Tanda is a Mexican example of a system of collectively funding large purchases or creating rotating credit associations. It originated in Puebla, Mexico around 1899, and is said to have been inspired by a similar system brought by Chinese immigrants. These systems exist in many cultures. The core principle behind the Tanda is that every week or month everyone in the Tanda contributes a set amount of money. Each time, that money is all given to one person in the Tanda. Each time it rotates. The Tanda is used to make large purchases that would otherwise require formal loans, use as see money to start businesses, or to pay for important infrastructural improvements for communities <www.anthro.uci.edu/html/Programs/Anthro_Money/Tandas.htm>.
An online success
When Apple announced that their new computers were switching to the Intel chipset, aficionados immediately speculated about whether these new computers would be able to run Windows. On January 22, 2006 OnMac.net put up a page to collectively raise a bounty for the first person to write a bootloader to solve the problem. If the problem wasn't solved, the money was to be donated to the EFF. Over ,000 was raised, on March 13 someone using the handle narf2006 posted the solution <forum.onmac.net/showthread.php?t=64>.
The effort was successful in that it not only achieved its goal of creating intense competition to accomplish an extremely challenging task that many people wanted accomplished, it also forced Apple three weeks later to release their still buggy, but much more stable version.
It is worth noting that almost all of the principles of collaboration had been followed: there was a clear goal and organization, everyone was properly attributed, the process was transparent, and the trust was maintained throughout. Even the names of the donors to the project are still upon the homepage, just as the project promised <www.everymac.com/articles/q&a/windows_on_mac/faq/xom-hack-for-running-windows-on-mac.html>.
An online failure
Fundable.com was launched in 2005, and promised to create a crowdfunding platform. Apparently many people were able to use it successfully, but many others had significant problems. These problems exploded when prominent author Mary Robinette Kowal had a terrible experience where Fundable held the donated money, neither disbursing it, nor refunding it to its original donors. This blew up on a BoingBoing.net post and, shortly thereafter, the company shut down.
The story behind the breakdown is the story of a failed collaboration. One side of the failure was detailed by one of the two partners on the Fundable.com homepage when he took it off-line October 1, 2009 <files.spontaneousderivation.com/fundable-capture/index.html>.
The details of who said what when, and who did what when, are fairly irrelevant, as the one-sided account is, well… one-sided. What is fundamentally clear is that the project failed because the collaboration between the two partners failed. There was a total breakdown in communication, trust, transparency, etc <www.maryrobinettekowal.com/journal/my-very-bad-experience-with-fundable-com/> <boingboing.net/2009/08/22/fundable-rips-off-hu.html>.
Kickstarter.com has taken up this concept of crowdfunding with what seems to be significant initial success. The premise is simple: an individual defines a project that needs funding, defines rewards for different levels of contribution, and sets a funding goal. If that pledges meet the funding goal, the money is collected from pledgers, distributed to the project creator, who uses the funding to make the project. If the project does not reach the funding goal by the deadline, no money is transferred. Most projects aim for between ,000 and ,000.
Kickstarter pledges are not donations, as most of the contributions are associated with tangible rewards, nor are they a form of micro-venture capital, as funders retain no equity in the funded project. While crowdfunding need not limited in topic, Kickstarter is focused almost exclusively on funding creative and community focused projects. Part of their goal is to create a lively community of makers who support each other. At the end of their first year, they gave out a number of awards including the project with the most contributors, the project that raised the most money, and the project that reached their goal the fastest, but the award that might be most telling is for the “Most Prolific Backer”:
“Jonas Landin, Kickstarter’s Most Prolific Backer, has pledged to an amazing 56 projects. What motivates him? “It feels really nice to be able to partially fund some one who has an idea they want to realize.”
One curious conundrum arose when Diaspora sought only to raise ,000 to develop an open source social networking platform ended their campaign with 0,642. <www.kickstarter.com/projects/196017994/diaspora-the-personally-controlled-do-it-all-distr> Their fundraiser came at the same time as a wave of Facebook privacy roll-backs, perfectly matching the simmering discontent with Facebook to their privacy focused project. This enormous success has created a high level of public scrutiny that has led to public complaints about a number of aspects of the project, including the openness of their development process. <identi.ca/conversation/32668503> Though this is not the place to discuss the relative merits of these process-based critiques, it is worth noting that this might be an example of too much of a good thing. The four collaborators only asked for ,000 to work on this project in lieu of a summer internship, but ended up with twenty times that amount. They also ended up bearing the weight of the hopes, desires, and scrutiny that came with that funding. The most successful FLOSS projects tend to be developed in obscurity; few, if any prior FLOSS project been developed in this kind of fishbowl. It is still to be seen if the success of Diaspora’s crowdfunding has set them up for expectations they cannot live up to, or if it has set the stage for the adoption of the platform they are creating.
Funding the New York Times Special Edition
As previously mentioned, a post dated knock-off of the New York Times was distributed by hundreds of volunteers. They printed a newspaper based on a wish list of news. As the motto states, they printed “All the news we hope to print”, a twist on the NY Time’s famous phrase “All the news that's fit to print”.
In order to fund the printing and distribution of the newspaper, the anonymous organizers came up with a campaign that emphasized the hope embodied in the newspapers’ mission and retained the projects anonymity. They sent out an open call to thousands of people to donate to a large secret project to build a better world, without a clear description of what was being proposed.
As vague as it sounds, people sent more than ten thousand dollars in small donations simply based on a simple idea of optimism and hope. This model was effective in motivating a base for change, and was tapping into desire for change that co-existed in the Obama election campaign.
But is Crowdfunding Collaboration?
Crowdfunding clearly works as a means for democratized patronage. Kickstarter and others may demonstrate that providing a platform for crowdfunding is a good business. One question is how far crowdfunding can scale in terms of size of projects supported and platform businesses required.
It seems unclear whether crowdfunding itself is collaboration. However, it seems that crowdfunding can abet collaboration in at least two respects. First, its efficient democratic patronage may result in more projects retaining the freedom to collaborate rather than being restrained by the boundaries of an institution or business that may not be permeable to outside collaborators. Second, crowdfunding could lead to increased engagement between putative creators and consumers in a way that changes, mixes, and makes collaborative both roles.