Worldview: Crowdfunding and risk

I’m a big fan of crowdfunding, that idea put forward by websites like Kickstarter and Indiegogo that allows people with ideas to connect with groups of people interested in their idea to help fund it. I’ve helped fund a few ideas myself.

Recently, I’ve been reading a lot about crowdfunding initiatives that have failed and the various amounts of ire felt by the people who helped fund those initiatives. Most of these articles leave me shaking my head.

What it seems that most people who engage in crowdfunding fail to realize is that it is simply another form of venture capitalism, one with usually lower dollar amounts and with the risk distributed among far more people. Venture capitalists will tell you that such initiatives are fraught with risk and that many, if not most, of them fail at their initial premise even if they eventually go on to succeed.

Crowdfunding is not some kind of magic elixir for success for ideas the Man won’t fund. Instead, it is venture capitalism for the masses, a mechanism to bring ideas forward that would not otherwise have a chance for all sorts of other reasons, usually profit margin.

In realizing that crowdfunding is venture capitalism, crowdfunders should realize there is going to be risk. A lot of it. Not a small number of projects are going to fail. Even after they are funded. Sometimes even after the product has been produced. There will be all kinds of reasons for these failures. They can’t be helped. They can’t be stopped.

And none of these things should stop dedicated crowdfunders from continuing to crowdfund. I know, for me, realization of this risk has made be a particularly discerning funder. I watch a lot of projects for a long time before I commit, and there have been more than a few successful projects I decided not to invest in because I was not sure. There have been some projects that I have invested in only to have them fail. That’s how the system works.

But, beneath all of those ideas, is the critical idea that makes crowdfunding worth it: giving life to ideas that might not otherwise succeed even though they are worthwhile simply because they will never make enough money to become a larger venture. Crowdfunding bypasses the court of the big venture capitalists and gives the little guys a chance.

Risk and all, that’s a venture worth supporting.

DLH

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Worldview: The razor’s edge

Last January, I started an experiment to see how many times I could use a single disposable razor blade before it was unusable. I discovered several years ago that the thing most likely to cause the blade to become dull was the moisture, oils, and salts left over from the shaving process instead of regular use. Critical to this experiment was the fact that I dried the blade after each shave and stored the blade face down on a tissue to wick away residual moisture.

A year later, I can report that I used the same blade to shave 85 times over twelve months, an average of 7 shaves per month. Granted, I do not shave everyday as some people do, but using this evidence, this blade would have lasted a daily shaver as many as 12 weeks. For a daily shaver, this would be a savings of around $50 over 12 weeks if you used the blades I use and replaced them weekly, or about $215 per year.

Further, even after 85 shaves, the blade I am using now is still usable and probably will be for some time to come. I expect that I may get as many as six more months before it has to be replaced, and it could last another year with proper care.

Now, I grant that I do not shave everyday, so daily shavers may get less performance, but the evidence so far is clear: it is possible to save hundreds of dollars a year on replacing razor blades by simply drying them before you put them away.

Why go to all this trouble to prove something like this? Because I believe frugality is one of the ways we are going to dig ourselves out of the mess we face as individuals and as a nation in the years ahead. I believe spending less, saving more, throwing less away, and reusing whatever we can are critical parts of making our way of life better.

Do you have other frugality tips? Let me know, and I will post them here.

DLH

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Worldview: Does the desire of the individual matter in the era of the mob-mind state?

Once upon a time, there was a nation founded on the principle of individual liberty. With the exception of a few rules, people were free to do whatever they pleased, and they did. They filled a continent, built a promise so attractive that everyone else around the world longed to go there, and eventually conquered every imaginable distance from traveling coast to coast to traveling to the moon by the force of their collective will.

And all of this happened, arguably, because every person–granted some later than others–had the chance to be whatever he wanted to be. The limit wasn’t the sky, it was the imagination.

What happened to that nation?

Some would say that some of the people realized that they could use their collective will to take from other people’s labor, thereby not having to work so hard themselves; however, I say that it was not so much a question of labor but a question of failed imagination. Some element of society came to resent those who still showed that original spark that made that nation into what it was, and instead of finding their own spark, they decided to take it from those who still had it.

So, now there is a question: does the desire of the individual matter in an era when some people will simply take what that desire might produce? Is there any room for individual liberty in the will of the mob?

Too many people will scoff at that question and will discount it with cries of “What about all the poor and suffering?” and “Well, if they succeed, then they should have to share!”, never realizing that by taking those positions they are saying “Quit trying.” and “Do what you want, but we’ll take that too.”

And then they wonder why people quit trying and there is nothing left to take.

This is how nations end.

DLH

Read more at my Worldview site...