Kickstart your own firm with help from these cool portals

Psst—got an idea for a product that you think will change the world? If you’d met me a couple of years ago, I would have introduced you to a couple of VCs or angel investors and wished you luck. Luck that you’d need to convince big investment institutions that you’re worth it. Enter Kickstarter, a modern twist on the concept of funding, one that is so alluring that it has convinced more than a million folks to pledge more than a $100 million to back ideas both big and small. The concept behind the Kickstarter’s crowd-funding model is simple. All it needs is a simple project description, accompanied by a pitch video that aims to sell your idea to the masses. You do need to specify ‘rewards’ for pledge levels on the site—what will different levels of dollar contributions mean to your investors—along with a funding goal and a timeframe for your project. Once it is vetted by the Kickstarter staff and approved, your project is live. Hit your funding goal and patrons get their reward—depending on the value of the contribution, it could range from a commemorative limited edition version of your product to a thank-you card or stickers. Miss your funding goal in the specified timeframe and no one’s card gets charged and you don’t receive any funds. If the approach seems a tad all-or-nothing, it probably is. Consider the benefits though—you avoid wasting thousands of dollars in R&D costs and in manufacturing unproven products. You can know upfront whether your concept aligns with market needs, and by combining tweaks based on feedback by public donors, you could create a much more bankable product on day one. Folks who pre-order your product provide the working capital you will need to sustain production, and above all, donors feel more emotionally invested in the end result. The real beauty about this approach is that unlike traditional funding, you continue to own the end product without diluting ownership of your organisation. Sites like Kickstarter are just one instance of the new micro-economies forming around the world today that let individuals exchange economic value sans the conventional institutions that have so far routed the flow of money. Another example is Pubslush, a social publishing platform for aspiring novelists. Authors can upload a 10-page excerpt along with a pitch. If the book garners a thousand followers or more, Pubslush will publish the book. Think about what Pubslush achieves—not only does it publish work that may have otherwise been shunned by big publishers (thereby rebooting the entire talent discovery process), it puts more revenue into the author’s pocket, courtesy lower overheads and subsequently higher royalties. Yet, the discussion around micro-economies is not solely around funding a concept, a product or a book. It could be just around the concept of sharing or subletting space you have available, as is the case with Airbnb. Say you are attending an event in Oslo, Norway, and you need an economical place to rent instead of a hotel, Airbnb is the place to go. Airbnb lets home and property owners list (for free) their property—maybe it is that extra bedroom in the converted garage, or the whole house if they choose on the site. Travellers can pick from over 100,000 active listings in 192 countries, depending on what they are comfortable with paying. And before they book, vacationers can read reviews about their hosts (and vice-versa) based on previous Airbnb experiences. From the booking system to the payment everything is handled via Airbnb, who charge a transaction fee per booking. Budget hotels are justifiably nervous already. They should be—Airbnb is now the world’s hottest hotel chain, and all this from just a bunch of spare rooms. Impressive, to say the least. But what makes these micro-economies tick? And more importantly, why now? The internet’s been around for well over a decade, hasn’t it? Why then have these models only flourished in the recent past? Now, as with any marketplace, there is a huge element of trust involved, trust that is based on knowing the reputation of the prospective seller. But it is only recently that we have finally been able to search for a tonne of background information on practically anyone by searching Google, LinkedIn and Facebook, or as some describe, the internet of people. With that trust hurdle crossed, what is to stop end consumers from directly determining the true value of a product or a service in other market segments as well? Micro-economies are here to grow, and it’s only a question of which industry they will disrupt next.