Assignment+2+-+Kickstarter+and+Internet+Commerce

= What is the fundamental economic basis of internet commerce? = toc

Introduction - What is internet commerce (e-commerce)?
Team 5 Net205 will examine and demonstrate their understanding of the principles and practices of Internet Commerce. This Wikispace will be used to showcase and analyse the Internet, Network and Attention Economies used by Kickstarter, the “worlds largest funding platform” boasting approximately $684 million raised for 44,000 projects with donations from over 4.4 million individuals, since operations began in 2009. (Kickstarter)

The internet has facilitated electronic commerce (eCommerce) which has enabled opportunity for businesses to move to an online environment. This process is referred to as digital intermediation, the reliance on the internet to facilitate financial transactions (Flew, Chircu). Kickstarter not only has the first mover advantage, being an internet business initiative, it also takes an intermediation role, acting as an agent between the creator’s ideas and the funding sources (Chircu).

This project will investigate the Internet Commerce, the Network Economy & Attention Economy. (elaborating slightly on all sections, once everyone near completion, I can summarise from their section...)

=Kickstarter Background **- Andrea & Volker**= (History)

The initial idea
In mid-2008, Perry Chen explains his business model for Kickstarter, then referred to as KickStartr.com (McCarthy, 2008). Chen's Website is an online community, designed to help artists, musicians, inventors and filmmakers amongst others to raise money from a large number of donators, referred to as the crowd. To create attention for their project, artists, musicians etc. are encouraged to upload media that will describe the subject towards which the fundings are intended to go.

However, users of Kickstarter are supposed to to set a deadline by which the entire amount should have been raised. If they don't meet the deadline, the funding will not be granted. All projects are finite, which means, ‘there's no long-term return on investment for supporters. There's not even the ability to write off donations for tax purposes (Lagorio, 2010).

Expectations
Co-founded by Perry Chen, Yancey Strickler and Chalres Adler, Kickstarter was expected to run at a loss for the first two years, although the revenue forecast Chen projected for 2008 was US$ 250,000 in 2008 and $5 million in 2009. Surpassing these barriers, Chen expected to raise more capital to expand Kickstarter.

Reality
Hardly one year later and only a few weeks into the business, since its launch in April 2009, Perry Chen gives a speech about the first interesting crowd funding cases, on June 1 2009 at the Ignite NYC IV conference (Forrest, 2009). The event has been recorded and is available from Youtube (see below). Quite openly, Chen gives an overview of the things they realized from the experience of the first five weeks. He derives six principles from the experience:

●Be real

●Have a clear goal

●Offer fun rewards

●Show you can execute

●Involve the audience

●Spread the word

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Only hardly one year into business, that hasn't stopped close to 100,000 people from pledging to Kickstarter projects by May 2010.

Not for everybody
Crowdfunding through Kickstarter doesn't mean that anyone can come along and expect their idea or project to be supported. There is a rigid approval process in place to verify if the go-ahead can be given to post photos, videos, and a plea for pledges. However, genuinely new ideas for highly inventive projects are usually shoe-ins, while business ventures will certainly not be approved as they are expected to have adequate existing funding. According to Chen, projects succeed more often when they are founded on a creative idea, supported by a strong existing network - a vital reason for the Kickstarter team to encourages users to make use their online social network.

An Example
Most interestingly, in the comments section to the above report I found some interesting material. Daniel D’Agostino reports that he tried all of the above, but still received a No-Go (Lagorio, 2010):

‘I've done all that and have a great product (search "Titan" on Kickstarter) but still came up short with Kickstarter. I reached out to several tech bloggers, sent a press release, have a great video, have an interesting story, launched a video adwords campaign through YouTube, and tapped my social network which I am grateful for (i.e. Friends and family). I truly believe that two other components to launching a successful Kickstarter project are luck and how much money you have to hire a great marketing company. A great marketing company will leverage tried and true channels and their existing network of contacts in the industry to spread the word while crafting a press release that resonates well and is distributed with force. I've learned that it is possible to do everything right and still fail, no matter how good the product is. For more information about the Titan project, visit: @http://www.kickstarter.com/projects/titan/titan-the-best-clear-acrylic-vehicle-smart-phone-h.’

Marty Koenig, being a Kickstarter advocate, evaluated D’Agostini’s project at Kickstarter, responding:

‘Daniel, I spent some time on your Kickstarter campaign. I have some suggestions: http://www.kickstarter.com/projects/titan/titan-the-best-clear-acrylic-vehicle-smart-phoneh

Daniel,

I might suggest a couple things:

1. The first 30 seconds of your video is a downer and all about you. I was turned off after 10 seconds. Nobody cares about how downtrodden your life has been. Nobody cares about all the other things you've invented. That's about you, and I don't care. Neither will any backers except friends and families. No evangelists. It needs to be about the safety and the "why" of the product. Did you have anyone review your video? How about your bio - again its a downer.

