs I'm not going to be that worried about it," she said.

Paul Carew, another Boisean who contributed to Bayne and Swartz had similar sentiments. He was friends with both of them, but he also appreciated the efficiency of the process.

"I'm a business owner and a very busy person," said Carew. "In the situations where I used Kickstarter, it was a gut decision, and I knew I could plug in a credit card in 30 seconds and be done with it."

While the ease of donating to a project is attractive to donors, it's also drawing the attention of established organizations, which see it as a way to reach out to a new funding pool. Boise Contemporary Theater's Artistic Director Matthew Cameron Clark said in an age of declining corporate contributions, The Krumblin Foundation wouldn't have been possible without the campaign.

"New work costs more," he said. "Time for development, commissioning, fees, etc. We had to find new way to fund additional expenses."

Those new ways were to offer gifts ranging from free drinks to signed scripts to donors' names being written into the script (only $1,000 or more). The campaign was so well received that BCT raised $12,645 from 178 backers.

Still, crowdfunding isn't always the answer.

After only a few weeks, Swartz decided to cancel his Kickstarter campaign to fund Nobody Cares.

"With Kickstarter, I found I was spending my pre-production time being a fundraiser as opposed to being a filmmaker," Swartz said. "I think if I'd done it earlier and had a different plan for it, it would have worked out well. But I started a bit late, and I ended up spending exponential time on it because you have to hit that goal by a certain date."

Instead, he set up a PayPal account on his own website that people could use to contribute, and found a partner who took care of many of the equipment costs, making it possible to start production. Swartz wrapped shooting in early October and is in the months-long editing process.

To complete the project, he said he will need to continue raising funds, and though contributions have trickled off since the initial push, Swartz feels it will pick up again once he's cut enough of the film to show people what they're paying for.

"[Contributing] seems more a reaction to how much energy people see you putting into the project," Swartz said. "When they see that you have something, as opposed to the promise that you might have something, it has more impact."

At last report, Swartz had raised $3,100, far short of his initial goal of $25,000. But he's not concerned.

"I'm shooting the movie," he said. "That's the most important part."
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Amazon Goes Hollywood With Amazon Studios – Filmmakers And Screenwriters Wanted

by Grant Crowell | November 24, 2010 from reelseo.com

I interviewed a spokesperson from Amazon.com’s new online business, Amazon Studios to learn about the program’s new business model for discovering and paying new filmmaking talent with an eye on making big motion pictures. But do they plan to expand beyond feature length-films, and offer these same business opportunities and incentives to web-based video producers as well? And is part”democratic revolution” in movie studios as they tout, and part big-studio sellout?

Grant: Is the contest for fiction work only? Or can it include documentary-style videos (and scripts/screenplays)?

Amazon: The contest is not for fiction work only. Scripts or test movies can [also] be documentaries. The documentaries, like any script or test movies, must be original.

Grant: Are there different categories of awards – say for comedy, drama, documentary, etc – or is everything lumped into the same contest?

Amazon: At this time the awards include all categories of scripts and test movies but we are always open to suggestions regarding the awards process. Thanks for the idea!
Grant: Does the work submitted have to be something unique? Or can it have been published elsewhere before?

Amazon: Yes, Amazon Studios will accept work that has been in other festivals and contests as long as you still retain 100% of the rights in your work. We can’t speak to anyone else’s contest rules, but from our point of view you can enter your original work into other festivals or contests after you upload it at Amazon Studios so long as you do not give up any rights in doing so.

Grant: In your Content Guidelines is Amazon’s “Process for Determining Best Movie,” you have 3 categories for measurement: 1) Audience feedback, 2) Analyst review, and 3) A judging panel. Can you elaborate on each of these?

