 | It’s more and more common to see spin-off products of large corporations conducting crowdfunding campaigns on existing platforms with varying degrees of success. Some ask the question, why large companies do not finance their own innovations, but rather prefer using crowdfunding instead? |
Crowdfunding has proven to be a powerful marketing and co-creation tool because not only does it help verify a demand for a product or service, but also fundraising companies can receive feedback from investors and contributors on how to improve their offering to better fit the needs of the market, which they represent.
Large innovative companies seem to have understood and launched a handful of crowdfunding campaigns to test the demand of new products. Sony and IBM found the exercise to be so powerful that they even opened their own crowdfunding portals. Sony’s platform is limited to the Japanese public for the moment, while in the latter platform is accessible only by IBM employees (which number about 400,000).
By crowdfunding their innovations, companies test the market ahead of time at almost zero cost, and reduce the risks associated with the decision of moving forward with full production with minimal market feedback.
Some people believe that large corporations should not use crowdfunding as the tool that was born to provide an alternative finance source to those projects and companies that have hard time raising capital from traditional financial sources. If large companies start using it more frequently, their ideas may take away “the crowd” from other smaller projects. But since crowdfunding is a democratic finance instrument there is no reason why also large corporation could not use it. Certainly it would be good to see also some of them on the other side: playing the investor and doing some corporate venturing through crowdinvesting.
Large innovative companies seem to have understood and launched a handful of crowdfunding campaigns to test the demand of new products. Sony and IBM found the exercise to be so powerful that they even opened their own crowdfunding portals. Sony’s platform is limited to the Japanese public for the moment, while in the latter platform is accessible only by IBM employees (which number about 400,000).
By crowdfunding their innovations, companies test the market ahead of time at almost zero cost, and reduce the risks associated with the decision of moving forward with full production with minimal market feedback.
Some people believe that large corporations should not use crowdfunding as the tool that was born to provide an alternative finance source to those projects and companies that have hard time raising capital from traditional financial sources. If large companies start using it more frequently, their ideas may take away “the crowd” from other smaller projects. But since crowdfunding is a democratic finance instrument there is no reason why also large corporation could not use it. Certainly it would be good to see also some of them on the other side: playing the investor and doing some corporate venturing through crowdinvesting.
 | About the author - Irene Tordera Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives. During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem. |
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