2. Frankly, I couldn't tell what it was even looking at the pictures. Again, the pictures seem to be all about you, and how mechanically inclined or artistic, or technical you are. It's not about the benefits and features which it should be. I needs to be so crystal clear why it's so important that everyone must have one. You're selling a product here that solves a huge problem. Key in on that.

3. I think its too big and clunky. A sleek/slim version might go over better. does it have to be so big?

4. Check out a couple things that could help you next time - a Kickstarter checklist and a Kickstarter Score: See my post below.

@http://bit.ly/L3JRPL

[]

Best of luck next time! Don't give up. There's a huge need for your product, it just needs messaged better and the question "why does it have to be so big?" has to be answered.’

A Success Story
2012: 1.2 Million Dollar crowdfunding result, using Kickstarter

Amanda Palmer, a musician and artist from New York raised about 1.2 million Dollars from approx. 25,000 people (approx. $50 p.p.) using Kickstarter, paying the bills for a record and release costs of an album and an associated tour (Reference to The Economist). In February 2013 Amanda gave a fantastic speech on Crowdfunding music at TED talks. The video has attracted nearly 2.5 million views over the past months.

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Amanda Palmer was with the band Dresden Dolls before starting hr new band Grand Theft Theatre. Click here to watch her performance at TED (ca. 14 min.)

A Failure
While the Crowdfunding campagne of Ken Honsky for his book, 'Above the Game: A Guide to Getting Awesome with Women' (reference) was very successful, aiming at a funding of US$ 2,000 and finally raising over US$ 16,000, the book itself stirred quite some controversy.

The book is described as an insult to women, while other voices say that Hoinsky has every right to publish this book under the ??? of free speech.

A sequence of events enfolds:

On 20 June 2013, Forbes Journalist Faba Rafi Atal received a comment from Kickstarter via Twitter, justifying their motivation to let the Crowdfunding for Hoinsky's book to go ahead (Matol, 2013).

One day later Kickstarter rows back, posting an apology on the Kickstarter Blog (Kickstarter, 2013)

On 25 June 2013 Ken Hoinsky decides to go public on Youtube and to face the controversy his book has stirred

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While he claims in his video that publishers and jurnalists are banging down his door, as of 2 July 2013, the book is only available for download directly through Ken Hoinsky. It is neither listed on Amazon nor on Ebay.

Analysis Social consequences?

Internet Commerce Models - Theresa
Internet Commerce & Crowdfunding > //- Brief outline using Amazon, Google & Ebay as examples to signify structure and flow //
 * __Internet Commerce concepts __
 * Crowdfunding and How kickstarter fits into the world of online commerce

Kickstarter’s innovative business model has challenged traditional business concepts through its intermediary ability. Hence, the ability to nurture ideas into successful entrepreneurial campaigns. Their business model aims to support the community by leveraging wealth creation.  Schrage suggests that all business enterprises should mirror the kickstarter model and incorporate it into their organisational structure, as to embrace entrepreneurial culture within the community (Schrage, 2013, p1). “combined with the low cost and easy-to-use social media technology platform, crowdsourcing is diversifying sourcing mechanisms, creating new markets and/or overriding the market share of traditional businesses by managing the scale of online communities in a flexible way for performing different tasks of varying levels of complexity”(Saxton, Oh and Kishore, 2010, p28) **Comparison Table ** > structured business plans and targeted marketing campaigns
 * __Internet commerce as opposed to Traditional Commerce __
 * **Traditional Commerce Concepts** || **Internet Commerce Concepts** ||
 * *  Traditional Commerce concepts are enabled through collaterals,
 * Enterprise management is governed by a collective body of business experts
 * Raising Venture capital usually requires assistance from financial institutions which takes financial power away from entrepreneurs || * Internet commerce is characteristically enabled by social media communication over the Internet
 * It is often democratic in that online communities participate and contribute to the decision making and management processes
 * Community Fundraising activity is prominent in raising capital fro projects and in doing so gives control and power to the people
 * <span style="font-family: Tahoma,Geneva,sans-serif;">It is more about maximsing ideas and concepts rather than the monetization of them - there is a SROI (Social Return on investment) (Lehner, 2013) ||

<span style="background-color: #4d4a8c; color: #ffffff; font-family: Tahoma,Geneva,sans-serif;">Crowdfunding Business Models There are two main forms of crowdfunding models that are currently used globally; <span style="font-family: Tahoma,Geneva,sans-serif; line-height: 1.5;">This type of crowdfunding relies heavily on the distribution of equity or debt amongst investors. The idea essentially helps businesses to raise capital through means of selling shares or part ownership of their business. Moreover it is a way for investors of a project / business to potentially obtain afinancial return on their investment. <span style="font-family: Tahoma,Geneva,sans-serif;">Examples from real life projects to be inserted here.
 * **<span style="color: #4d4a8c; font-family: Tahoma,Geneva,sans-serif; line-height: 1.5;">Equity based Crowdfunding Model (Investment Based Funding) **

