Summary: The Crowdfunding Revolution

Review and Analysis of Lawton and Marom's Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• ISBN:
  9782511022283
• Topic: Negocios y empresa
• Subtopic: Emprendimiento

The must-read summary of Kevin Lawton and Dan Marom's book: `The Crowdfunding Revolution: Social Networking Meets Venture Financing`.

This complete summary of the ideas from Kevin Lawton and Dan Marom's book `The Crowdfunding Revolution` shows that crowdfunding is an innovative, collaborative way to fund projects: it is the fusion of social networking and venture capitalism to obtain funding for worthy causes, get capital for companies in exchange for an equity stake or to pre-sell items to fund production costs. In their book, the authors suggest that crowdfunding has the potential to be even more successful than traditional methods. This summary explains how you can take advantage of collective IQ and wallets, and how to implement this new type of investment model.

Added-value of this summary:
• Save time
• Understand key concepts
• Expand your knowledge

To learn more, read `The Crowdfunding Revolution` and discover the new, exciting route to funding.

Summary of The Crowdfunding Revolution (Kevin Lawton and Dan Marom)

The Road Here

Crowdfunding isn’t something that’s going to come together in the future. It’s already here and it’s already starting to make an impact on how businesses and other organizations fund various projects.

Crowdfunding has become viable and feasible due to the combined impact of four distinct factors which are features of today’s business landscape:

1. The rise of the crowd
2. The decline of conventional financing
3. The rise of outsiders with good timing
4. The emergence of early stage funding

All of these developments have led to the rise of crowdfunding as a viable way to fund startups and individual projects alike. Crowdfunding is a vibrant new way for companies to be funded, for projects to attract backers and for those who are passionate about something to show their support.

“Every few hundred years in Western history there occurs a sharp transformation. Within a few decades, society rearranges itself – its world view; its basic values; its social and political structure; its arts; its key institutions. Fifty years later, there is a new world. And the people born then cannot imagine the world in which their grandparents lived and into which their parents were born.”

– Peter Drucker

1. The rise of the crowd

In the developed world, the G-7 or “Group of Seven” represents an organization which was established in 1985. It was made up of the seven major economies of the world. Twenty-five years later, the G-7 had expanded to become the G-20 to represent the 20 major economies of the world. During that same twenty-five year period, the number of Internet users has grown from a few hundred to around 2 billion users out of a total populace of 7 billion people. Even without any formal organizational structure, the Internet can now be regarded as the G-2 billion. And if current growth continues, in around 5 years or so the world may have transitioned from G-7 to the G-7 billion.

“If Facebook were a country, it would be the 3rd most populated.”

– TechXav

Whenever that number of people come together, there is huge potential for the crowd to start disrupting all kinds of business and social activities. The popular term for one form of disruption is “crowdsourcing” which was first coined in Jeff Howe’s 2006 Wired magazine article. Crowdsourcing was in action even before it had a name. Free software and open source movements have always flourished on the network and today are continuing to grow and expand at an accelerating rate. This is hardly a surprise as even in ancient Greece around 460 BC, philosopher Democritus famously noted “Birds of a feather flock together.” The web just makes it easier for birds to find each other, swap ideas and self-organize to do interesting stuff.

While at one level the rise of the Internet is interesting and noteworthy, something more fundamental is happening. Physical constraints on human creativity are in the process of being removed and at the same time elements of social technologies are now being integrated into an expanding universe of new products and services.

“Social technologies (STs) are methods and designs for organizing people in pursuit of a goal or goals. Once the evolution of STs reached the stage at which large numbers of people could form cooperative networks and had the means for communicating and storing significant amounts of data, human organizations took on a different character – they became capable of emergent computation. Organizations of people have the ability to process information and solve complex problems that individuals cannot process or solve on their own.”

– Eric Beinhocker, author

The rapid expansion of Internet-powered social technologies has been far reaching and noteworthy:

• Affinity groups of like-minded individuals are everywhere. They are writing encyclopedias (Wikipedia), collaborating on difficult challenges and doing all kinds of other things.
• Almost everyone who uses the Internet today has become what’s termed a “pro-sumer” – someone who both consumes and produces information.
• An impressively large number of Internet users are also becoming “pro-ams” – amateurs who work to professional standards. Every time you review a restaurant you recently dined at, make some comments about a book you purchased online, share photos or re-mix YouTube videos, you’re doing things which would have been impossible to achieve just a few years ago. Social technologies delivered by the Internet have lowered the opportunity cost for people with talent and knowledge to exp...