Amazon: Winning screenplays and full-length test movies will be selected on the basis of commercial viability, which will include consideration of premise, story, character, dialogue, emotion and other elements of great movies. [For judging], the first Amazon Studios industry panelists will include: screenwriter and chair, Writing Division of the USC School of Cinematic Arts, Jack Epps, Jr. (“Top Gun,” “Dick Tracy”), producer Mark Gill (former president of Miramax and Warner Independent Pictures), screenwriter Mike Werb (“Lara Croft: Tomb Raider,” “Curious George,” “Face/Off,” “The Mask”) and producer and chair, Production Division of the USC School of Cinematic Arts, Michael Taylor (“Bottle Rocket,” “The Pursuit of D.B. Cooper”).
[Grant’s note: On “audience feedback,” I had inquired what exactly where the metrics for measurement. And for the actual “Analyst review,” which I presumed took place before receiving the actual panel of judges, I had asked if the analysts were either in-house with Amazon or an outside party. Since I had only received a response about the list of judges, which are already made public on the Amazon Studios website, I’m left to assume that the first-tier of vetters are in-house Amazon staff. As for “audience feedback,” if I had to guess for myself what that would be, I would assume for Scripts it’s the number of downloads and quantity-quality combo of reviews; and for Movies, it’s the number of plays and the quantity-quality combo of reviews as well.]

Grant: Will there be any consideration for future contests to include not just feature-film pieces, but web-centric videos and scripts? (For example, business-targeted videos and academic videos, which can have a different type of evaluation process and criteria?)
Amazon: It is the goal of Amazon Studios to produce new, full-budget theatrical films based on the best projects and it will give Warner Bros. Pictures first access to the projects Amazon Studios wishes to produce in cooperation with an outside studio. Amazon Studios test movie process is intended to guide a film’s development and assess its potential for major movie success.

Why Amazon Studios?

Well, besides the fact that Warner Brothers has money? Here’s a text excerpt I pulled from their video on their home page as part of their goodwill PR pitch:
“Great movies are made every year. But it’s hard for new voices to break in; and it’s hard to pick the right movies to make…. If we were going to design a movie studio for today’s world, where we have computers, and communicate; and with so many people making movies, how would we do that? The movie studio of the future could be more open, and more collaborative. Anyone could upload a script or movie to add a project. They could get reactions from a global community while they still have time to change things, before their script has been accepted or rejected by anyone. Filmmakers could offer revisions and advice to each other, and bring something serendipitous that could take it to the next level.”

How Amazon Studios Works

Picture “American Idol” meets “Dancing with the Stars” meets crowd-sourced movie making meets big-studio corporate oversight. Basically, Amazon Studios serves as the platform and audience attraction for filmmakers and scriptwriters to submit their content for audience voting and feedback; with Warner Brothers’ providing the funding and corporate oversight, towards getting a first-look deal at all content for the purpose of being considered for feature-length movies.

Here are some excerpts from their press release that outlines the program and business incentives:

“Through the monthly and annual Amazon Studios Awards, Amazon Studios will offer a total of $2.7 million to the top submissions received by Dec. 31, 2011, and will seek to develop the top Amazon Studio projects as commercial feature films under its first-look deal with Warner Bros. Pictures.

“Writers are invited to add scripts to Amazon Studios. Filmmakers are invited to add full-length test movies to Amazon Studios. Test movies may be made from your own original script or from any script submitted to Amazon Studios. Test movies must be full length (more than 70 minutes), but they don’t have to be “full budget.”

Benefits of Amazon.com’s Virtual Studio Business Model

Easy entry – Amazon.com explains in their press release: “While test movies must include imaginative stories with great acting and sound they don’t need to have theatrical-quality production values. Film fans can review Amazon Studios scripts and test movies, or even upload alternate, revised versions.”

Immediate audience feedback: Amazon.com says that “Full-length test movies will introduce public test screenings to the earliest, formative stages of the movie development process; the Amazon Studios test movie process is intended to guide a film’s development and assess its potential.”
Money – I like money. So do a lot of professional filmmakers and scriptwriters who now have an extra avenue for submitting their work and building buzz around it, which catches the attention of Amazon Studio’s “Analysts” and judges.

