Crowdfunding & Crowdsourcing

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Vyom Shah recently spoke on Crowdfunding & Crowdsourcing at Vidarbha Management Association (VMA)

Businesses often rely on Debts (Bank Loans, Bonds etc.) or Equity (Share divestment, IPO etc.) for financing. However, a new alternative means of financing has emerged - Crowdfunding that does away with all the challenges and negativities of Debts and Equity. Crowdfunding has gained traction globally and in India too, and is increasingly been used by many orgnaizations. Several platforms have emerged to support this medium. Besides, similar to crowdfunding, companies have even started to get ideas and work delivered from public, through Crowdsourcing.

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Crowdfunding & Crowdsourcing

  1. 1. Crowdfunding & Crowdsourcing www.phronesisstrategies.com
  2. 2. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved www.phronesisstrategies.com 2 June 2014 PHRONESIS STRATEGIES 103, Ghatate Chambers Panchsheel Square, Nagpur – 440012 INDIA T: +91 712 2454809 E: contact@phronesisstrategies.com DISCLAIMER   This publication contains general information only and is based on the experiences and research of PHRONESIS STRATEGIES consultants. PHRONESIS STRATEGIES is not, by means of this publication, rendering business, financial, investment or other professional advice or services. This publication is not a substitute of such professional advice and services and the user of this publication should consult a PHRONESIS STRATEGIES consultant before making any decision. The user of this publication is solely responsible for outcome of any decisions based on information contained herein. PHRONESIS STRATEGIES, its owners, consultants or its associates make no representations or warranties regarding accuracy and completeness of such information and expressly disclaims any liabilities based on such information or on omissions therefrom. The user of this publication specifically agrees and acknowledges that all proprietary rights in the information available on this publication for all times shall remain the property of PHRONESIS STRATEGIES. Reproduction, redistribution and transmission of any information obtained from this publication, in any form, is strictly prohibited.   This presentation was delivered on 1st June 2014 at Vidarbha Management Association (VMA) and is intended for Internal Circulation only
  3. 3. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved www.phronesisstrategies.com USD 5.1 Bn 3 Appx. Amount raised through Crowdfunding in 2013 (Source: http://www.crowdsourcing.org/editorial/crowdfunding-industry-trends-and-statistics-infographic/25662)
  4. 4. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved www.phronesisstrategies.com 4 Crowdfunding
  5. 5. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 5 Types of Crowdfunding: Ø  Reward based (43%) Ø  Donations based (29%) Ø  Equity based Ø  Lending based (Source: http://www.crowdsourcing.org/editorial/crowdfunding-industry-trends-and-statistics-infographic/25662) www.phronesisstrategies.com
  6. 6. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 6 Pebble Watch §  Category: Technology §  Target: $ 100,000 E-Paper Watch for iPhone & Android Funding Received: $ 10,266,845 (Source: Kickstarter) www.phronesisstrategies.com
  7. 7. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 7 OUYA §  Category: Gaming §  Target: $ 950,000 A new kind of video game console Funding Received: $ 8,596,474 (Source: Kickstarter) www.phronesisstrategies.com
  8. 8. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 8 The Grand Theft Orchestra §  Category: Music §  Target: $ 100,000 Amanda Palmer Funding Received: $ 1,192,793 (Source: Kickstarter) www.phronesisstrategies.com
  9. 9. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 9 But that seems to be a global phenomenon.. What about India? www.phronesisstrategies.com
  10. 10. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 10 Fin §  Category: Technology §  By: Kochi based Startup Wearable Bluetooth Ring; Allows to control up to 3 devices at a time remotely Funding Received: $ 200,000 (Source: Sachitanand, R. (2014) “Not yet a madding crowd”, The Economic Times - Sunday Magazine) Other benefits: 300 distributors, 40+ investors & at least dozen manufacturers interested www.phronesisstrategies.com
  11. 11. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 11 Gecko §  Category: Technology §  By: Bangalore based Startup §  Target: $ 50,000 Bluetooth tracking tool; Allows to track keys, wallet, children, pets, medicines etc., play music remotely or act as camera trigger Funding Received: $ 135,410 (Source: Sachitanand, R. (2014) “Not yet a madding crowd”, The Economic Times - Sunday Magazine) Other benefits: §  Flooded with 7,500 pre-orders §  Got interest of Apple co- founder Steve Wozniak www.phronesisstrategies.com
  12. 12. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 12 Lucia §  Category: Films §  By: Director Pawan Kumar Kannada movie Funding Received: INR 71 Lakhs from 600+ backers (Source: Sachitanand, R. (2014) “Not yet a madding crowd”, The Economic Times - Sunday Magazine) §  Was a Hit §  Later sold rights to Udaya TV for INR 1 Cr www.phronesisstrategies.com
  13. 13. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 13 Sochi Winter Olympics (Source: http://articles.economictimes.indiatimes.com/2014-04-21/news/49290737_1_yuki-bhambri-vikas-gowda-lakh) §  Category: Sports (Luge) §  By: Shiva Keshavan (India’s first representative to compete in the ‘Luge’ sport at the Sochi Winter Olympics) Funding Received: INR 10 Lakhs www.phronesisstrategies.com
  14. 14. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 14www.phronesisstrategies.com
  15. 15. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 15 The Platforms Global & 500+ more Indian & several others www.phronesisstrategies.com
  16. 16. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 16 The Rewards What Backers look for: §  What it is you are trying to do  §  How you will do it §  How the funds will be used §  Your qualifications to complete this project §  The identities of the people on your team (if you have one) §  How far along your project is The more information you share, the more you will earn your backers’ trust. Creating a Video raises the chances of funding success (Source: Kickstarter) Can be anything, all on your imagination. Some examples of rewards: §  First chance to pre-order §  Discount/ Free products §  Copy of CD, Limited edition of comic, §  Print from the show, Visit to the set §  Naming a product/ component after the backer §  Personal phone call §  Autographed Photos §  Any experience engaging the backer more with the product etc. www.phronesisstrategies.com People back projects that are exciting, creative, disruptive innovations or carries the potential to change the industry or society, and NOT projects that may be financially attractive but have little impact on the world
  17. 17. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 17 What is Crowdsourcing then? www.phronesisstrategies.com
  18. 18. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 18 Creater: D. Udaya Kumar – Associate Professor, IIT Guwahati www.phronesisstrategies.com
  19. 19. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 19www.phronesisstrategies.com
  20. 20. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 20 Has received over 6 million submissions over 70 years www.phronesisstrategies.com
  21. 21. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 21 Brainstorming session @ VMA www.phronesisstrategies.com
  22. 22. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 22 Crowdtesting – Testing of Mobile Apps Platforms: §  Passbrains (7,500 testers, adding 300-500 testers every month) §  99tests.com etc. Why? §  Much less time §  Around 50% cheaper Who’s using it? §  Mindtree §  Flipkart §  Ibibo §  Cleartrip §  Foodpanda §  Babyoye etc. www.phronesisstrategies.com
  23. 23. Copyright © 2014 PHRONESIS STRATEGIES. All Rights Reserved 23 “My firm belief is that for 95% of Indians, even Rs. 51,000 is good enough to achieve a dream and asking for Rs. 51 as contribution from 1,000 people to start and do something new is easier than making business proposals and definitely better than killing their ideas due to lack of money” - Ateet Bajaj – Founder, Start51.com Thank You!! VYOM SHAH   M: +91-9158852515   E: vyom.shah@phronesisstrategies.com   www.phronesisstrategies.com http://www.facebook.com/PhronesisStrategies http://www.linkedin.com/company/phronesis-strategies

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