When people ask me “What’s your dream holiday?” I usually lie to them. I say some exotic holiday destination that makes me sound normal. I don’t say space or the moon or the bottom of the sea, because I’m nervous it might make me sound like a dreamer or full of myself. Which I am (not).
But the truth is I am a lot like Richard Branson, Ashton Kutcher and James Cameron. OK, I’m not famous or rich or mega-successful, but if I was, instead of visiting the Bahamas or Thailand I’d be travelling to the bottom of the ocean or space. Now that’s a holiday.
Unfortunately, unlike Richard and his pals, I don’t quite have the money to build a spaceship or even rent one (yet). Or so I thought, until I came across GoFundMe, a crowd based fundraising site. On it people can raise money for just about anything at all, from “Accidents & Personal Crisis” to “Travel & Adventure”. Could crowdfunding be the answer to my lofty ambitions? Does this sort of crowdfunding have the potential to really take off?
Below I present to you what I see as the pros and cons of the concept. I’ve tried to be as impartial as possible. (If, after reading it, you’re in favor of the site, we can talk about how much you want to donate to my “Get Tommaso Out of This World” fund.)
Pro: The spirit of charity is alive and well
Even in today’s depressed global economy, it’s heartening to see so many people willing to donate money to complete strangers. For example, one charitable soul donated to a woman stricken with cancer, posting this on her micro site: “I know I don’t know you, but I know cancer…and I want you to kick its butt!” In a world that sometimes seems overrun by bloodthirsty dictators and soulless investment bankers, it’s nice to know that humanity isn’t going to hell in a ’78 Pinto just yet.
Con: Another avenue for fraudsters
For as long as charitable causes have existed, so too have fraudsters. GoFundMe is up front about the possibility that causes may be fake, and advises against donating to unknown people. Even so, it seems many people do donate to strangers. One hopes their money isn’t going to a charitable version of the “West African scam”.
Pro: Help draw attention to society’s failings (and maybe fix them)
The woman I mentioned earlier racked up an ER bill of $10,000 for what turned out to be an incorrect diagnosis. Other similar stories of unbelievable financial hardship abound on the site. Along with helping these people out, hopefully GoFundMe will draw attention to situations which society as a whole could remedy.
Con: A lack of personal responsibility?
Despite my intro to this blog, the “Travel & Adventure” section of the site makes me uncomfortable. I snooped around and found two pages to support my skepticism. One is for a person who hopes to travel to Italy for a theater program, and the other is for a person who wants to hike the Appalachian Trail.
As far as I could tell, these are two grown, healthy adults, with no physical or mental obstacles preventing them from supporting themselves. And while I’m glad they’ve set themselves some goals (mine are better), I’m unclear as to how their “needs” justify a donation page. Even if I was a close friend of one of these people, I would think that they might be better off just saving up for their trip like the rest of us do. To me the whole category seems out of place amongst the other categories dedicated to helping people in genuine need.
Overall, I think GoFundMe is a good thing, with the potential to change a lot of people’s lives. If you have a minute and a few spare dollars check it out. Help someone in need. Either that or send a nice, young, not-yet-famous, Italian lad into space.
Music is a powerful thing. It can make you laugh or cry, and even tear down the Berlin Wall (according to David Hasselhoff, anyway). The same song can mean different things to different people, with infectious tracks like Britney Spears’ ‘Hit Me Baby One More Time’ managing to be both the all-time most requested song on US radio as well as an instrument of torture used at Guantanamo Bay (along with ‘I Love You,’ the theme from Barney the Dinosaur, which would make me crack within seconds).
Thanks to the internet, we now have access to more music than ever before, and unless we’re trapped in a military prison, we can listen to whatever we want. iTunes lists a bewildering array of genres, from Neo-Medieval Disco to Japanoise to Pirate Metal. With so much variety on offer, and so many different types of people, is it possible to create a song that everybody will love?
A natural selection of your favorite tracks
A group of evolutionary scientists at Imperial College in London have created a crowdsourced research project which attempts to do just that. The researchers note that every time a listener chooses one song over another, they are making a creative choice, with one track being more successful than another. This process mirrors Darwinian natural selection and provides a great way to test the idea that music can evolve and adapt.