<span style="font-family: Tahoma,Geneva,sans-serif;">This model relies on donations from crowd funders. In return, the funders can expect some kind of reward based around the product or service. .... To be expanded upon.... <span style="font-family: Tahoma,Geneva,sans-serif;">Examples from real life projects to be inserted here.
 * **<span style="color: #4d4a8c; font-family: Tahoma,Geneva,sans-serif; line-height: 1.5;">Rewardbased Crowdfunding Model (Donation Based Funding) **

<span style="font-family: Tahoma,Geneva,sans-serif;">The following illustration demonstrates the different types Crowd-funding that are utilised today and shows their value in economic terms;

//<span style="color: #404040; font-family: Tahoma,Geneva,sans-serif;">Image Courtesy of Glenn Peoples, 2013, ‘Crowd-funded venturecapitalism’, Retrieved from Billboard.com //

<span style="background-color: #4d4a8c; color: #ffffff; font-family: Tahoma,Geneva,sans-serif;">Flowchart Of The Equity and Reward Crowdfunding Models > - //<span style="font-family: Tahoma,Geneva,sans-serif; line-height: 1.5;">I will be designing an original flowchart to demonstrate equity based crowdfunding as opposed to reward based crowdfunding. //
 * <span style="font-family: Tahoma,Geneva,sans-serif; line-height: 1.5;">Crowdfunding Flowchart

<span style="font-family: Tahoma,Geneva,sans-serif;"> - Using statistics mainly from the articles ‘Crowd-funded venture capitalism’ and ‘Individual Crowdfunding practices’ for making graph /charts which will demonstrate the <span style="font-family: Tahoma,Geneva,sans-serif;"> success of various Crowdfunding models and their values.
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Model Analysis //(Graph to be drawn up)//

<span style="background-color: #ffffff; display: block; font-family: 'Lucida Grande','Segoe UI',Arial,Helvetica,sans-serif; font-size: 12px; text-align: center;"> SWOT ANALAYSIS OF THE KICKSTARTER MODEL - Team Contribution (in progress)
 * **<span style="background-color: #c2bd33; font-family: Tahoma,Geneva,sans-serif;"> STRENGTHS ** * <span style="font-family: Tahoma,Geneva,sans-serif;">Open to the community - Anyone can apply to have their project funded
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Funders have the opportunity to experience the latest products and services and participate ahead of time
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Democratic in its structure - it offers financial power to the people rather than banking institutions / lenders
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Fills an economic nieche - The creative arts community
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Crowdfunding has a long life-span
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Equity is dispersed fairly
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Unlimited fundraising potential || **<span style="background-color: #c2bd33; font-family: Tahoma,Geneva,sans-serif;"> THREATS **
 * <span style="font-family: Tahoma,Geneva,sans-serif;">There is limited or no regulation
 * <span style="font-family: Tahoma,Geneva,sans-serif;">There is no obligation for entrepreneurs to actually live up to their promises. ||
 * **<span style="background-color: #c2bd33; font-family: Tahoma,Geneva,sans-serif;"> WEAKNESSES ** * <span style="font-family: Tahoma,Geneva,sans-serif;">Puts pressure on Entrepreneurs - The Pressure of meeting start up deadlines
 * <span style="font-family: Tahoma,Geneva,sans-serif;"> Minimal Investor Protection
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Is aimed mainly at creative artists and not other forms of entraprenership || **<span style="background-color: #c2bd33; font-family: Tahoma,Geneva,sans-serif;"> OPPORTUNITIES ** * <span style="font-family: Tahoma,Geneva,sans-serif;">To fund obscure projects that otherwise would go unnoticed
 * <span style="font-family: Tahoma,Geneva,sans-serif;"> To Democratize Business economics further ||

<span style="background-color: #4d4a8c; color: #ffffff; font-family: Tahoma,Geneva,sans-serif;">Long Tail Effect <span style="font-family: Tahoma,Geneva,sans-serif;"> //- Case study Examples as point of reference to be inserted here//
 * <span style="font-family: Tahoma,Geneva,sans-serif;">Kickstarter projects create opportunities for fundraisers to reap the rewards of success through networked contribution made possible by community participation.

<span style="font-family: Tahoma,Geneva,sans-serif;"> //- Further expansion on Pretail and examples//
 * <span style="font-family: Tahoma,Geneva,sans-serif;">PRETAIL: The term currently used to define online crowdfunding networks and theway in which they now consume goods and services. It is the era of ‘pre-consumers’where people now have the opportunity to buy products and services in advance,ahead of time, via crowdfunding participation. (Luzar, 2013).

