Crowdfunding as the trojan horse of the commons

De Estigmergia

Post published the 21/07/2011 in the P2P Foundation's blog (translation by Chris Pinchen)

Plastic coins used for simulating offline crowdfunding during the Goteo workshop
Crowdfunding implies a whole new paradigm of the network and Internet possibilities to create new socioeconomic models. Summarizing its recent history, it appeared first as sporadic cases (between the nineties and the new century) with calls for financial support from music band fans and promoters of films, and it began to replicate in a little over two years with more and more platforms. They bring together many ideas, projects and initiatives of third parties, gradually adding small economic amounts given by the maximum possible users, and allow to raise enough money for initiatives to take place.

Normally in return for a proportional reward (a sticker, a shirt, being credited, or have signed an extended version of the product, etc), the author proposes a range of amounts already prefixed with which you can help, which facilitates the transaction. Some of the promoters of these projects get the capital they need and many others don’t, which makes it a kind of natural selection of talent and ability to empathize in order to attract attention (and money, ultimately) from Internet users eager to bet on ideas and individual rewards they like.

It is a phenomenon so new yet to translate the term in Spanish or Catalan is not trivial. Here we refer to it as crowdfunding often, but at a certain time we will talk about mass financing (with the connotations that the term implies, when the mass is often not the best or most intelligent or effective in the long run) to refer to the phenomenon as collective financing, that we believe connotes values of sharing, coordination and care, which should have a role in what can be achieved that through this funding. But let’s go step by step...

Recently it can be observed that crowdfunding is expanding the network, and today there are many examples of such platforms in operation, both internationally and from Spain. Each has its idiosyncrasies and peculiarities in the approach, but broadly the canon of conceptual and functional design is usually the same: (a) economic quantities preset and scaled in exchange for individual preset reward, (b) a financial object that if it not reached on time it does not activate any of the transactions, and (c) trust as an engine of the agreement (whereby the driving force behind the project will carry out the work promised, and will also get the rewards set to each of the people who helped finance it).

Obviously, the risk of saturation due to the competition between platforms of projects, in this ferocious attention economy that Internet is, would point to the possibility of another kind of natural selection at the -let’s say- “top layer” (at the platforms themselves). Something parallel to the capabilities that many initiatives can be taking now to turn independently from their own website, mechanisms to raise funds under the same operation and philosophy (without an agglutinating platform).

Does it make sense in this scenario, therefore, to propose a new crowdfunding tool? From Platoniq we think so. For the reasons set out below and especially the ability to not explored yet, to articulate some variation on the formula for crowdfunding we have been discussing since the beginning of the phenomenon. To use it through a tool that we call Goteo, with a very specific purpose and context in defending and strengthening the commons.

The (threatened) scope of the commons

Let’s take a quick look to contextualize what is that the commons (jump the following two paragraphs if you believe you know about it already). At the risk of simplifying or losing nuances along the way, we can understand it as any common and shared goods that can be enjoyed by all the people who form a society, without any access restrictions, and in whose care and protection should participate also the maximum number of people, so it can be bequeathed to future generations in similar conditions.

It’s not new, but goes back to the origins of civilization and the use of natural resources. It is also the knowledge and culture generated in a particular way, allowing free access and replication. And for a while now it has been extended to the areas of Internet and ICT, e.g. the case of free software.

Therefore one can refer to things such as a park, a literary work or a determined computer program. And about the conditions under which they can freely recombine to create new things, processes and opportunities, innovating and openly helping to the progress of society. These conditions may allow the original author to be acknowledged, paid for their work and even for his/her creation to reach more people, and for that reason they are a guarantee of regulation but also expansion of the commons.

However, the increased commercialization, exploitation and neglect around the commons that we have inherited or generated as a society put them in danger now, as explained by Antonio Lafuente, and it is the reason we usually remember them. Therefore, we believe, along with many other people, it is important to promote and reinforce to actively (re) discover the commons in the possibilities of Internet and the digital sphere but also in the use of new places where we live and work. Or in the vast world of education, in which innovation is urgent. Or in new modes of production and distribution of organic food and the preservation of the environment in general. Or in the creation of open hardware products that are easy to replicate, to name a few of the many areas to be explored.