The project’s central experiment began with the creation of a piece of software called DarwinTunes, an automated music-creation system. It makes new songs from sound fragments and loops, and requires listeners to rate each song on a 5-point scale from ‘I can’t stand it!’ to ‘I love it!’ Successful loops and sounds are incorporated into the next generation of tracks, while unpopular ones are phased out, like the musical equivalent of pedigree dog breeding. A 7,000-strong crowd formed the judging panel for the initial experiments, and has so far taken the music through over 2,500 generations.
The first generation of loops was randomly generated, and barely sounded like music at all. But as the crowd selected loops which contained pleasing chords or sequences of notes, tunes began to emerge. Soon, the randomly generated sounds had become music, with popular melodies or chords surviving through the generations and cross-breeding with other successful loops.
The sound of the crowd
But what does this crowd-guided music actually sound like? At first listen, the hypnotic cascades of melodic bleeps and bloops reminded me of an early ’90s role-playing game, filling me with an irresistible urge to drink potions and rescue a princess. Though all DarwinTunes’ loops share the same palette of sounds, in order to keep the focus on melody there are a variety of distinctive tunes competing for attention. Some are sad, some cheerful, and some are downright catchy (Loop 81 in particular caught my ear, but that may be because it bears a slight resemblance to the greatest piece of video game music ever sequenced).
In the real world certain fragments of melodic DNA do seem to crop up again and again, but it’s hard to imagine legions of screaming fans queuing overnight for the chance to hear Loop 81 performed live. However, the researchers from Carnegie Mellon are not only interested in creating the perfect song. The project also provides useful data on the way individual taste and preference affects group decision making. This is a key area for future crowd research, as crowds grow larger and incorporate members from many different cultures.
More and more research is revealing the delicate balance at the heart of the “wisdom of crowds” effect: crowds thrive on diversity, but there needs to be common understanding too. By exploring our similarities, this kind of research may help us to understand and overcome our differences. Even if it doesn’t lead to the greatest song ever written, the DarwinTunes project will have a lot to tell us about what we have in common (plus, even the worst loop is bound to be better than Barney the Dinosaur, and that has to count as a victory).
Last week we discussed the new JOBS Act, which allows startups in the US to use online crowds to raise funding. We noted the huge potential this has for not just the crowdfunding industry and startups, but the investment world as a whole.
One platform that is planning to take advantage of these new laws (the UK is set to follow the US later this year) is Trillion Fund. Trillion Fund’s modest goal is to eventually raise a trillion dollars for sustainable energy projects. Just as ambitious is the fund’s goal of raising it in small increments from people looking to invest modest amounts of money.
Trillion Fund is led by a diverse group of overachievers from the investment, tech and renewable energy industries. Julia Groves is one of them. I caught up with her last week to discuss her plan to use crowdfunding to save the world (and help normal people make money from investing).
Trillion Fund is an exciting concept. Where did the idea come from?
It came about as a way to use crowdfunding to solve two problems.
The first is financial markets and the way investment works at the moment. Currently, investment opportunities for smaller investors are terrible. We want to offer these people the chance to invest directly in companies they like, and achieve a decent rate of return in doing so.
The second problem is energy generation. Almost everyone accepts that we need to find an alternative to fossil fuels fast – public support for change is enormous, especially here in Western Europe. But people think they can’t make a difference. The companies we offer to investors will all be dedicated to sustainable energy generation. People who invest with us will be helping to change the world.
If people can see where their money is going and the difference it is making, we think it has the power to change the way people invest. We want normal people to be able to get the satisfaction from investing that the super wealthy get. The equivalent of “Daddy, what did you do in the war?” for our generation might be “Mummy, what did you invest in?”
The early investors in particular will be making it possible for millions more to follow, so we have some special plans for them.
What minimum investment are you aiming for?
Eventually we want to get to $100. The more people that get involved the better. The economies of scale are particularly significant in renewable projects, but the potential benefits go beyond this, as five thousand people investing $100 will have a lot more impact than one person investing $500k.
If people have the chance to engage in meaningful, exciting projects, they might choose to invest small amounts of discretionary cash rather than wasting it on the normal consumer junk.
I hope you’re not referring to my iPhone?
No way! In fact, eventually we would like to have an app that allows investors a very convenient way to engage with us and their companies. For example I can see the output from my solar panels on an app on my Phone, (14kWhrs yesterday – and I have a small London roof!). There is something addictive about tickers and numbers going up all the time…
How will you choose which sustainable energy companies to offer?
