I’ve been on calls and video shoots with three new projects we’ll be posting in January. One of the questions that comes up is how much money to ask for. We usually recommend a couple of things to think about:
Our sweet spot is a range between $3000 and $15000
Generally we recommend asking for the lesser amount- it is entirely possible to raise more than you ask for
Decide how you are going to use the money and be specific: A prototype, more research, an early production run, a next generation version, etc.
You can explain how you’d spend additional money if you get it: With $3000 we can take our current version and upgrade it to use cheaper parts. If we raise $6000 we’ll do that and build a test production run of twenty gizmos made for testing.
It’s easier to raise money if you show the potential supporter that their contribution is going to result in measurable progress towards a usable product, service or device, etc.
These days the ability to make things at lower cost is a reality. Innovations like rapid prototyping, 3D printers, agile software development, minimal viable product, cloud access to tools and other often free resources mean you can change the world for a few dollars.
We realized fairly early on that the Innovocracy business model was not going to be ‘help academic innovators raise funding and take a cut‘. It wasn’t viable and we feel strongly that as much of the funds raised as possible should go directly to the innovator. This is a key unique factor for the Innovocracy model in academia where very often a portion of all funding goes to the university for overhead. In our platform all funds raised, excepting credit card processing fees (which do not go to us), end up being used for actual innovation.
So what was the model? After all, this thing needs money to grow. What we did realize early on is that we are building a network. Each time a university joins us that network is expanded by hundreds of thousands of potential supporters and thousands of potential innovators: Students, faculty, administrators, alumni, employees, parents and friends. Each university member expands the network by that much potential. This is the lever that moves innovation in academia. Innovocracy is a peer network.
Wikipedia is a peer network. Facebook is its own kind of peer network, actually a network of networks. How important is this? Take a look at this video promoting a new book on the subject. It gives a very clear explanation of just how important this phenomenon is already.
25 New Control Arms Ready For Final Assembly by MonoMano
Innovocracy’s second funded project from the University of Rochester has used their funds to build 25 improved models of their handlebar control arm designed to enable those with the use of one arm to ride a recumbent bike. MonoMano is a business now and though its five founders are headed for grad school they are continuing to refine their designs, take them to market and work on new projects. Here’s Amy Lerner’s update:
“The MonoMano team has made excellent progress during the last few months, showing great momentum towards the launch of their product. The team has focused their expenditures on purchasing the materials and components necessary to assemble the first 25 products to be delivered – modified handlebars compatible with the identified models of the tricycle. They have also identified a potential manufacturer for some of the components and investigated appropriate insurance necessary before delivery of the product to customers. A company web page is in place and procedures for marketing are under development. The team has begun establishing a board of directors and advisors and has done a remarkable job proceeding with a team dispersed around the country.
The breakdown for anticipated expenses (including approximately $1750 already spent) is as follows:
Components, bicycle parts, packaging: ~$2000 (most already spent)
Liability Insurance: ~$1000 (in October)
Tricycle (for testing and verification of manufacturing): ~$1000 (in October or November)
Outsourced Manufacturing (vendor identified) ~$2000 (in November)
… We are all very grateful for your support in launching this exciting company whose product will serve the needs of a unique and deserving group!”
Here at Innovocracy we’ve been closely watching the evolution of crowdfunding as we’ve evolved our platform and network. Initially, inspired by Kickstarter, we simply saw an application for this new donor-funding model in academic research. As we began working with universities and innovators in higher education, our perception of the entire process and our business model have moved from a specialized funding platform to the realization that we are building a unique network, a network created to intensify the commercialization of campus research. As a result, we increasingly find that the term ‘crowdfunding’ only covers a single aspect of what we’re working on.
Networks Are Social
Each university or university system is a vast network comprised of students, graduate students, faculty, researchers, administrators, alumni and peers around the globe. Add in financial supporters and the citizens of the area(s) where the university is located and you have an extensive network of people, from all walks of life, with common connections.
The Innovocracy Network takes this already enormous group of connected people and multiplies it each time we add a university to our membership. This means that the addressable market for any Innovator seeking to raise funding via our website is potentially in the millions without even going outside of the academic universe. Add in the friends and family, co-workers and neighbors of anyone using the system and you are potentially tapping into vast resources, even if individual donations are tiny ($5, $1? $1000? All are welcome.)
Just as social networks like Facebook, Twitter and LinkedIn have leveraged these social connections, Innovocracy is also seeking to be a central social funding platform. But that is just one piece of why we prefer the term ‘social funding’.
Social = Beneficial To Society
The types of Projects we support are those that combine commercial potential with a benefit to society. Even with just a few completed Projects under our belt we’re seeing solutions for parents with autistic children, for people who’ve lost the use of a limb and people with vision problems. And we have projects related to energy, green technology and environmental issues in the wings. These are inherently social innovations.
Donors Donate Because of Social Connections To A Project
Social funding is predicated on the concept that we are willing donate money to support a cause with a personal or social connection to our lives, without an immediate benefit to ourselves. All of the projects mentioned above have avid constituencies of potential supporters who contribute for the better good. Innovocracy is working to tie these various social aspects of both our funding model and our network to make it easy for donors to make a difference, for innovators to get to the next level and for our university partners to accelerate the pace of invention coming out of their research programs.
That’s social funding as we define it.
Bob Dole’s 89th birthday on Sunday got me thinking about the significance of the Bayh-Dole Act of 1980 and the history (and future) of university-based innovation commercialization. My first job after law school was working as an aide to the Director of Policy of Bob Dole’s 1996 presidential campaign. It was in that position that I first heard about Bayh-Dole and the simple idea behind it: give universities, rather than the federal government, the intellectual property and commercialization rights that result from federal research funding.
The impact of this bipartisan legislation has been transformative for American innovation and economic progress over the three decades since its passage. At the time Bayh-Dole was enacted, the US government held over 28,000 patents, with less than 5% of those ever getting commercialized. Since then many thousands of new products and companies have been created based on university research, including numerous critical healthcare advances such as synthetic penicillin, the hepatitis B vaccine, and key therapies for cancer and Crohn’s disease.
By one estimate, 30% of the value of the NASDAQ stock market is rooted in federally-funded university research, and the Economist has written that Bayh-Dole was “[p]ossibly the most inspired piece of legislation to be enacted in America over the past half-century,” and that it “[m]ore than anything…helped reverse America’s precipitous slide into industrial irrelevance.”
Yet as much as Bayh-Dole can be credited with tremendously accelerating the commercialization of university-developed innovations, many studies have also demonstrated that this commercialization can still be done much more optimally. In particular, while tens of billions in federal funding is spent on university research, there are comparatively few resources available for building prototypes or conducting proof-of-concept activities to translate university research into potentially commercialization-ready inventions.
The dearth of this so-called “gap funding” has become a critical bottleneck in research commercialization. And at Innovocracy, we are working with universities and inventors to see if the new simple idea of our time – the power that can be achieved from harnessing the wisdom and resources of a “crowd” – can help ameliorate this significant shortcoming.
In some ways you can think of what we do as providing a platform for micro-gapfunding, which enables each one of us to play a role in bringing into existence the university-originating technologies and solutions that we believe would be most useful to society. We hope this may be another example of a simple concept having a historic and life-enhancing impact, and we look forward to working with all of you to turn this vision into a reality.