Amazon Studios’ Difference: Corporate Interests Over Populism
I should also be clear that unlike popular entertainment reality show contests on television, the winners in the Amazon Studios contest are all ultimately decided on by the esteemed judges, and not by audience votes. (Also, it’s likely that all pieces first have to be vetted by their own “analysts,” which I go more into in my interview with Amazon Studios.)

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MoFilm crowdsources the pros

MoFilm is upping its game. The crowdsourcing outfit has launched MoFilmpro to help brands make high-end video more quickly. While MoFilm has been tapping its general community for creative input for some while, it’s now decided the time is right to get brand working directly with some of our most talented aspring filmmakers – ie it’s crowdsourcing those who have been previous competition winners, and runners up who have produced consistently high quality work across multiple brands and contests.
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Tuesday, November 23, 2010

Crowdsourcing and open source: knowledge is a gift

Never before has so much information been given away by so many – from software and videos, to their own PCs, says Roger Highfield.

By Roger Highfield 9:50AM GMT 23 Nov 2010
It might not feel like it, but we are living in a golden age for generosity. That, at least, was the contention of the musician Brian Eno, when I heard him speak this month at the École Polytechnique Fédérale de Lausanne.
The occasion was the annual presentation of the Rolex Awards for philanthropy, given this year to remarkable individuals under 30 who are dedicated to improving life on the planet. Yet when Eno talked about an "age of generosity", he was not just referring to such traditional forms of do-gooding. He also meant the extraordinary generosity we show when it comes to the dissemination of knowledge – part of a remarkable trend made possible by the internet and the rise of "crowdsourcing".
Knowledge was once closely guarded, on the principle that "scientia potentia est" – "knowledge is power". Yet as Eno pointed out, giving your knowledge away is one of the best things you can do to enhance your reputation. He described how Salman Khan, an alumnus of MIT and Harvard Business School, discovered that he had an aptitude for explaining arcane subjects after a cousin in Dubai asked for his help. Since he gave up his job, his not-for-profit Khan Academy has produced hundreds of online videos for students worldwide, including Eno.

Khan is one example of a trend that includes the open source movement, which has given the world free software such as Linux, and open innovation, where many people from different disciplines can tackle the same problem simultaneously through a site called Innocentive. Indeed, as the scientific community is discovering, there is an army of amateurs out there, willing to donate their time and knowledge.
There's nothing new in this, of course. Enthusiastic amateurs have recorded birds, tagged butterflies, measured sunlight, spotted new supernovae, counted sunspots. photographed meteor trails, discovered comets, invented instruments and much more. But what is breathtaking is the scale of what is now possible. Simply by donating their PCs' spare capacity, users can join an armada of home computers, which expert software welds together into a virtual machine that can easily outperform a supercomputer.
This "distributed computing" is especially helpful when it comes to trawling through the tidal wave of data generated by modern science. The trend took off with the launch of SETI@home in 1999, which runs a free program that downloads and analyses data from a radio telescope in Puerto Rico, searching for evidence of alien signals.
Many more projects have followed to classify galaxies, study the Moon and Sun, evaluate protein structures and more. Even The Daily Telegraph joined in: five years ago, we explored a vast range of climate-change scenarios using a site called ClimatePrediction (www.climateprediction.net) This enabled tens of thousands of PC users around the world to download a special screensaver that ran a Met Office computer model. The verdict of the experiment, based on 100,000 participants and published in the journal Nature, suggested that a doubling of greenhouse gas levels from their pre-industrial state could cause more than double the maximum temperature rise that the Inter-Governmental Panel on Climate Change then considered likely.
ClimatePrediction is still going, although it now focuses more on weather than climate – and elsewhere, too, the march of citizen science continues apace. Last month saw the launch of OldWeather (www.oldweather.org), which aims to record the weather information in handwritten Royal Navy logbooks from the First World War, to help build a more accurate picture of how our climate has changed over the last century.
And sitting before Eno in Lausanne was an award winner, Jacob Colker. He helped set up The Extraordinaries, a two-year-old social enterprise based in San Francisco. It has created a website, www.sparked.com, through which volunteers can offer their professional skills to help good causes they care about, from designing a logo to advising on the best place to sink a water well in Kenya. So far, more than 100,000 people have got involved, in a phenomenon Colker calls "micro-volunteering". How's that for an age of generosity?
Roger Highfield is the Editor of 'New Scientist'
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Sunday, November 21, 2010

