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Funding Crazy Ideas

In this blog, I'm going to introduce you to the crowd funding site RocketHub and how it aims not only to tell the story of people looking to fund their dream projects, but how crowd funding can help science move forward.

"The day before something is a breakthrough, it's a crazy idea!" That's one of my Peter's Laws, and I really believe it. A lot of true breakthroughs come from very nontraditional places, from players you'd never imagine had it in them.

Do you know that the +National Institutes of Health (NIH) funds more researchers over the age of 70 than researchers under the age of 30? Michael Milken told me this at one of his recent gatherings. "Experts" really hate to risk backing a truly revolutionary idea because it's risky... If the idea fails, they have egg on their face for backing it. And if it succeeds, the area where they "used" to be an expert is now completely disrupted and they are no longer the expert! It's a perverse situation, which means large companies and government agencies typically don't take the risks that they should. Enter crowd funding and crowd-generated science.

I'm really excited about the ability of individuals and small teams to do bold things in science, ideas that at first might seem crazy until they're proved to be remarkable. Thanks to crowd funding, there's a chance for the crowd to take risks together, fund hunches and ultimately just try a lot of new directions.

The crowd funding site +RocketHub actually "started in the world of arts," before expanding its reach, CEO and co-founder +Brian Meece told me during our recent interviews in New York. "RocketHub came from my own pain points as an artist. I wanted to make an album with my friends. It cost about $7,000 to $10,000 to do that. Instead of putting money on a credit card, or tapping into the vacation fund, I turned to crowd funding. What I realized was that there are tons of artists and idea-makers and thinkers that have ideas that want to get them made, and a community that believes in them. Ultimately RocketHub was born."

"What was really great was it wasn't just artists. We found a number of scientists raising five figures on the site -- funds that allowed them to take the first step on their research," Meece said. "When grants and research money became unavailable, crowd funding stepped in. The crowd wanted to share in the excitement and impact of the science. We had an amazing range of projects."

Projects include:

# Raising money to study the DNA of ancient Romans, to get a true sense of the people from different parts of the empire who lived there and contributed to its life.

# Support Zombie Research, to study certain fish parasites that affect brain function and could have potential for understanding the human brain.

# Tweeting to outer space -- sending messages to alien life forms light years away.

RocketHub began in 2010 with five campaigns (including Meece's). Now it handles about 1,000 fundraising campaigns a month from all over the world -- over 150 nations. "Millions of dollars flow through the site on a regular basis," Meece said, "and millions of people come to the platform sharing projects and funding projects."

For anyone who wants to fund a project on RocketHub, Meece offers three pieces of key advice:

(1) Be passionate and creative. "Start with an amazing project with a person front and center who's passionate about seeing the project come to life," Meece said. And use a video -- it's important. "Just the fact that you're making stuff isn't enough: You have to cut through the clutter with emotion. We're in an emotional age. Artists know this -- they have the highest hit rate with crowd funding."

(2) Build a core network of supporters. These are people who already know you, of you, your reputation. "Crowd funding is taking social capital and translating that into real capital through this online process," Meece said. "It's trust, reputation, respect, leadership." Your community becomes evangelists for your project in an authentic manner, and "that's where the phenomenon of crowd funding gets powerful," Meece said. "Some 75 percent to 80 percent of funds come through first-degree and second-degree networks. You have to have a community to initiate that traction."

(3) Offer cool perks and rewards. "Every successful project has stuff people want," Meece said. To raise money for his band, he offered his finished CD for a contribution of $10. For $20, the CD would be signed by the band and delivered to the contributor's doorstep. For $50, the contributor's image would appear on the CD cover. Meece ended up raising $6,000, which was well over his goal. Perks help give the audience "a piece of the journey," he said. "Sell the journey and have these multiple points of impact so that folks can pick where they want to play."

The average RocketHub campaign is between $5,000 and $6,000, with most activity in the $3,000 to $35,000 range. Meece believes that crowd funding has the potential to raise millions for individual projects. "The social ritual of crowd funding will become mainstream," he said. "This is just the beginning."

But it isn't simply about money. "We don't judge projects on how much money they're raising but on the impact they're having on their communities," Meece said. "That can be massive, launching tens of thousands of products that impact local communities. We're changing the world.

"This is the difference between folks making stuff happen and not -- it's an important chasm that's being leapt with RocketHub."

In my next blog I'm going to write about OpenIDEO and how it has built a community for crowdsourcing innovative ideas and solutions. 

