... with a Purpose
HOLY CRAP

Haven’t gotten a chance to post a descent post in a while. I did feel compeled to say that the reasom I’m up at this hour is because I had to watch the “Double Fine Adventure” Kickstarter campaign get to the finish line, tripling itself since I posted about Kickstarter on this blog.

As I mentioned in the title: HOLY CRAP!

http://www.ustream.tv/channel/double-fine-adventure

http://www.kickstarter.com/projects/66710809/double-fine-adventure

Kickstarter: a Case Study

Once again, I’m taking too long between posts because of my work. Add to that internet shortages (ironically enough – a topic I’m currently reading about in a book about networks), computer reboots and document recovery failures, and you get a week’s delay. Let’s hope this one will be interesting enough to be worth the wait :).

I opened this blog right after I made the conscious decision to invest time in learning about startups to inspire my own future goal – which is, in its full abstraction, to create projects that will allow people’s offhand actions in their daily lives to serve a secondary purpose. Practically, this means:

  1. Create a project that will be used by many people (the crowd).
  2. Create, through the crowd’s work as a mass of humans, a secondary product that cannot be matched by machines of programs.

Specifically, my focus was to think of products that will be free, or even reward their crowd, being funded instead by people (the funders) who will pay for the secondary product produced by the crowd’s work, via the primary product. In short – join the crowdsourcing craze I keep posting about! Once I understood how many crowdsourcing projects already existed, I figured that in order to support my goal, I should look into projects of this kind that appeal to me and study them - not in order to mimic them, but rather to learn how to build a product that will be useful enough to gather a crowd and financers, while staying free and profitable.

Before opening this blog, I wrote down my analysis in Word documents. Now that I have this blog, whose purpose for me is to support my reading by giving me a place to express the things I’ve learnt, I can think of no better place to share my analysis directly, rather than focus solely on general discussions. It’s my great pleasure to start this trend by analyzing Kickstarter - a social funding site for well-defined projects.

First, a little background:

Kickstarter is a website that allows users to post projects and offer rewards as incentives to raise funds. In effect, it’s a platform that allow people to fund their projects using a crowd of backers rather than traditional funding methods. I’ve seen the name come up several times in blogs and sites I read, but it wasn’t until Rich Burlew, the writer of a webcomic I’ve been following for several years named ”Order of the Stick”,  began raising funds for reprinting his books that I’ve actually used it. Since then, I’ve been hooked - helping fund several projects I liked as well as keeping up with updates on these projects.

In fact - that’s what makes this site special - since the funding is social, it is expected of the projects’ creators to be social- share updates, react to the crowd’s questions, requests, and build up support. The "Order of the Stick" pledge drive is a great example for that – over the course of the last month, Rich expanded the prizes he offered to keep the pledge going, shared interesting updates, answered questions, addressed requests and even made creative charts describing the pledge’s progress and following their own weird plot as the pledge goes on.

As I began wandering through kickstarter.com itself, I found myself drawn to more projects, pledging, commenting and following them as well, despite having never heard of their creators prior. While admittedly I could be a fool for doing so, I won’t be the only one – these projects are funded by thousands of individuals interested in the products, the creators, and/or the rewards, and while not all projects get funded (the site’s statistics say that under 50% do), the projects that end up successful raise anywhere between a few hundred to over one million (!) dollars. Finally, if for some reason the project you opted to fund is one of the 50+%, you lose nothing – it’s all or nothing, so if the goal wasn’t reached in the project’s time limit, no one has to pay anything.

So what makes Kickstarter work? To frame this large question, I looked at the following smaller questions, in hopes that they can help my current analysis as well as support my analysis of other projects as well.

1. What is the primary (for the crowd) service provided?

By my own definition, the primary service is the service provided for free. In Kickstarter’s the free service is the site’s crowdfunding platform. Assume your project fits the site’s criteria, you can use the site to create a project page, with your own content, that will support your attempt to generate funding for your project by garnering interest and providing rewards for your funders. The site itself will host your crowdfunding project and publish projects it’s editors like and support. In fact, some of the Kickstarter’s employees are backers themselves – supporting projects they like financially.

2. Who are the project’s crowd?

Anyone with an idea for a concrete project that needs backing can use this site, as long as they meet certain criteria themselves, meant to assure the identity of the person getting the money from the crowdfunding project. This does limit the people who are able to post projects, but being a free platform, and one open to US citizens (quite a big crowd, after all), it creates enough content to generate interest.