Yahoo asks users to submit content

Looks beyond its walls for improvement
By Lawrence Latif
WEB PORTAL OUTFIT Yahoo is inviting all and sundry to contribute content that will appear on a number of its web properties.
The initiative comes after Yahoo purchased Associated Content six months ago, and is being marketed as the Yahoo Contributor Network. The idea is to crowdsource content on Yahoo's News, Finance and Sports sections and even the firm's hodge-podge homepage.
Yahoo said its Contributor Network will "extend Yahoo's position as the leading provider of high-quality, personally relevant content by bringing the diverse perspectives of more than 400,000 contributors". However it won't be a complete free-for-all, as editors will still be in the mix, assigning and selecting crowdsourced contributions before they appear on Yahoo's websites.
For all its failings in the search market, Yahoo has managed to build up a diverse portfolio of web properties and some have been very successful. Websites such as the photo sharing service Flickr and the digital Chinese whispers service Yahoo Answers have fared well with user generated content and now it seems that Yahoo believes it is best to tap into the same free resource for its other high profile products.
Recently other large web outfits have been trying to get their users to contribute valuable information to help them provide personalised services. Yahoo is the first to go the whole hog and offer anyone the chance of having their content appear on what is still one of the most popular portals on the world wide web.
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Saturday, November 20, 2010

Evly.com launching first crowdsourcing social network 11-22-2010

Amy Abrahams
021 465 1527
072 111 09 33


Cape Town – South Africa, evly.com will be launching the first crowdsourcing social network
that utilizes a custom built drag and drop website builder available for free to any registered
user. Evly is an online network of crowdsourcing communities where users can create
advanced crowdsourcing websites in a few clicks to bring people together to constantly solve
new challenges.

Crowdsourcing is the method of sourcing a solution from a crowd, community or social
network as opposed to a single contractor with the understanding that the wisdom of the
crowd is greater than the wisdom of the individual. This method not only gives rise to a variety
of stimulating solutions but also powerful viral marketing potential.

Evly websites function much like the group or fan-pages on other social media websites,
however evly provides users with their own unique website and the ability to grow a network
based around their particular interest or need. In addition, evly will provide advanced
crowdsourcing and social networking features which will enable website owners to easily
manage and grow their own community.

CrowdTech, the holding company for Springleap.com, evly.com and eKomi.co.za, utilizes the
insights acquired from Springleap.com’s crowdsourcing model. Along with two years of
research in the development of evly, CrowdTech combines these learning’s in the development
of this distinctive crowdsourcing social media platform. CrowdTech recognises the need to
provide a service that will allow anyone through the medium of the Internet, the opportunity to
source solutions by harnessing collective intelligence, skills, talent or collaborative efforts
through a large network of people.

Co-Founder, Eran Eyal suggests: “The social web is no longer going to be about idle chatter on
a platform populated by reactive users: evly.com is about a world of PRO-active website
creators and community members constantly looking to solve new problems and build
solutions in an environment saturated by the right tools.”