=Network Economy & Kickstarter- Irene=


 * Network Economy- Irene **


 * What is the fundamental economic basis of Internet commerce? **

The evolution of web technologies has opened the value of network economy to have greater potential socially, politically and economically due to the fact we go beyond previous limitations with communication via digital technologies. Allowing democratic and participatory potential which affords peer to peer and community interaction within the development and start up process of innovation.

When we change the way we communicate “and since communication is the basis of culture” (Kelly, 1997) we open ourselves to opportunities that are not solely defined by hierarchical commercial situations. Within the network economy, “significance precedes momentum; in technology the tipping point is much lower than… word of mouth” (Kelly, 1997). What digital networks creates is for each individual to move beyond the structure of their current geographical location to explore and connect with individuals, entrepreneurs and movements that are parallel to their cultural and social ideals.



What Kickstarter does beautifully is what Kelly outlined as the potential of networks ‘the ideal environment for cultivating the unknown is to nurture the supreme agility and nimbleness of networks’ (Kelly, 1997). This graph reflects the culture that Chen, Adler and Stickler wish to encourage and therefore the culture of their network allows it to be a perfect platform for those inventions and creations and supporters and users that align themselves with their network and the economy of the culture they foster.

As the law of plentitude discussed by Kelly outlined "mathematicians have proven that the sum of a network increase as the square of the number of members" (Kelly, 1997). Digital communities afford this rule of plenty. In the world of network economy, more gives more. This is seen in effect when projects in Kickstarter exceeded their initial project goal as it reflects the social good or desire for the project pitched in Kickstarter as seen by the image above. Due to the rich interactivity and plasticity of network economy, you have to adapt, be innovative and stay on top in case some other entrepreneur kicks you from the king of the mountain. (Kelly, 1997)

Most entrepreneurs that set up a project within Kickstarter, have brought with them their own network and what Kickstarter has allowed them is social credibility for their project and a trust in backing them. (Chafkin, 2013) As the network economy within Kickstarter defines"it is not only the material capital, but very much also the cultural capital that a project is able to accumulate” determining whether the project gets off the ground and fundamentally succeeds. (Sorensen, 2012, p.741)

Kickstarter has afforded the entrepreneur a platform to allow them to obtain start up funding beyond their immediate social pool. “Crowdfunding is to tap and motivate a large audience, with each individual member of the crowd contributing only little, but with a high combined impact” (Lehner, 2013, p.4) As the organic spread of network economy has effect in this platform, it allows people who are inspired by the technology, artistic and music to support those new talents that are within the culture of Kickstarter. Within the realm of network economy ‘wealth flows to innovation, not optimisation’ (Kelly, 1997) and Kickstarter is the platform of innovation, with “each project attracted 1700 crowdfunders on average” (Belleflamme, et.al.,2010, p.7) entrepreneurs obtain the capital both financially and socially required to get their idea floated. Through “peer effects and recommendations, not network externalities are driving the success of crowdfunded projects” (Sorensen, 2012, p.729) for the idea itself in today's economic climate is not enough to make it successful.

The political aspect of crowdfunding is that it allows innovation to move beyond hierarchical funding institutions although to some degree it still requires the gatekeepers of publishing and promoting companies to allow ideas to fully flourish in society. Though political and social changes to Senate Bill1970 was adjusted to cover crowdfunding to include a “the new crowdfunding exemption is conditioned on mandated disclosures that gives investors the opportunity to evaluate the merits of investments” (Hazen, 2012, p.1769) and the and JOBS Act 2012, to allow investors stocks in Kickstarter launched projects. (Chafkin, 2013)

The politics involved in Geoweb, innovation in this area have had crowdfunded technology development, influences the transformation and unravelling of political and social norms that would previously have limited creative, technological and socially desired evolution of products. I want to use this as an example. Refine this paragraph to lead in to Jelena's subject.

=Attention Economy & Kickstarter- Jelena=

History of Attention Economy
The term Attention Economy was coined by Nobel Herbert Simon in 1971 who identified attention as a scarce and most important driving force in new economy. The rapid growth of information courses scarcity of attention (Simon as cited by Iskold,2007).'//'Because of this information explosion, we no longer read - we skim''// (Iskold,2007).Due to the overload information on the internet online retailers must provide customers the content that is relevant to them otherwise they will lose them and therefore the money. For this reason in the Attention Economy it is essential that the retailers keep customers happy and therefore earn money (Iskold,2007).We are moving to an entirely new era different from traditional factory mass production of material items such as money, prices, laws of supply and demand, we now have to think in new economy terms (Goldhaber,1997).

