From coolers to potato salads, pet projects of all kinds are increasingly being financed via crowdfunding. Crowdfunding sites raised approximately 5.1 billion dollars in 2013, almost double the amount raised in 2012.
Along the way, "crowdfunding" has become a popular buzzword, but it's one that James Beshara, a crowdfunding veteran, now wants to avoid. So much so, in fact, that he is renaming his company: as reported by TechCrunch, CrowdTilt is about to become, simply, Tilt.
The name change reflects what Beshara calls "a broader vision" for this form of financing. He claims that in two to three years, the term crowdfunding will become outdated. While Beshara believes that people are only just beginning to use online platforms to raise money, the term crowdfunding "limits the scope of how big this space will be."
Not a crowd so much as a community
Beshara got his first taste of crowdfunding shortly after finishing school in 2008. While in Cape Town, South Africa working on international development projects, Beshara wanted to find a way to collect money though group-funded loans online, so he launched a microfinancing site called dvelo.org. Although the site ultimately failed, Beshara learned an important lesson. "I thought, wow, this ability to collaborate on how we spend our money is going to be the next big arena of the web."
Flash forward to 2011 and Beshara was still trying to figure out a way to pool money online. He continued to toy around with the idea of crowdfunding, and while testing out various platforms he was surprised to find that his friends were the most receptive to the idea. After getting requests to use his site for everything from fantasy football leagues to party buses, Beshara decided to target smaller groups where members already knew each other, and Crowdtilt was born.
Soon Beshara noticed that this community component was the common thread among Crowdilt's campaigns, whether a campaign raised $150 or more than $100,000. In fact, at $1,650, the average campaign was about what a neighborhood or a group of friends might be expected to raise if they had an easy way to do it. "It wasn’t so much about getting funds from disparate, disconnected groups of people. It was a tool to allow for collective action for whatever the community wants to bring to life," says Beshara. "I don't even think about it as a crowd."
Beshara began to feel that the term "crowdfunding" was alienating, because it seemed to imply that a campaign needed to attract a large number of people in order to succeed. By 2013 he decided it was time for a name change. He was eager to distance the company from the traditional definition of crowdfunding and highlight Tilt's community focus. But not everyone on his team was convinced.
"It’s scary at first blush, and I think the jury’s still out as to whether it's the right move, but once we decided to make the move, it felt more and more natural," says Beshara. "Two years in is nothing if you really want to build a company over 30 years."
Beshara predicts penty of evolution in the space over the next three decades. Some of it is already happening, thanks in part to Tilt users. This year, Tilt launched Open, a platform that allows groups to run customizable crowdfunding campaigns on their websites. Based on the initial success of Open--it has powered three of Tilt's largest campaigns to date--Beshara believes that more customizable crowdfunding tools are in store.
Take college apparrel provider Chubbies, for instance. The company used Tilt's Open platform to launch ChubbiesLabs, a crowdsourced design lab. Chubbies debuts and takes orders for wacky or creative shorts on the site, but will not start production until a certain number of orders are placed. This allows it to gauge demand without wasting manufacturing resources.
For Beshara, Chubbies is just the beginning--he sees large corporations ranging from Nike to British Airways using crowdfunding-type platforms to see what types of products customers are willing to pay for. "Over the next four to five years, companies are going to want more than just to converse with customers, they will want to collaborate with them," says Beshara.
At the other end of the spectrum, Beshara also believes that crowd-financing will become more accesible to the average person. "I think in the next two to three years we will see the 'Twitter of crowdfunding,' something that allows people to pool two or three thousand dollars--something that is mobile-focused, bite-sized, and built for crowdfunding on-the-go."
As for the word "crowdfunding" itself, Tilt doesn't plan to completely axe its use of the word; for now, it's still a useful way to describe what the company does. But Beshara believes that term will eventually fall out of favor as crowdsourcing techniques become so integrated into everyday life that people won't even think that they are crowdfunding. "It will become one of those terms like 'e-commerce'," he says. "When you buy something on Amazon, you're not thinking about participating in e-commerce. It's just how you buy it."
While Beshara is confident that crowdfunding will evolve, he admits that, "the uncertainty we have is if we will be the ones to power it." It remains to be seen whether "Tilt" is a prescient renaming, or an ironic one.