Introduction

=Internet Commerce & Kickstarter = toc

Team 5 Net205 will examine and demonstrate their understanding of the principles and practices of Internet Commerce. This Wikispace is used to showcase and analyse the Internet Commerce and Business Model, Network Economy and Attention Economy used by Kickstarter, the “world’s largest” crowdfunding platform, while analysing the question //What is the fundamental economic basis of Internet Commerce? //

Internet facilitated electronic commerce (eCommerce) has enabled opportunities for businesses to move to an online environment. Technology has changed the way business is conducted and promoted. Innovation, networking and attention seeking is the key to successful eCommerce. New ideas, new ways of connecting and communicating are emerging and eCommerce is no exception to the innovation seen by the homogenization of the internet into our daily lives. eComerce, digital intermediation and reintermediation, the process of internet facilitated financial transactions, has disrupted traditional business practices (Flew 2008, Chircu & Kaufmann 2001), often eliminating the need for wholesalers, distributors and retailers. Innovative platforms such as Kickstarter, crowdsourcing funding via networks, 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 & Kaufmann, 2001). The fundamental economic basis of successful internet commerce is social networks, communication and innovation.

What is Crowdfunding?
Crowdfunding is a creative way of “using small amounts of money from a lot of people to fund something” (Ghanizada, 2013). Mollick (2013, p.12) suggests that crowdfunding is novel and potentially disrupts the traditional approaches to funding. Modelled on a rewards based market, funders support projects, often with relatively small amounts of money, across large geographical spaces, often pre purchasing a product or being offered an ‘enchanced experience’ for example – e.g. a copy of a CD, a concert ticket, an individually signed Thank You, or a signed copy of a book (Belleflamme et al., 2013). Crowdfunding is “an innovative and creative way to get consumers more involved in the development process of a new product or service, but one that asks them to pay for it” (Mollick, 2013)

Crowdfunding with Kickstarter
Kickstarter uses a person's wider network of friends, family and fans, who are willing to contribute to the development of a great idea. It is a community philanthropic approach to project funding. (More...) As the largest crowdfunding platform, Kickstarter’s success boasts:



Some of the successful crowdfunding projects that have exceeded target are highlighted in this video:

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To further deepen the understanding of e-commerce, the following topics will be discussed in relation to Kickstarter:

Internet Commerce Models
Internet Commerce models are in stark contrast to traditional commerce models, using low cost social media technology and embracing entrepreneurial culture within the community and networks. This section compares traditional and internet commerce models, the Kickstarter crowdfunding business model and the long tail effect. (More...)

The Network Economy
The Network Economy overcomes the limitations of the physical world. Web technologies support democratic and participatory interaction. Using Kickstarter as a case study, this section looks at the key features of the networked economy's community, entrepreneurial and political aspects. (More...)

The Attention Economy
The phrase 'Attention Economy' was first coined in 1971, identifying attention as a scarce and most important driving force in new economy. Since 1971 the amount of information that bombards those who use the Web has increased dramatically. Online retailers must provide customers with targeted content and services, to break through the noise caused by the mass of freely available information, and to attract their customer's attention. We are moving towards an entirely new era, different from traditional factory mass production. (More...)