Big business turns to the crowd for advice -- and donations
Indiegogo expands its popular funding platform to the Fortune 1000 as the Internet flexes its muscle over the way products are made.
Forget about buying their stock. Now you can donate to giant corporations like General Electric or Anheuser-Busch, assuming you'd actually want to.
Indiegogo on Wednesday launched "enterprise crowdfunding," expanding beyond novice entrepreneurs, filmmakers and charitable causes to the world's largest companies, CEO Slava Rubin announced at the Consumer Electronics Show in Las Vegas.
The first question might be why big businesses need crowdfunding. Indiegogo and its rival Kickstarter have become valuable launching pads for cash-starved projects ranging from a humanoid robot named JIBO, the activity tracker Misfit Shine, as well as vibrators, high-tech smoking devices and even potato salad. (The second question might be why you'd want to give them your money.)
We can't answer that second question, but the answer to the first: They want to outsource R&D, said Rubin. The logic goes something like this: if consumers really, really want something, they'll give their money to help create it, allowing companies to get a sense for demand for their products.
"Indiegogo is a great testing ground to evaluate how the market is receiving their ideas," he said.
That's what GE's FirstBuild group, which dreams up next-gen appliances, did last year for its Paragon Induction Cooktop.
"We get it. We are a subsidiary of GE, so why are we doing an Indiegogo crowdfunding campaign?" reads the company's page on Indiegogo. "Crowdfunding on Indiegogo gives us the opportunity to validate that a cutting edge group of early adopters wants Paragon before we make hundreds of thousands of them."
GE plans to ship the cooktop to funders this month.
Headphone manufacturer Harman International Industries on Wednesday said it plans an Indiegogo campaign to test the waters for its new line of noise-canceling tech on its JBL headphones. And Anheuser-Busch's Shock Top is running a campaign for its Doppler water-saving gadget that tracks and sets daily water consumption.
Not for the little guys
To be clear, Indiegogo's new enterprise crowdfunding isn't for startups or an average size company. That's because it'll be too expensive for them, says Rubin.
Rubin declined to say what Indiegogo will charge corporate customers, but noted that costs will effectively exclude all but the Fortune 1000 -- that is, the largest US companies ranked by revenue.
That's different for most entrepreneurs looking for funds on Indiegogo. The site collects 5 percent of the donations reaped through its platform. All told, about 9 million projects have raised more than $800 million since Indiegogo launched in 2008.
It's something that Indiegogo's Rubin has clearly thought about.
"People fund things for different reasons," he said.
"Some people fund them because they care about the person or the cause...Some people want the perks. They just want the stuff."