3. What is the secondary (for the funders) service provided?

The beauty of this site is that there is no single secondary service. Every project is its own service – due to its creative nature or the rewards it offers. Some people will back a project to support a comic book artist or an independent company they like, others to buy a cool product, while others yet, to try out new board or card games. Each person and project create different service combinations, which is what gets people (or at least, got me) hooked to the site.

4. Who are the project’s funders?

Unlike most crowdsourcing projects, the funders are smaller than the crowd of users using the site for free. Anyone pledging money for a successful project also funds Kickstarter itself, which earns 5% of each successful project’s earnings.

5. How does the project gather it’s crowd?

Beyond what I’ve discussed above when describing the project itself, I see a few more points that help lure projects in:

  1. Mistakes are allowed – thanks to the all or nothing approach, if a project is not fully funded, no money transfers hands.
  2. Publicity – the site has gathered some major publicity on the web and regular media, inspiring more projects to post on the site.
  3. Project blog – the site itself has a blog, highlighting success stories, encouraging more people to join.
  4. Ease of use – the site’s interface is clear, and extensive support is provided before joining, making it an easy task.

6. How does the project gather its funders?

Beyond what’s already been discussed:

  1. Tangible rewards – people know what they’re getting for their money up front. If a project isn’t fully funded – no money changes hands.
  2. Content is value – each project generates a project page and updates, even after funding has ended, making it more engaging for people to join and contribute to.
  3. Social response – projects evolve and react to their funders, allowing them to affect the project itself, get more rewards, and involving them more to the extent of increasing their initial contribution (and I’m speaking from experience here).

7. What are the main challenges for this project and how does it address them?

User identity:

User identity is an issue for both the project administrators and backers. The project administrators need to make sure that they get the money they need for their projects and rewards from real people, while the backers of the projects want to make sure they’re backing a real person and a real project, so that they get what they’ve payed for. Identity is the only way to ensure accountability for the money involved in these projects, and considering the scam stories that occur on the internet when accountability is limited, this is a very big issue issue.

Kickstarter addresses this in several ways:

  • Users are forced to use Amazon payement, which is linked to a credit card and must be confirmed for business users.
  • Project creation is limited to US citizens with a social security number and driver’s license – providing real identity to the project administrators.
  • Users are encouraged to be social and link to their other sites and social networks, providing further evidence to their real identity.
  • Each project requires approval from Kickstarter.com itself before being posted, providing human confirmation.

Only time will tell if these methods are affective, but I can imagine more measures will be taken over time to ensure this remains a non-issue – as one flop can end the whole endeavor.

Limiting the crowd:

Since I don’t know how much profit the site currently makes, but assuming the goal of the site is to grow, it will need to examine how to expand into more market. Currently, it is limited in terms of technology (does not support Paypal and other financial services), geography (for projects) and in terms of its projects’ scope (which are limited both in terms of tangibility and topics). Obviously any expansion can be risky, but might become necessary with the site’s growth, or if members want to increase to profits, not to mention if competition arises.

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I find this site both enjoyable to browse and exciting to follow, being a platform for amazing projects that might have never existed or been available to me without it. I can only hope to produce a project that is equally successful and enjoyable myself in the future!

Please share your thoughts on my analysis. Also, make sure you check out the projects I mentioned in the post – all of which I’m backing personally, off course.

The article I link to discusses Waze, a mobile mapping platform from Israel (respect!) that is growing into the international market these days. What makes waze special is that it bases it’s mapping data on it’s users rather than experts, making the mapping data more dynamic and up to date.

Rather than add to the praise in the article, which you can read for yourself, I want to discuss an interesting fact - waze’s self-mapping is not the feature that was used to market in Israel at first. If you read the article attentivly, you’ll see it hints to that fact as well - “Waze was born in 2006, when founder Ehud Shabtai coded an add-on for a commercial GPS system that let users map the location of speed cameras.” Rather than a self-mapping GPS service - waze was first and foremost a social GPS - allowing for users to report on traffic data and even socialize!

To me, that shows one of the most impressive facts about croudsourced services, in my book at least - the fact that these services evolve and branch out a lot more than their expert equivalents. Wikipedia is an encyclopedia, off course, but can be used, using its interlinking system, as a tool for discovering new music and movies - I used it in that fassion more than once. Facebook is a social website, with content created by users. It’s purpose originally was networking and keeping in touch with friends, but it has now become a platform for broadcasting messages, promoting social awareness, spreading revolution, and even music sharing (my father’s main use for facebook!).

To me that’s the main beauty in social / crowd technologies - the fact that they become a whole new platform for activity, which is often too hard to predict, evolving from little niche’s to full fledged features. 