According to Devenport and Beck, //the fundamental principle of economy is that the currency has to be scarce// (Devenport & Beck,2001)//.//Due to the emerge of new technologies the amount of the information available on the internet is enormous. Considering the rapid increase of the web pages and the internet traffic it is impossible for every new product information to be considered and consumed due to the consumers limited attention.//Such Internet features as personalization, search capabilities and multimedia content are natural attention-getters, but an organization’s ability to execute them is still limited (Davenport & Beck, 2001).//

What is Attention Economy?


We live in an era where the increasing usage of internet and web 2.0 technologies is giving a rise to a new economy known as Attention Economy where the money is not the most important currency, instead the attention is the scarce resource.//We are living a temporary attention economy in miniature right at this moment (Goldhaber, 1997).//According to Davenport and Beck, Attention is the real currency of businesses and individuals (Devenport & Beck,2001). The attention is what everybody wants and what is difficult to capture. In our everyday lives we spend more time making decisions on where to focus our attention then what we do with our money (Goldhaber, 1997). Attention generates money and therefore is inevitable resource for the business in order to prosper and grow. As stated by Davenport and Beck, With the increasing amount of information on the internet comes an increasing demand for human attention (Davenport & Beck, 2001). Therefore in the new economy attention is a kind of a property as opposed to the traditional economy where the only currency was money itself. //Thus obtaining attention is obtaining a kind of enduring wealth, a form of wealth that puts you in a preferred position to get anything this new economy offers (Goldhaber,1997).//

In order to get attention on the internet,the information must be emitted fist thus the information emitted must receive attention in order to be valuable. //Therefore an information technology is also an attention technology, or in other words, a transfer of information is only completed when there is also a transfer of attention proceeding in the opposite direction// (Goldhaber,1997). In order to triumph in the Attention Economy the interaction with the customers is of a great importance. The customer is the one who determines what business win and what fail (Berman,2002). The customer perception will rule and networked customers as active collaborators will have the power to shape the way the Internet economy works.

According to Iskold the two key ingredients of the success in the Attention Economy are:
 * Relevancy and
 * Privacy.

The user is put in control of his information by choosing what services he wants to receive in exchange for his attention information.

__Attention Trust__ An organization for protecting consumers funded by Steve Gillmore and Seth Goldtsein



Kickstarter and Attention Economy
//Crowdfunding involves relatively small contributions of many consumer-investors over a fixed time limit (generally a few weeks) (Bayus & Kuppuswamy, 2013).// Crowdfunding is a new and emerging type of funding in the digital age. It is becoming increasingly popular way of funding for creative individuals who have a project that needs to be funded. Crowdfunding is characterized by the use of the Web 2.0 technologies as the users can participate in the project they sponsor. For instance, users can vote on the projects they fund and receive financial and non financial benefits, therefore involving the projects beneficiaries before its launch creating attention around the project (Gorshkov,2011).

Kickstarter is all or nothing crowdfounding site for creative people with one-off idea, people who have a developed social network and who use social applications. If the funding goal is not reached the project founder gets nothing. If the goal is reached the project gets funded and the backers get a reward as a sign of gratitude. Many successful projects have been founded on Kickstarter making it a popular crowdfunding site. There is however a criteria that the users need to consider before joining Kickstarter such as: A project must be approved by the site so that the users can requesting for pledges, after the project has been approved it must set a goal amount of money and a time period, for example $2000 over 30 days. And finally users must have an active and established social network as a backup and support for the project. Perry Chan the founder of a Kickstarter believes that for a project to succeed it needs to be creative and backed up by existing strong network.

Artists and entrepreneurs who used Kickstarter reveal few tips on how their social network helped them found-raise their project. For instance, Smith and her band says that her fans on Facebook and twitter helped in reaching her goal as much as the donators did as they helped spread the word, she has found new supporters and fans (Lagorio,2010). Smith says that people's attention is gained by constantly updating a website and offering awards and incentives to backers and also by keeping a web page active and vibrant (Lagorio,2010).

In order for the entrepreneurs and artists to successfully reach their goals and collect money from the backers with a Kickstarter they need to gain attention from the public and prosperous donors. To gain the attention the entrepreneurs need to build a creative, original and captivating video campaign that would sell their product and gain a positive feedback from the public. If the project is creative and original enough it will be successful. A backup from the fans who can be obtained via social networking platforms is very useful. Again the attention needs to be gathered from the friends, family and fans who would help spread the word and bring more supporters. In this community collaboration the focus is to get the attention which is a scarce resource in this new economy.