Evly provides the tools that enable general users and large brands to achieve various
objectives: the platform allows community engagement, the ability to source answers to any
possible question, fund raising for various ventures, and the gathering of market research
through analysis of comments, feedback and voting.
CEO of CrowdTech, Eric Edelstein, proposes that the future web will be centred on goals,
objectives, purposes and challenges. “evly.com allows interaction with a purpose rather than
people just interacting for the sake of it! Companies and individuals from all across the globe
are now beginning to see that they can solve problems by tapping into a larger knowledge
base, at a fraction of the price and in a much shorter time through the Internet.”
Evly - the “network of networks”, will open up a world of hybrid crowdsourcing communities to
every evly user. Just by joining evly.com or any community built off the evly platform, users will be encouraged to explore the evly network through their own personalised dashboard. There
they will be able to search, discover and participate across the entire evly network of
crowdsourcing communities. Analysts predict the estimated growth of evly over the next 36
months will be around 35 million registered users, along with 1.5 million active websites and
4000 corporate clients.

Level 1: Starter - Individuals and companies can set up crowdsourcing websites and pose
challenges for free. All evly websites will benefit from participating through evly.com’s ‘network of networks’ in order to utilize collective knowledge.

Level 2: Customisation – Building on from Level 1, the first premium model of evly will give
the website owner more control over the design and branding of their website. Website owners
will be able to create a fully customized website in minutes.

Level 3: Independence - Will afford website owners the option to remove themselves from the
evly network. Website owners will also have 100% custom branding, as well as ownership of
all member information.
Evly.com is currently opening up 450 spots for BETA testers. If you would like to be one of the
select few to test this revolutionary platform register now at www.evly.com

CrowdTech Co-founders of Springleap.com, Eric Edelstein and Eran Eyal, have driven their t-shirt design crowdsourcing company to become the success it is today. The online design crowdsourcing
community and t-shirt store has thus far won various awards during its short lifespan, including
winning the 2009 SA e-commerce awards. The company earned second place at the
Innovation 100 awards held by The Standard.com in California in 2008. Other awards include
the Silver Trophy in the South African Online Publishing Association awards. Recently
Springleap was used as a case study for Joel Comm’s authoritative book : “Twitter Power” and
Jon Reed’s upcoming book : “Get up to Speed with Online Marketing”.
Eric Edelstein co-founded the incuBeta group, which launched the global search marketing
company clicks2customers.com, Affiliate Marketing Network trafficsynergy.com and website
builder yola.com. He is currently the CEO of CrowdTech, the holding company of
Springleap.com, evly.com and eKomi.co.za.

Eran Eyal is a technology forecaster, journalist and entrepreneur. He spearheaded launching
iiyama Benelux in South Africa and has worked closely with major technology manufacturers
internationally specializing in conceptual design solutions. He is currently the Director of
Business Development for CrowdTech and heads up Springleap.com and ekomi.co.za.
To Learn More Click Here

9 reasons to crowdfund your next idea

The biggest benefit of crowdfunding is raising the money you need to make your project or idea a reality. But what other benefits does crowdfunding provide over and above raising extra cash? Here are few reasons why crowdfunding can enhance your fundraising efforts:

1. Make use of your networks
Other methods of raising money require you to give up more than just your time and effort. Bank loans, if you can even get one, are risky and costly – often requiring collateral and interest payments. Grants are even harder to come by and involve lengthy paperwork. Begging, well, that requires you give up your dignity. And we don’t want that.

Crowdfunding, on the other hand, involves avoiding all of the above, and utilizing what you do have – friends! (We hope). Thanks to social media (i.e. Facebook, Twitter, Myspace, YouTube) and email, its easier to reach out to large groups of people than ever before. Launch your project, and then get promoting! If your video explains enough and your idea is support-worthy, you’ll start to see the donations rolling in.

And that leads us on to our next point…

2. Free marketing
Every person who donates acts as an evangelist for your Project. Tweets, Retweets, Facebook posts, and Facebook “likes”, amongst others, are a quick and easy way your supporters can share your project with others across the web. Expect to receive some word-of-mouth promotion from your supports as well. Often, people feel good about their good deed and enjoy sharing it with others. Rewards are another way to earn some attention. Recently, I donated to a project and got a one-off, super cool t-shirt. I’ve never been so tickled about a simple t-shirt. Now every time I wear it, I’m telling everybody I can about the Project I supported and the great experience I had.

