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Andrea Ordanini takes an interesting look at “crowd funding” in the latest edition of Business Insight.
What’s crowd funding? It’s the emerging practice of consumers investing small amounts of money (as little as $1) in products they fancy by musicians or fashion designers. It’s yet another form of community activity facilitated by the Internet.
However, don’t expect an explosion of consumer-funded start-up businesses.
Ordanini notes that the “crowd funding” process “works best with products for which customers feel a strong personal attachment — products like music and designer goods. Without that bond, customers are unlikely to support a product beyond simply buying it.”