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Modern technology has changed many of the basic interactions that were commonplace even up to ten years ago. Communication, travel, healthcare, publishing, mobile casinos, and banking have all become radically changed thanks to the advancement of technologies that can now be found everywhere. Even editorials, like the one you truly are currently writing, use the power of thousands of different inventions to be written and published so that you can read them from anywhere on the planet.
Why would financing or economics be any different? With the power of crowdfunding, projects that, before, only massive industry giants like Hollywood or politicians were capable of pulling off are now feasible by anyone with a nose for P.R. crowdfunding might now even become the defacto method for funding large projects in the near future.
How does Crowd Funding Work?
The idea itself is extremely simple. You propose an idea and then beg everyone and their grandmother for some money to get that idea off the ground. It's investment by the lowest common denominator.
In the past, if you wanted to get a company or a project funded, you would have to go to a bank or some investors, who would each back X thousands of dollars and expect to receive ten times X in future earnings from that investment. For a corporation, this could also come with seats on the board, a title, and a stake of ownership in the company too.
crowdfunding is more for (but not necessarily) specific projects rather than something more nebulous like a company. You invest in the project, and in return, you (typically) receive special perks for believing in the project, like a credit or bonus content or whatever.
The most common way to organize such a crowdfunding is through a website, like fundly, Kickstarter, or GiveSendGo. However, I think what really got people to believe that crowd funding was a viable funding method were YouTubers.
Crowd Funded Entertainment
YouTube is the single most popular website in the world (aside from Google- and that shouldn't count, dagnabbit) and beats out Facebook’s monthly traffic by nearly ten billion users. What led to its immense success was the encouragement of content creation through the Creators program- a program that lets users earn money off of the advertisements displayed over their videos.
With enough views, people realized that they could actually earn a living off of this. Ironically, though, it wasn't this monetization system that made the idea of crowdfunding a success: Its failure was.
YouTube, for the longest time, has been notoriously awful at supporting its own userbase. In fact, it doesn't even seem to have a clue half the time about the reason that YouTube is so popular at all.
It is constantly messing with the algorithm to push "authoritative" content (Light Night T.V., CNN, Fox News), suppress what it deems to be "borderline" content (anything that's completely legal, but YouTube doesn't like. Typically things that don't conform to "Hate speech" laws), and arbitrarily screw with all of the non-political entertainers who made the platform what it is today.
As YouTube becomes a less reliable means of income, these creators have sought other means of income, like sponsors, but more relevantly: Patreon and SubscribeStar. Voila! Crowdfunded entertainment, where good producers of content thrive and bad ones fail, and nobody has to pay for content they don't want (coughNetflixcough).
The Sanderson Kickstarter Project
So with the success of YouTubers, and the various crowdfunding platforms proving their viability over time, no crowdfunding campaign was ever as successful as the recent Year of Sanderson Kickstarter Campaign. In fact, it was so successful that it's now Kickstarter's number 1 campaign ever.
For those who don't know, Brandon Sanderson is a bestselling sci-fi and fantasy author, one of the most popular in the world at the moment, and beaten out only by a handful of industry giants like Neil Gaimon and J.K. Rowling. His best-known work is his series of novels set within the "Cosmere", a fictional interconnected universe of fantasy novels that includes "Mistborn", "The Stormlight Archive", "Elantris", "Warbreaker", and more.
Now, just to give you an idea of how prolific an author Brandon Sanderson is, his idea of a vacation is to write. He takes breaks from writing by writing other things. It's how he churns out novel after novel at a rate only cocaine addicted Steven King could keep up with.
During the lockdowns, events and tours were canceled due to restrictions, and for Brandon Sanderson… this meant more time for writing! Yayyy! In those two years, Brandon Sanderson wrote five separate novels secretly, in addition to the stuff he was already working on publically.
The Year of Sanderson Campaign was to see if he could self-publish four out of the five through means outside of the traditional publishing method (I.E., A new york publishing company). It was a blow-out success that proved, yes, crowdfunding is viable, profitable, and supremely efficient.
Now, the fact of the matter is that most people cannot pull off what Brandon Sanderson did. In fact, most authors couldn't, aside from a select handful. Even outside of publishing, crowdfunding has its flaws. For one thing, people willing to throw money at you are not going to just bubble out of the ether at your demand.
Brandon Sanderson's campaign only worked because he has spent decades building up an audience and proving the quality of his work. However, even with this success, he has admitted that traditional publishing houses are not going anywhere. Traditional publishing has its advantages (less work for the author and a known audience looking for novels in the author's genre).
The bottom line is: The tried and true methods are tried and true for a reason. There are advantages to dealing with people and companies that specialize in these things. However, the advantage of crowdfunding is that you don’t HAVE to. It’s now become AN option, among several, for whatever industry you work in. Game development, writing, earbuds, etc.
What I really find exciting is that being dependent on a massive studio or a set of risk-averse investors is no longer a requirement for success. If you can get enough people to believe in you, you can succeed. A meritocratic means of success on an individual basis.
In short: The American Dream.
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