What is CrowdFunding
CrowdFunding can be described as a way to raise funding for the development of a product directly from those who consume that product.
CrowdFunding isn't new; Kickstarter, being one of the main players, helped pioneer the business model as a platform for CrowdFunding. There are now many specialist CrowdFunding platforms that have the objective of connecting those seeking funding with those who'd have an interest in the resultant products or outcomes of projects. This should not be confused with raising investment funding for a company as no equity stake is involved, or CrowdSourcing, which often relates to folks giving their time or materials to a project.
Typically, approaches to CrowdFunding include the concepts of selecting the funding contribution you're prepared to make, as it relates to value you'd place on the outcome and any specific rewards being offered. Additionally, the notion of influence on direction, content, and earlier availability are also strong incentives. Finally, to establish some momentum and a destination point, a funding time deadline is key component, as well as the obvious funding value sought.
In a classic CrowdFunding model, over-funding is generally a positive thing, although the commitments you'd be underwriting if your reward model is off the mark, can be a struggle. The CloudSET CrowdFunding model shouldn't have the same sort of challenges in regards to over-funding, since Coherence have written and run it's CrowdFunding module on Zendesk and uses a different funding collection principle.
Why CrowdFund CloudSET
Traditionally, companies fund their product lines based on either profit revenues, investment equity, or sweat equity. This plays to the risk & reward model or 'build, and they will come'. This throws up such considerations including: how much to develop, how do we price, will we make or lose money? A recipe for slowness and caution.
It's also an open secret that an early adopter customer often fund initial development to get what they crave. This is often a great way to get started, but you can wait a long time for the type of customer to come along who has specific requirements that they can justify the majority of funding.
The positive aspects of covering development funding up-front, is that vendors not looking to recover the development budget from their future purchases, which means vendors can be a lot more aggressive with their pricing to attract more customers.
For customers it's an alternative to just voting-up a Feature Request on forum or resorting to all sorts of tactics to influence the vendor. 'Vote with your wallet', put some 'skin in the game', sponsor what you can afford to make it happen!
Like companies that provide services around OpenSource, Coherence will take CrowdFunded capabilities into their product line and develop appropriate charges for its provisioning and through life-support. However, unlike OpenSource, Coherence will retain IPR and not make source code available, as significant levels of Coherence background IPR will be used in the development of new and extended capabilities.