Kickstarter has a rather strict criteria for the prosperous projects that need to be funded. The project not only has to be creative and original, it needs to a clear goal,a creative video, reward for the backers and it needs to gather a certain amount of money over a certain period of time. The projects that fail to meet the mentioned criteria or do not meet the goal do not get any money, for this reason the artists are encouraged to create their own videos that would potentially attract the backers and promote themselves in order to get the green light. That way the creators are in control of their work and it is up to them weather their project will succeed and get the attention.//You green-light yourself--the idea that creative people don't need intermediaries--has long been one of the Internet's great promises, and Kickstarter appears to finally deliver on it (Chafkin,2013).//

One of the Kickstarter founders Perry Chan says that Kickstarter does what is best for the community and that they are not afraid of the competition".The important thing is that things get created--not that we have ownership of the path to creation."( Chafkin,2013 ). Kickstarter is an exclusive platform in comparison to Indiego which is a more flexible site. Kickstarter focuses on community and not the monetization and they ban categories such as charity, startup capital, home improvement products and so on. For instance, they refuse to take on gadget makers although they make a promising group of customers because they want the best for the ecosystem.As Chen said according to Chafkin, //"It's not about monetization. It's not about maximization--of anything. We think this is healthier, better." (Chafkin,2013).//

__The importance of customer involvement__

Kickstarter makes the ideas and creative projects come to life but even if the projects are not successful the benefit from the backers feedback on the project can assist the creators to improve their work, connect with other supporters and investors and build on new ideas. The collaboration with the customers and connection with fans allow the creator to fulfil customer desires as they listen and engage with them. For example the newest Kickstarer project Massive Chalice, a video game set in fantasy realm used the feedback from their backers in order to improve the game and satisfy the needs of the customers. Their involvement with the customers helped them reach their success and gain new ideas. Murr, the creator of the game things that the project would go differently if the game was under a traditional game-publisher route, instead it involved the community and let the customers set the scene for the game (Geigner, 2013).

Another example is the project Gamasutra where the creators decided to host a three hour Livestream party on the last day of the campaign to celebrate their success or failure with their backers and fans. The event helped them complete their goal of $500,000 as they connected and engaged with their fans.'//'What matters is that you are using the campaign to connect with fans and get the money needed to succeed where you need to'' (Knight,2012).// This example shows how the involvement with fans can be beneficial for the projects as the creators engage with their fans and that is the essential part of the successful project campaign.

__How Kickstarter attracts new clients by offering a variety of features on its website:__


 * Kickstarter offers social integration with Facebook and Twitter and allows users to discover and share new projects with friends.
 * Kickstarter launched a phone application for iPhone that offers users to have access to all the projects on their mobile phones.
 * Videos of the current and most interesting projects on the Kickstarter website and a section of videos on the right hand side of the website classified as: projects ending soon, most popular,most funded and so on
 * An application for location finder in order to find the projects in the area selected
 * A discover browser that shows the most popular projects allowing users to explore new projects
 * Tags on the right hand side of the website that classify projects according to the name
 * Category section on the right hand side of the website that shows different categories of the projects

Kickstarter uses the internet to connect the clients with backers and gain the popularity through the successful projects. As Kickstarter gains 5% of the total funds raised in the project they rely on the attention from backers and their connections in order to make profits.The focus on creative and selective projects is why Kickstarter is gaining such a popularity in today's digital age where there are numerous crowdfunding websites available for all types of funding. What makes Kickstarter unique and popular is the way they combine the all or nothing funding model with the selected categories of projects they accept and the rewards offered to the backers as a sign of gratitude.

**Gift Economy** - Andrea and Team Contribution
//To be collated// =Conclusion - Andrea & Volker= The answer to the final question. Conclusion is a mirror of the introduction. Do not introduce new points.

=Group Progress Report - //see more on group progress report page//= Include a point-form report on how your group is working together and any problems you are facing as a team. The details of how you will work together, what tasks are involved, what you will produce, the research and analysis involved. For instance, what would be the best way of keeping track of the way your team is working together (item 6 above)?

Working together
Team 5 consists of Volker Janssen, Theresa Keecherer, Jelena Ivovic, Andrea Hall and Irene Pollack.

Tasks Involved
●Initial Research and collation of Information in Point form (Team effort) ●Kickstarter SWOT (Team effort) ●Wikispace Layout and Design (Theresa to source pictures) ●Kickstarter showcase of succes stories video to be on home page (Theresa & Andrea)

The Final Product
We have created a Wikispace as the publishing platform for our assignment 2. A new page will be dedicated to each area.

The Research
Each team member has responsibility for a particular area of research and will write up or work on that particular area.

