BidOkee is establishing a cooperative model through which networks, resources, connections and best practices are shared between campaigns to realize crowdfunding’s original potential.
BidOkee’s CEO, Eyal Lichtmann, contends a major problem with crowdfunding is that small campaigns are being pushed aside as big corporations look to dominate the industry.
Approximately one million crowdfunding campaigns are launched annually. Over $20 billion in crowdfunding transactions will occur this year – a 100% increase over last year – according to Equitynet. A World Bank report estimates that, by 2025, this number will spike to $300 billion annually, while others estimate as high as $500 billion, with up to $3.2 trillion in economic activity.
Entrpreneur.com reports how difficult it is for start-ups to get funding despite the proliferation of crowdfunding worldwide. Currently 90% of the world’s online population has access to crowdfunding and $1,400 is raised in donations every minute. Still, only 3% of all start-up funding comes from crowdfunding.
And E-commerce Times reports that Fortune 500 firms are actively experimenting with crowdfunding as a product launch and testing platform, potentially pushing out the small players. UC Berkeley is actually looking into providing courses for corporate executives wanting to launch crowdfunding campaigns. In addition, many charities, NGOs and scientific and health research projects are also looking to crowdfund their projects.
“As a result, traditional crowdfunding platforms, and the industry as a whole, are becoming very crowded,” Lichtmann says. “With more and more competition, including consultants and corporate campaigns, the bar is getting higher for small businesses. The cost and effort to successfully execute large campaigns is becoming prohibitive for many small firms and entrepreneurs. As crowdfunding platforms get bigger, start-ups are getting pushed out.
“Breaking through the barriers is an uphill battle,” Lichtmann continues, “especially now, as small start-ups are being eclipsed by hundreds or thousands of campaigns launched by deep-pocketed Fortune 500 companies and established organizations. The biggest advertising and marketing firms, scientists and crowdfunding consultants are taking over. The bigger the crowdfunding site, the less a small start-up can compete.”
Dr. Richard Swart, the director of research on crowdfinance at UC Berkeley, indicated there are Fortune 100 companies that are thinking about launching a crowdfunding campaign.
Corporations have enormous resources to launch and build support for their crowdfunding campaigns and that is driving the cost of crowdfunding services higher for the little guy. Companies such as Coca-Cola, Microsoft, Dodge and DC Comics are using crowdfunding for marketing purposes, with the deleterious effect of marginalizing smaller players seeking to raise funds on the same platforms while at the same time driving up marketing, PR, consultancy and production costs within the industry.
“Crowdfunding was intended to enhance the start-up experience and bypass the onerous process of finding traditional investors to launch an idea or product,” says Lichtmann. “It was not intended as a marketing platform for established or already successful companies.”
An example, he says, is the Pebble watch, which already had sufficient cash on hand for their project but wanted the additional exposure Kickstarter offered.
“And now the biggest consumer companies in the world are moving into crowdfunding as a platform to market test and pay for their product launches,” says Lichtmann. “This is counter to the whole notion of crowdfunding, which was supposed to assist start-ups penetrating the vast expanse of the marketplace.”
Some activist-commentators are calling out the commandeering of crowdfunding by multinational behemoths, though not everyone agrees, and a healthy debate is beginning.
“The survival of crowdfunding requires a true cooperative model that has the best interest of the small player in mind,” he says.
Lichtmann’s company, BidOkee, has launched a beta version of what will be a do-it-yourself crowdfunding platform based on a cooperative model.
“The DIY model we are building allows people the freedom to share, cooperate, assist, collaborate and utilize more human resources through cross-pollination of projects and ideas to yield infinitely more unique possibilities,” he says.
Scott Steinberg, author of The Crowdfunding Bible, featured BidOkee on NewsWatch TV. He declared: “This could change crowdfunding as we know it.”
Combining DIY with a cooperative model may sound contradictory, Lichtmann acknowledges.
“But a do-it-yourself model is about being wholly independent,” he says. “And the cooperative model is about relying on the goodwill and assistance of others. And that is the exact formula BidOkee is looking to propagate.”
BidOkee is establishing a cooperative model through which networks, resources, wisdom, advice, connections and best practices are shared between campaigns.
“If we reach our goals, we hope to share over $100 million annually back with campaigns,” he says. “But that number can grow higher. In addition, we are looking at cross-pollination opportunities that allow one successful start-up crowdfunding campaign to assist another start-up campaign with backers, users and other resources.
Also, with the integration of loyalty rewards through a gamified system, campaigns can have access to tens of thousands of additional leads for their campaigns. We want to change 60% failure rates to 80% success rates. That is what we are striving for.”
As Darryl Burma, CEO of Crowdmapped.com says, “BidOkee will definitely disrupt the industry. It is doing something we have not seen before and is a game-changer.”
BidOkee is currently developing the beta platform into a software-as-a-service (SaaS) model, which will give anyone the opportunity to launch their own independent, self-directed crowdfunding campaign with tools and features no other platform offers.
“We are now crowdfunding for crowdfunding and hope people will support our campaign to get this model to market” says Lichtmann. “We think this is the future – a future that realizes crowdfunding’s original potential.”