3. Free press
If having a platoon of volunteer evangelists wasn’t enough, running a project on a crowdfunding site opens you up to many opportunities for free press. Running a highly successful crowdfunding project is reason alone to receive unsolicited press from third parties – bloggers, online newspapers, radio stations, even television.

4. Idea validation
People like to support good projects. Every donation acts as a vote for your idea. If you launch a Project to raise money for your first solo singing album and you only get a couple of $1 donations, maybe its time to focus more on your guitar playing skills, if you know what I mean. And that leads us onto our next point…

5. Feedback
Crowdfunding is the ideal chance to get feedback from a pool of people who actually care about what you’re doing. Via the blog on your Project page, you can keep your supports informed of your project progress, maybe post some photos of your latest prototype, include links to your latest demos, or whatever it may be. Conclude by asking for feedback from your followers and look in the comments below for the skinny on the general consensus.

6. Monetization
Rewards provide many additional ways to monetize your Project. If you are a musician, offer a free backyard concert. If you’re making a film, offer props from your set or the chance to be in the film itself. In fact, crowdfunding can be positioned as a one-time chance to participate with rewards serving as proof that the supporter was part of an exclusive movement.

7. “Seed funding”
Crowdfunding is often the means to an end, rather than the end itself. Filmmaking, for example, is infamous for requiring a huge initial investment. Even then, you don’t know whether it will be a hit at the box office or not. Crowdfunding enables you to validate your idea and raise the initial funds to pursue it. For a musician, that may be money to fund studio time. Then you can pitch to the labels for a record deal. For a theater group, it may be funds to bring the show to different cities. Then you can make money from ticket sales. Whatever it may be, its a great way to get the funds necessary for that first push towards your dreams.

8. Complete control
Raising money from your friends and fans is a way to avoid the hassle and expense of taking on investors. This is not only true of those with business ideas, but also musicians and filmmakers. By the time all your stakeholders have been paid off, you may find that there’s little left for yourself. Crowdfunding puts the control back into your hands.

9. Crowdfunding street cred
Once you’ve run a successful crowfunding project, the doors are opened for further fundraising projects. Others will see the number of believers it took to achieve that success and naturally have confidence that your next idea will likely be good too. Just don’t expect to run a repeat project. Its about leveraging your earned credibility for your next great idea.
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Thursday, November 18, 2010

Harley-Davidson seeking ideas through "crowd sourcing"

Let's Ride
The Journal Sentinel's Rick Barrett is the proprietor of this online hangout for Harley enthusiasts and anyone else interested in the motorcycle industry and culture.

Harley-Davidson seeking ideas through "crowd sourcing"
By Rick Barrett of the Journal Sentinel

Nov. 18, 2010 8:53 a.m. |(3) COMMENTS

Harley-Davidson Inc. says it's seeking branding ideas from its motorcycle enthusiasts, launching a campaign through a new advertising agency.

Harley recently split with ad agency Carmichael Lynch after a 31-year relationship. The split marked an official end to the typical ‘one-size-fits-all’ agency of record for the company, said Mark-Hans Richer, Harley's chief marketing officer.

“We’ve always listened to our customers,” Richer said. "It only makes sense for us to tap into their passion, as well as the ideas they openly share with us, to bolster our brand rather than keeping our creativity bottled in the creative department of an agency of record."

The new plan starts with ad agency Victors & Spoils, based on the principles of crowdsourcing. It will draw on the ideas of thousands of Harley enthusiasts to help guide brand creativity.

Victors & Spoils has already started the process through a brief called "The Squirrel Fight."(https://victorsandspoils.com/squirrelfight).

Approximately 2,000 people received the brief and 650 ideas were submitted by 160 Squirrel Fight participants – the largest outpouring of creativity Victors & Spoils has ever received for any project.
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