Platform & Communication Use
Team 5 has been using: In addition to the above platforms, we have been checking in on the Net205 Wikidot. The number of different platforms in use has caused some confussion at times, not knowing which one to refer to for what. We seem to have established a good routine now and all members are using the platforms as required.
 * Facebook for group discussion and sharing of links and articles.
 * Wiggio for creating group documents such as Assignment 2 outline and unit work requirements (reading summaries & discussion questions).
 * Sub directories are set up on Wiggio for ease of locating particular files as there is now a substantial number of files created.
 * Skype for weekly audio chat, update on progress, planning for the coming week/s. Allocation of readings and activities.

All members are able to express their opinions and their contribution is respectfully acknowledged. At times a team member has been unable to meet the required deadline. Other members have assisted when notified of a problem.

Team Issues
The allocation of a Liaison person has been a very helpful. Many of us have found the course material and instructions not very clear and confussion at times. Clarification from the Liaison person has assisted working through these issues.

How did we distribute the tasks fairly?
Sections were allocated to team members. Each one required to conduct independent research and bring back to the group, and include in the draft outline.

Structure (Wikispace pages) (proposed by andrea for draft outline submission, but can changed) Home (Intro & overview) Network Ecomony &Kickstarter Attention Economy & Kickstarter Internet Commerce & Kickstarter Group Report Reference Page

References:
References necessary for everything. I suppose they should academic and peer reviewed. Check with Rich if we are using APA referencing? Unit Outline states APA 6th Ed. Andrea

A2 outline states: we can hyperlink reference to APA reference list - can we have a page on Wikispace specificallu for Reference list? All references in the assignment to be hyperlinked to this page. (Andrea)

Irene's references; sorry don't have time to sort these out with the widget. Belleflmme, P., Lambert, T., & Schweinbacher, A. (2013). //IndividualCrowfunding Practices//. VentureCapital: An international Journal of Entrepreneurial Finance. Routledge, London, UK. Retrieved from; []

Chafkin, M. (2013). True to It’s Roots: Why Kickstarter Won’t Sell. Fast Company. (March) Retrieved from; @http://www.fastcompany.com/3006694/where-are-they-now/true-to-its-roots-why-kickstarter-wont-sell

Hazen, T.L.,2012. //Crowdfunding or Fraudfunding? Social Networks and the Securities Laws –Why the Specially Tailored Exemption Must Be Conditioned on MeaningfulDisclosure.// Social Networks andSecurities Law. North Carolina LawReview. Retrieved from; []

Kelly, K. (1997). //New Rules for the New Economy: Twelve Dependable Principles for Thriving in a Turbulent World//. // Wired //. (September) Retrieved from; []**. **

<span style="font-family: 'liberation serif',serif;">Lehner, O., (2013). //Crowdfundingsocial ventures: a model and Research Agenda.// Venture Capital: An International Journal ofEntrepreneurial Finance. Routledge,London, UK. Retrieved from; <span style="color: #0000ff; font-family: 'liberation serif',serif; font-size: 12pt; text-decoration: none;">[]

<span style="font-family: 'liberation serif',serif;">Leszczynski, A. (2012). //Situatingthe Geoweb in Political Economy//. Progress in Human Geography. University of Washington. USA. Retrieved from; <span style="color: #0000ff; font-family: 'liberation serif',serif; font-size: 12pt; text-decoration: none;">[] Patel2012Patel, S. (2012). //Connecting Passionate Supporters with Passionate Innovators.// JETLaw, Vanderbilt Journal of Entertainment & Technology Law. (web) Accessed on 1/7/2013 Retrieved from; []

Sorensen, I.E., (2012). //Crowdsourcing and outsourcing: the impact of online funding andistribution on the documentary film industry in the UK.// Media, Culture and Society. Sage Pub, UK.Retrieved from; []

__**Theresa's References**__

<span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;"> Eli Gimmon & Shimon Spiro (2013): Social and Commercial Ventures: A Comparative Analysis of Sustainability, <span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;"> Journal of Social Entrepreneurship, DOI:10.1080/19420676.2013.777359

<span style="font-family: Calibri,sans-serif; font-size: 11pt;"> Hanley, D. F., & Bork, P. (2012). Crowdfunding: A New Way to Raise Capital, or a Cut-Back in Investor <span style="font-family: Calibri,sans-serif; font-size: 11pt;"> Protection?. Insights: The Corporate & Securities Law Advisor, 26(6), 44-49.