My brother shared this project with me yesterday - it’s an international choir made up from thousands of videos of people singing different parts of a piece. I’ll record my part and join this “crowdsourcing choir” myself - and encourage anyone interested to join. I’m sure it’ll be great!

When I realized I wanted to expand my online presence I was concerned that the duplicate posting on several networks would serve no more than to allow people to read what I post in the manner in which pleases them. As it turns out, however, I am learning a lot from every community I join, and enjoy the small if important differences between each blogging/microblogging/social service.

What I enjoyed this time specifically was finding some nice blogs on psychology through the networking process (like the one linked here) which is an interest of mine, but also, in my opinion, an important aspect of anything we do - understanding psychology, even in it’s basics, allows you to at least recognize research that can support your work, and maybe even apply some of the research methodologies to it. I looked at the linked article from the perspective of developing crowdsourcing solutions for instance, as it is my current technology of interest. 

Any crowdsourcing project requires, from the little I’ve read and researched, four components:

  1. A needed service -  one that can’t be completed by one human or by a computer - that can be split into component tasks that are each achievable by a single human being.
  2. A method to assign the component tasks to crowdsourcers efficiently.
  3. A method to combine the component tasks (which could be planned as a new task in the project) that also ensures no errors were made. 
  4. An incentive for the crowdsourcers to do the task.

I find that each of these requirements can benefit from applying knowledge from the ranks of psychological research:

  1. To define a service well enough to be able to split it into tasks is hard. Applying some of the critical thinking needed for psychology research questions can only help. If the task is a cognitive one, understanding the building blocks of cognition is a main task of cognitive psychology.
  2. Workflows for organisations are often devised not by managers, but by professional advisors, who studied organisational psychology. This field of study could support the workflow of assigning component tasks to croudsourcers efficiently and provide tools to measure this efficiency.
  3. Once again, defining the combination process professionally can make it into a human task - another link in the chain. But even if you chose an algorithm to combine your workers’ tasks - understanding the human mind, cognition and though processes have been essential in algorithm development (a research paper written about Foldit, the protein modeling game, showed that users discovered during one year of collaboration a modeling algorithm than matched the efficiency of a professional grade algorithm developed for years).
  4. Inciting people is also something psychologists study - publicity, payment models, ranking - any method you chose to reward croudsources can only benefit from being backed by psychological research than can help you gather a crowd for the project. The article linked, for instance, could serve as a great guide for a crowdsourcing project - by developing microtasks in a way that is enjoyable, challenging, and supporting an important project (you’d have to convince them of that, off course!) would make people more inclined to contribute, even if they’re not payed for it, as it would bring them joy.

And isn’t that, after all, the greatest service to give?

Ever since I began to take an interest in crowdsourcing as a self appointed research subject, I’m just seeing ideas pop up everywhere. Today I found an article that lists at least ten examples of how ordinary people, when properly coordinated, lead to giant leaps in scientific research, due to the ability to process a huge amount of data in ways that computers aren’t able to, and perhaps never will. It is a true testament to the power of humans working together. 

Today this inherent capability of croudsourcing is apparently used to research the phenomenon itself. The article linked to this post describes an ongoing experiment run using Amazons Mecanical Turk platform, which allows any individual to either crowdsource a task or to perform others’ tasks. 

The experiment tried to simulate a newsroom process using “Turks” (the crowdsouced workers) in research and editing positions. The whole task is coordinated using a computer algorithm. However rather then try to develop this as a business, the people behind the experiment are trying to better define the potential merits and limitations of the method itself. 

I think this whole trend is facinating - I just hope that by the time I try to join it I’ll have something worthwhile to contribute :).

This slideshow lists some great ideas that are coming our way in the upcoming year. The technologies described, starting with network connections using light waves emitted by LEDs, moving on to better batteries and flexible screens (coming not a moment too late - I was hoping to see them in the iPad frankly), are truly groundbreaking.

What made this list stand out though for me was the inclusion of social cloud computing - the use of social networks to coordinate cloud processing (in a nutshell) - despite being a less “sexy” technology to list being harder to visualize (unlike the various concept videos of transparent devices or flexible screens).

I personally think that this could lead to more innovative uses of large user bases for free services - rather than use advertising, which in order to be effective tends to become a nuisance for the users, try to have their numbers contribute in alternative ways.

This is exactly the kinds of ideas I’m trying to come up with myself.

And on that note - Happy New Year (since I probably won’t have time to post again before 00:00).