NOTE: As always, I would love your help in co-creating BOLD, and will happily acknowledge you as a "contributing author" for your input. Please share with me (and the community) in the comments below what you specifically found most interesting, what you disagree with and any similar stories or examples that reinforce this blog that I might use as examples in writing BOLD. Thank you!
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36 comments
 
+Peter H. Diamandis because of this post I found your laws.  Well done, and #28 validated the direction my organization has taken.  While external validation is not strictly necessary, it is nice to know that someone else thinks as we do.  Thank you for sharing.
 
What's great about these crowdfunding websites isn't just the expansion of new, innovative ideas, but also the expansion of more global-community-oriented humanitarian efforts. For example, Hurricane Sandy. 

Using the We Pay funding website, while a bit older in both use and presentation in comparison to sites like +RocketHub, the Occupy Wall Street community came together and transformed itself from a solely political group to a humanitarian outreach group as well. Through We Pay, they were able to collect, so far, over $30,000 toward relief efforts of victims in NYC due to Hurricane Sandy. And the money is still rolling in! 

https://www.wepay.com/donations/occupy-sandy-cleanup-volunteers

So thank you +Peter H. Diamandis in your efforts as well in getting these bold new ideas out in the open, whether it be via online social networks or written hardcopy books. I hope Occupy's crowdfunding efforts really gets the attention it deserves, especially through your upcoming new book. 

Could this be the dawn of a new era of technological altruism? I surely hope so! 
 
Here's a text-graphic from Facebook showing "The Problem" with the way much music is currently distributed, often without payment, versus a cup of coffee which everyone pays for:
http://www.facebook.com/photo.php?fbid=4466039642059&set=a.1658015443209.88361.1021819338&type=1&theater It's easy to see where crowdfunding gives connections between the consumers/funders and the creators and researchers that traditional methods of mass distribution can't offer. People are always willing to pay to be part of a good experience.
 
So, aside from funding crazy ideas, what precautions must be taken where the technology is necessary but disruptive to the current societal structure and fortunes of powerful people?
 
I would argue that it's already disruptive to the top-down hierarchy of wealth accumulation.

Before crowd funding people were only able to achieve wealth through their ideas - let alone achieve wealth to make their ideas a reality - if they knew the right person. Which usually meant that right person was a friend of the family, or a friend of a close friend. And this, in itself, normally meant that you were already of a wealthy family, or friends to one. 

Today, through crowd funding, this is no longer a problem. The 1% no longer dominates innovative ideals, nor dominates the means of funding said ideals. It's transformed wealth accumulation and innovation marketing closer to the bottom than ever before. 

This isn't the result of trickle down, but rather the result of the bottom taking back what the top normally acquired for themselves. 
 
+Peter H. Diamandis I have some crazy ideas, but I don't know how to find the right people and money.
1. There is this site for crowdsourcing movies ( www.wreckamovie.com ) and I have gotten at least two people interested in my sci-fi movie project. The problem: It's difficult to make the snowball to roll. I will eventually need lots of people to design and build various things and I don't have money nor knowledge to organize such things.
2. I came up with an idea about a modifiable computer keyboard some 11 years ago, but I still haven't found a way to build a working prototype. The problem: It's difficult to make the snowball to roll. I need to find people who know something about handling plastic parts and electronics. It will also cost lots of money (hundreds or thousands of dollars/euros) to produce plastic parts and electronics.
3. I have an idea about solar thermal rockets, but I haven't found right people to discuss the idea with. The problem is the same: It's difficult to make the snowball to roll. It's easy to come up with ideas, but it's difficult to go to the next level: towards the working prototype, to make the snowball to roll...

Any ideas?
 
This is a very noble effort and I applaud it. In some respects it's not unlike kickstarter or indiegogo but seems to reach out for more projects to be crowdfunded than just those having to do with entertainment or the arts. At the end of the day, though, if appears you have to speak or reach out to like-minded people who share your views and areas to be researched.

Ron Greenfield
www.aspectsofentertainment.com
Author of the forthcoming book, "Perspectives on Entertainment - Pursuing Our Passion"
 
Excellent site!

What we see today in science is amazing.

Like the great scientific geniuses of antiquity which is a real challenge and which usually increase exponentially scientific advances is bring together scientists from different disciplines to make an R&D; also when scientists become aware of what makes the Nature and apply it in their inventions that makes a significant developments.