<span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;"> Luzar, C. (2013). Pretail: This is your economy on crowdfunding. Retrieved from <span style="color: windowtext; font-family: Calibri,sans-serif;"> []

<span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;">Peoples, G. (2013). Crowd-funded venture capitalism? //Billboard, 125//(9), 9. Retrieved from [] -

<span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;"> Saxton, G. D., Oh, O., & Kishore, R. (2013). Rules of Crowdsourcing: Models, Issues, and Systems of Control. <span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;"> //Information Systems Management//, //30//(1), 2–20. doi:10.1080/10580530.2013.739883

<span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;"> Schrage, M. (2013). Why your Company should Use the Kickstarter Model. Harvard Business Review Magazine. <span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;"> Retrieved from: []

<span style="color: windowtext; font-family: Calibri,sans-serif; font-size: 11pt;">The new thundering herd; raising capital online. (2012, Jun 16). //The Economist, 403//, 71-72. Retrieved from http://search.proquest.com/docview/1020871150?accountid=10382

<span style="font-family: Calibri,sans-serif; font-size: 11pt;"> Neeley, P., WARNICA, R., LORINC, J., CASTALDO, J., McCULLOUGH, M., NOWAK, P., & ... SHUFELT, T. (2013). 35 <span style="font-family: Calibri,sans-serif; font-size: 11pt;"> RADICAL IDEAS TO KICK-START CANADA'S ECONOMY. Canadian Business, 86(5), 36-62.

Matol, F.R. (2013, June 20). Tweet retrieved from http://www.twitlonger.com/show/n_1rku0ov
 * <span style="font-family: Calibri,sans-serif; font-size: 11pt;"> Volker's References **

McCarthy, R. (2008, July 1). The Get Ahead Guide: Perry Chen Thinks His Website Could Be as Big as YouTube [blog post]. Retrieved from http://www.inc.com/magazine/20080701/the-get-ahead-guide-perry-chen-website-could-be-youtube.html

Kickstarter Blog (2013, June 21). We Were Wrong [Blog Post]. Retrieved from http://www.kickstarter.com/blog/we-were-wrong.

Lagorio, C. (2010, May 19). How to use Kickstarter to Launch a Business (INC.) [Blog Post]. Retrieved from http://www.inc.com/guides/2010/04/using-kickstarter-for-business.html

 Forrest, B. (2009, May 28). Ignite NYC IV & The First Ignite Film Festival This Monday [blog post]. Retrieved from http://radar.oreilly.com/2009/05/ignite-nyc-iv-the-first-ignite.html


 * Jelena's References: **

Bayus,L.V & Kuppuswaymy, B. (2013). Crowdfunding Creative Ideas: The Dynamics of Project Backers In Kickstarter. Retrieved from __[]__

Berman, S. (2002). //Ten strategies for survival in the attention economy.// IBM Institute for Business Value. Retrieved from http://www-07.ibm.com/services/pdf/ten_strategies.pdf

Chafkin, M. (2013). True to It’s Roots: Why Kickstarter Won’t Sell. Fast Company. (March) Retrieved from; @http://www.fastcompany.com/3006694/where-are-they-now/true-to-its-roots-why-kickstarter-wont-sell

Davenport, T. H., & Beck, J. C. (2001). //The attention economy: Understanding the new currency of business//. Boston, MA: Harvard Business Press. Retrieved from __[]__

Geigner, T. (2013). The Value of Kickstarter: Connecting with Fans on-the-Fly. Retrieved from __[|http://www.techdirt.com/blog/casestudies/?company=kickstarte]__

Goldhaber, M.H. (1997). The Attention Economy and the Net. //First Monday//. 2 (4-7), April. Retrieved from: [|http://firstmonday.org/htbin/cgiwrap/bin/ojs/index.php/fm/article/viewArticle/519/440]

Gorshkov, (2011). Crowdfunding: a concept beyond finance. Retrieved from __[]__

Iskold, A. (2007). The Attention Economy: An Overview. (edited by Richard MacManus). Retrieved from __[]__

Knight, Z. (2012, August 24). A 'too polished' Kickstarer Video Is Not Suitable For Connecting With Fans. (Blog Post).Retrieved from: http://www.techdirt.com/blog/casestudies/articles/20120823/12152520139/too-polished-kickstarter-video-is-no-substitute-connecting-with-fans.shtml

Lagorio, C. (2010, May 19). How to use Kickstarter to Launch a Business (INC.) [Blog Post]. Retrieved from http://www.inc.com/guides/2010/04/using-kickstarter-for-business.html


 * Andrea's References**


 * <span style="font-family: 'Calibri','sans-serif';">C **<span style="font-family: Arial,Helvetica,sans-serif;">hircu, A. N., & Kauffman, R. J. (2001). Digital Intermediation in Electronic Commerce: The eBay Model. In S. Barnes & B. Hunt (Eds.), E-commerce and V-business (pp. 45-66). Available from [|eReserve.]

<span style="font-family: Arial,Helvetica,sans-serif;">Flew, T. (2008). The Global Knowledge Economy. In New Media: An Introduction (3rd ed., pp.193-217). New York: Oxford. [|http://edocs.library.curtin.edu.au/eres_display.cgi?url=dc60264108.pdf&copyright=1]

<span style="font-family: Arial,Helvetica,sans-serif;">Kickstarter []