Thursday, September 27, 2007

Crowdfunding software projects

When it comes to software development, history has shown that niche
products can often lead to profitable new markets. The challenge, of
course, is discovering that the niche is there. microPledge uses the power of crowdfunding to uncover untapped demand and, in the words of its founders, "get software made."

The idea is simple. Anyone with an idea for useful software can
submit it on the site. Others who like it can then pledge money to help
see the vision realized. Developers browsing the site can submit quotes
for creating the software; the one with the best quote after two weeks
is chosen for the job. Those who pledged, meanwhile, get to have a say
in how the product takes form. The New Zealand-based site was launched
in August by three business-minded brothers. They explain: "Being
people with plenty of ideas, we kept wanting to start projects—the kind
we knew people would find interesting. If we could only get people to
pledge to support them ... Then one day it dawned on us that we had to
run the service ourselves."

microPledge currently focuses on open source projects, for which it
receives no payment, but ultimately it plans to diversify to include a
variety of commercial projects and to charge a portion of the funds
pledged. The site also offers a USD 20 "incubator" service to help
protect innovators' ideas. About 160 users and 75 projects have
populated the site so far, and its founders are interested in mutually
beneficial partnerships to help it grow.

In addition to a marketplace for software development, microPledge
reckons its site will come to be viewed as a free market-testing
service to gauge the reception for new software products and features.
Interesting example of the intention economy at work: when consumers
have to put their money where their mouth is, it's a pretty good bet
you can believe what they say. Time to consider how micro-pledging
could be applied to your industry. If not to raise funds, then at least
to find out what your customers really want.

Article link

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