It would be very interesting to have a fund that would help scientists to work together from different areas of knowledge.

As always thank you!!!
 
Your point about risk in innovation is well made in Clayton Christensen's' book "The Innovator's Prescription" (2009).  The crowd opens up ideas to disruptive innovators who are not entrenched in current technology, business models or networks.
 
of course all fields of innovations are great, but personally, I would like crowdfunding boosting more artistic, intellectual and humanistic goals, they need it more
 
Starting from the quote "Do you know that... "Experts" really hate to risk backing a truly revolutionary idea because it's risky... And if it succeeds, the area where they "used" to be an expert is now completely disrupted and they are no longer the expert! It's a perverse situation...", which reflects (part) of the reality: Much of innovation is incremental, and has to be to get good products / processes better; helping doing this experts excel.

The issue is what to do when this way to progress comes to its end; return-on-innovation gets low and "outsiders" are needed. These non-experts on matter "A" may well be (should be) experts on matter "Z"; transfer across boundaries (= "crazy ideas") can drive innovation then. How to gather this expertise? Crowding out to find these experts may be a means. 
 
"No great discovery was ever made without  a bold guess."Isaac Newton.Crowd funding  bold ideas  generated by the crowd and which  could have an impact on the world  is just hallucinating.What an abundant world !!!!!!!!!!   
 
I've heard that natural cures for cancer are rarely researched because it's so expensive and there's no income to be made because they can't be patented. This seems a perfect forum for pursuing this type of research.  All the possibilities of this are very exciting to me :-)
 
"We're in an emotional age"

"We don't judge projects on how much money they're raising but on the impact they're having"

Scientific impact is great, additionally some of these fascinating projects on Rockethub are an invitation to learn the science behind them. I wonder how a hybrid science discovery/education crowd funding platform would go down?

Somewhere where the public could really share the impact and process of research and discovery (on an emotional level), the funding community being there during the research… live streaming from the lab or out in the field. Combine breakthrough with learning and entertainment!

There seems to be a market for raw as it happens science and performance. See:
Open heart surgery at the Welcome Institute:
http://change.is/video/hearts-and-minds-open-heart-surgery-at-the-wellcome-institute
 
+Peter H. Diamandis Here is my proposal: Start a new X PRIZE competition. Let's call it "Affordable Supersonic X PRIZE" and it is awarded for "building and launching a scalable manned airplane which is safe, pollution-free, cheap to use (flight tickets should not be more expensive than US$1,000 per person per trip), and achieves Mach 5 speed without sonic booms."

How to fund this US$10,000,000 PRIZE? Please, use Kickstarter and/or Rockethub to raise the money for Affordable Supersonic X PRIZE. The Pebble project (Kickstarter) got more than US$10,000,000, so in this sense it should be possible.

In short: I'm proposing a crowd-funded X PRIZE competition.

What do you think?
 
+Mindey I. +Peter H. Diamandis It would be great to hear if this method is indeed realistic. We need more X PRIZEs and I would be the happiest chap in the world if we can growd-fund an X PRIZE in 2013. Together we can make this happen!
 
Peter, Happy New Year! This series on crowd-funding is revealing a great trend. Crowd-Funding and Crowd-Sourcing are very interesting concepts that allow people to contribute to make important advances in almost any area either through their own direct creative contribution or through their wallet. This could be a very important chapter of BOLD, your upcoming book to spread this old-new concept to spread and spur greater innovation across all field of human endeavor, especially the areas that are basic human needs for creating Abundance for all!  Thank you for your leadership in this global conversation. May we come with great exponentially inclined breakthroughs in 2013.
 
Excellent site! You are sharing your ideas there, and you can find supporters and financing.
 
Really fascinating stuff. I hadn't heard of RocketHub until now, and I'm glad I have!
 
+Liv Share Isn't it a shame that advancements cant be made just because there is no profit in it? I think the power of the internet and crowd-sourcing will soon change that way of thinking :)
 
Here is a comment we received via email; I've withheld the author's name per request.

Urban organic gardens. I would also like to see the seed monopoly taken away from Monsanto so farmers could use their own seed. It would be great if we could provide non-GMO produce to lower income families.
 
