Funding Crazy Ideas
By Peter H. Diamandis M.D. on February 05, 2013
In this blog, I'm going to introduce you to the crowd funding site RocketHub and how it aims not only to tell the story of people looking to fund their dream projects, but how crowd funding can help science move forward.
"The day before something is a breakthrough, it's a crazy idea!" That's one of my Peter's Laws, and I really believe it. A lot of true breakthroughs come from very nontraditional places, from players you'd never imagine had it in them.
Do you know that the National Institutes of Health (NIH) funds more researchers over the age of 70 than researchers under the age of 30? Michael Milken told me this at one of his recent gatherings. "Experts" really hate to risk backing a truly revolutionary idea because it's risky... If the idea fails, they have egg on their face for backing it. And if it succeeds, the area where they "used" to be an expert is now completely disrupted and they are no longer the expert! It's a perverse situation, which means large companies and government agencies typically don't take the risks that they should. Enter crowd funding and crowd-generated science.
I'm really excited about the ability of individuals and small teams to do bold things in science, ideas that at first might seem crazy until they're proved to be remarkable. Thanks to crowd funding, there's a chance for the crowd to take risks together, fund hunches and ultimately just try a lot of new directions.
The crowd funding site RocketHub actually "started in the world of arts," before expanding its reach, CEO and co-founder Brian Meece told me during our recent interviews in New York. "RocketHub came from my own pain points as an artist. I wanted to make an album with my friends. It cost about $7,000 to $10,000 to do that. Instead of putting money on a credit card, or tapping into the vacation fund, I turned to crowd funding. What I realized was that there are tons of artists and idea-makers and thinkers that have ideas that want to get them made, and a community that believes in them. Ultimately RocketHub was born."
"What was really great was it wasn't just artists. We found a number of scientists raising five figures on the site -- funds that allowed them to take the first step on their research," Meece said. "When grants and research money became unavailable, crowd funding stepped in. The crowd wanted to share in the excitement and impact of the science. We had an amazing range of projects."
- Raising money to study the DNA of ancient Romans, to get a true sense of the people from different parts of the empire who lived there and contributed to its life.
- Support Zombie Research, to study certain fish parasites that affect brain function and could have potential for understanding the human brain.
- Tweeting to outer space -- sending messages to alien life forms light years away.
RocketHub began in 2010 with five campaigns (including Meece's). Now it handles about 1,000 fundraising campaigns a month from all over the world -- over 150 nations. "Millions of dollars flow through the site on a regular basis," Meece said, "and millions of people come to the platform sharing projects and funding projects."
For anyone who wants to fund a project on RocketHub, Meece offers three pieces of key advice:
- Be passionate and creative. "Start with an amazing project with a person front and center who's passionate about seeing the project come to life," Meece said. And use a video -- it's important. "Just the fact that you're making stuff isn't enough: You have to cut through the clutter with emotion. We're in an emotional age. Artists know this -- they have the highest hit rate with crowd funding."
- Build a core network of supporters. These are people who already know you, of you, your reputation. "Crowd funding is taking social capital and translating that into real capital through this online process," Meece said. "It's trust, reputation, respect, leadership." Your community becomes evangelists for your project in an authentic manner, and "that's where the phenomenon of crowd funding gets powerful," Meece said. "Some 75 percent to 80 percent of funds come through first-degree and second-degree networks. You have to have a community to initiate that traction."
- Offer cool perks and rewards. "Every successful project has stuff people want," Meece said. To raise money for his band, he offered his finished CD for a contribution of $10. For $20, the CD would be signed by the band and delivered to the contributor's doorstep. For $50, the contributor's image would appear on the CD cover. Meece ended up raising $6,000, which was well over his goal. Perks help give the audience "a piece of the journey," he said. "Sell the journey and have these multiple points of impact so that folks can pick where they want to play."
The average RocketHub campaign is between $5,000 and $6,000, with most activity in the $3,000 to $35,000 range. Meece believes that crowd funding has the potential to raise millions for individual projects. "The social ritual of crowd funding will become mainstream," he said. "This is just the beginning."
But it isn't simply about money. "We don't judge projects on how much money they're raising but on the impact they're having on their communities," Meece said. "That can be massive, launching tens of thousands of products that impact local communities. We're changing the world.
"This is the difference between folks making stuff happen and not -- it's an important chasm that's being leapt with RocketHub."
In my next blog I'm going to write about OpenIDEO and how it has built a community for crowdsourcing innovative ideas and solutions.
NOTE: Over the next year, I'm embarking on a BOLD mission -- to speak to top CEOs and entrepreneurs to find out their secrets to success. My last book Abundance, which hit No. 1 on Amazon, No. 2 on the New York Times and was at the top of Bill Gates' personal reading list, shows us the technologies that empower us to create a world of Abundance over the next 20 to 30 years. BOLD, my next book, will provide you with tools you can use to make your dreams come true and help you solve the world's grand challenges to create a world of Abundance. I'm going to write this book and share it with you every week through a series of blog posts. Each step of the way, I'll ask for your input and feedback. Top contributors will be credited within the book as a special "thank you," and all contributors will be recognized on the forthcoming BOLD book website. To ensure you never miss a message, sign up for my newsletter here.