We will choose our partners very carefully. The leadership team has a lot of experience with renewable energy projects and new ventures in general. I have spent the last two years installing solar panels on homes in the UK for example (and yes there is enough sun for it to be worthwhile! So long as the roofs face south-ish).
In the end the choice of where to invest and the level of risk is something each investor must decide for themselves. Despite our name we are not a traditional fund. Instead of choosing investments for our members, we will find the very best projects to invest in and provide the tools and information to make it as enjoyable and rewarding an experience as possible.
When should I send my check?
We are testing the platform with a couple of partners over the summer, and are working towards a public launch in the fall. The UK markets regulator is currently in the process of revising the rules relating to this space, in the same way that the SEC in the US has, so we will be working with them to ensure this new model of fund raising and engagement gets the rubber stamp. We won’t launch publicly until this process is finished. We’ll keep you posted!
So, you have a bit of spare cash you want to invest. You’re not Warren Buffet (if you are, please reply to my emails), but you’re interested in where this money goes and of course the returns that come from it. If all goes well, one day it may fund part of your retirement. That or buy an attack drone to terrorize your neighbors with.
The problem, for small investors, is finding somewhere decent to put the money.
Retail deposits are an obvious start. But after tax, inflation and fees you might as well just hide it under your mattress (uncomfortable as it might be, if your bank is Greek or Spanish it will probably still make for a better night’s sleep).
Investing directly in the stock market is unlikely to yield much greater returns – assuming you don’t lose it altogether. Managed investment funds promise the world, but seem to specialize more in hidden fees than delivering returns.
Crowdfunding a new era
As you will have guessed by now, the alternative we are coming to is crowdfunding.
Crowdfunding is a big deal: globally the 450 or so crowdfunding platforms raised $1.5bn last year. This figure that is expected to double in 2012.
So far most of this funding has been in return for rewards (like merchandise) or simply donations. Crowdfunding platforms, for the most part, have been unable to offer equity in companies by securities laws, so opportunity for ‘real’ investment has been limited.
That is, until now. Early last month, Obama signed the JOBS Act, which clears the way to offer the crowd equity in companies. The UK regulator looks set to relax laws in a similar way later this year.
Investments for the people, by the people
Already, platforms like Fundable have sprung up to take advantage of the law change, using the Kickstarter model, but offering equity as well as rewards (or at least it will, when it gets SEC approval and the SEC sets the regulatory rules for the space). This could make a huge difference for startups looking for cash (as well as exposure and a support base).
But the potential for more broadly revolutionizing the way we invest is huge. There will be teething problems and no doubt some disappointments (and money lost), but if the experience is a positive one, these law changes may seriously disrupt the current investment industry, for the benefit of small investors and companies alike.
Next week we’re talking with another new platform, the UK based Trillion Fund. Trillion Fund has the modest goal of raising a trillion dollars in order to solve the world’s energy needs. They plan to do it by making investing something profitable and engaging for normal people. I like their style. Come back next week to hear all about it.
Since we began writing this blog in late 2009, crowdsourcing had grown from a little known concept into the core of a respectable, mainstream industry (in spite of all our efforts to be rebellious and disruptive).
We had many goals for the blog when we started it. Along with making us look cool, we hoped it would chart the rise of the crowdsourcing industry. One day, we thought, we might even republish a selection of posts as a book. Something that people could read before they fall asleep at night, then use as a doorstop or paperweight. That was our dream, at least.
Today, my friends, that day has finally come. The book is called Short Stories about Tiny Tasks. In it you will find tales of industrious moles, gamified worlds and the kind of feel-good co-operation not seen since the hippie revolution of the 1960s. Each story highlights a different, surprising aspect of crowdsourcing, and reveals the incredible range of applications for collective reasoning, gamification and human computing.
To start with, we have partnered with Publification.com to make Short Stories About Tiny Tasks fully readable on every kind of mobile and desktop browser. This edition comes with some cool social features, so please feel free to share it and join the conversation. You can also download a generic ePub version. Shortly, we will also make it available from the Amazon Kindle and the iBook Store, but don’t hold your breath, as this might take a few weeks.
Finally, if you’re more of a pipe-smoking lover of the good old dead-tree format, send us an email at firstname.lastname@example.org. We are happy to post you a free paper copy.
Whatever format you choose, we hope you enjoy it!