Following Henri Heinonen's idea, I'd like to employ the Crowd-funded technique of searching for sources of technology and funding for this research on Parkinson's disease. Here's one group's effort:

http://bit.ly/Y8V9Nl

Quotes from the Union Tribune, San Diego article:
“The ambitious goal is to relieve the movement difficulties Parkinson’s causes by replacing the brain cells the disease destroys. In theory, it would restore near-normal movement for a decade or more, and the procedure could be repeated as needed.
Research is far enough along that scientists and health care professionals in the project are talking to regulators about beginning clinical trials, perhaps as soon as next year.
The replacement brain cells are now being grown in a lab at The Scripps Research Institute. Patches of skin the diameter of a pencil eraser were removed from the patients’ arms and turned into a new kind of stem cell that acts like embryonic stem cells. Called induced pluripotent stem cells, they were discovered in 2006, a feat honored by a Nobel Prize last year.”


Actually, stem cell treatments, in general, can go very far towards helping a lot of brain injured persons, like myself, an Acquired Brain Injury (ABI) Survivor. Not only Parkinson survivors, but Traumatic Brain Injury (TBI), stroke, infections of the brain survivors, etc., etc., are all potential beneficiaries of this kind of unique stem cell treatments.
 
+Peter Diamandis, one thing I discovered recently in trying to get my own startup funded is that the traditional VC model is willing to take market risk but not technology risk. I managed to successfully convince several VCs (even after they did due diligence on my idea through an external consultant) that I had an idea that could change the world, and that it was guaranteed to work, but it amounted to fundamentally new computer science, and they weren't willing to fund it until or unless I had a working prototype, but I couldn't fund the prototype myself (it would take probably 4 guys 1-2 years to build), so I was in a chicken/egg situation.

Crowdfunding may be a solution to this problem, but I have to believe there is yet another model that we haven't yet figured out. Breakout Labs' "pay it forward" model might be a starting point (they grant up to $300k to startups, who are then expected to pay back the loan something like 3x, which then funds future projects while growing the program, possibly at an exponential rate, for just a small initial investment).
 
I have recently been giving a great deal of thought to so called 3D printing (really additive manufacturing).  It is a great concept, but misunderstood because (using the strained metaphor of a printer) people imagine there is the 3D printer and the stuff you can make with it.

Rather, using the concept of additive manufacturing (i.e. 3D printing), you can see that the real issue is what material you use to manufacture with, using your additive manufacturing machine (i.e. 3D printer).

What I am driving at is that I would like to see crowd funding of a wide range of additive manufacturing machines, because (switching metaphors) the issue isn't the products you can make with a 3D printer, the issue is the type of "toners" you can use in your 3D printer.

In other words, what ought to be crowd funded is attempts to take specific materials and utilize them in different additive manufacturing machines.  The real issue is the cost per unit of the "toner" (there I switched metaphors again), not the cost of the 3D printer.

For instance, say I want to utilize Martian dirt.  I need an additive manufacturing machine, a way to process the Martian dirt for the additive manufacturing machine, and products that can be produced using that new 3D printer and toner (again, I am switching metaphors, sorry).

In summary, start with the material you want to use, then crowd fund the machine and the product research.  Or start with the product you want to manufacture, then crowd fund the least expensive material that can used in an additive manufacturing machine.  Get my drift?  Think of the uses of Martian dirt...buildings, equipment, and even more 3D printers!  Exponential manufacturing!!!
 
The following comment was submitted by Tim Heile via email:

This is great Peter. I would like to see crowdfunded democracy.
 
The power of the medium of the internet has always been communications (information is a subset). As an enabler of crowdfunding, crowdsourcing, crowdgaming, crowdeducation, crowdanything ("crowding") - international common interest communications has made the possibilities and benefits endless.
 
As developing siblings, "crowding" will experience growing pains. In life, you either are ethical or you aren't. Hopefully excellence and the use by common interest groups co-operating internationally and communicating in any like-minded "crowd" manner for noble causes  will outweigh the mediocrity, failures and abuses which necessarily accompanies increasing access to any new technology which becomes readily available to everyone. 

warm regards to the many other Peter fans.

Rene
 
Thanks for the blog entries on crowd funding. I have an idea for an artist's off grid eco-village  I would like to start it in Sonoma county around Sebastopol  growing food and creating online art and design businesses and collaborations. I would like to  connect with other cultural creatives on this project.
 
I would love to see crowdsourcing campaigns for cities that are on the brink of bankruptcy.  I wonder what a series of RocketHub campaigns could have done for Detroit or the soon to be bankrupt San Bernardino?
 
That is a really good idea. Why wait for the government to figure it out?
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