Research applied to co-design with users

There have been two ways to design the Goteo tool and modify it under the social context in which it is immersed: trying to contrast it with the evolution of mass funding on the Internet, on the one hand, and on the other expectations and perceptions of network users. Of people who ultimately give time and money to do their bit for a project they would like to go from being an idea to being real.

We first started in late 2009 a research project of what was still an emerging trend by analyzing the similarities and differences between the first platforms and mechanisms of crowdfunding that had emerged so far. We also looked for connections to other digital and offline phenomena, such as crowdsourcing and peer-to-peer, and charity microcredits and processes of participation and socialization in a broad sense. And we approached meaningful experiences such as Flattr micropayment, initiatives to support web projects such as Mozilla, or the distributed economy related to open hardware.

In parallel, when we reached a point of sufficient knowledge about that environment, we designed the workshop “Goteo, culture of collective financing” that we have been giving since December 2010 around several Spanish cities.

Through this workshop we try to understand what decisions different types of people take and move their reasons: the weight of certain information of the projects seeking funding, the rewards they promise, or the results they aspire to. Also factors related to how to communicate and the type of relationship that can be established between all players in the system, so that the conceptual paradigm of crowdfunding also approached social networking or free software forges.

It should be noted that in this activity participated, playing the role of co-financiers, from visual artists and computer programmers to entrepreneurs in a broad sense of the word, to representatives of public institutions (linked to performing arts, museums, education or the world of business), or people from universities, who have been able to discover and share common approaches to understand how do mechanisms of crowdfunding work, and how to redefine them. For example the great weight that has the originality of the proposal compared to other factors such as the promised rewards. Or the emerging interest in the impact social projects that can achieve once made, and how the determining value when co-financing an initiative involves knowing the previous experience of the person or the team that drives it.

We set up the goal of creating a platform to incorporate other logics of collaboration and we established a methodology based on prototyping and testing conceptual processes. Not so much to help to identify features that should be present at the tool as information architecture and usability, also, but to compare closely and share perceptions and criteria of the users when involved in a truly collective funding process . This process also began to create a network with the support of organizations like the Gabinete de Iniciativa Joven, the Centro de Cultura Contemporánea de Barcelona, and it should be noted that it involved working closely with Colaborabora as well as the experts in solidarity with the commons such as Arantxa Mendiharat, Cristina Riera, Jordi Planas, Anto Recio or Jorge Campanillas.

The results of the experimental and classroom dynamics have led, in turn, into a kind of workshop that allows a better understanding of funding processes and adopt them, using symbolic amounts of money that are allocated through a process of collective analysis of real projects. Because of these dynamics the platform Goteo has been created with the characteristics as detailed below, while generating knowledge from a fledgling network of contacts around this phenomenon and its relationship to the commons.

Recombining the logics of crowdfunding

This has led us to ask how to operate crowdfunding in relation to what we mentioned at the beginning: as something closer to the sensitivity and collective commitment to funding, not just the sporadic and often without guarantees of what is considered massive. Therefore, the characteristics of Goteo combine to obey the shared goal that is to strengthen the commons, trying to harmonize form and substance to achieve it in a coherent and effective way.

How is it possible to grow in an ecosystem so competitive in the global spotlight, with so many crowdfunding platforms aiming to raise funds for the users? Specializing in one specific aim: Goteo is directed exclusively to finance projects that offer some kind of collective return. They have to be regulated wholly or partially through copyleft licenses such as [ Creative Commons] or similar, and therefore can be learned about how they have been made and even remix them, and then incorporate them into a different product or process.

How to ensure that the driving force behind a project is achieved, and that its relationship with co-financing may be tighter? Structuring the process in two phases: Goteo involves a first round of funding, similar to those normally set, but only to achieve the minimum capital required to start the project. Once received, if it has reached that initial objective, the creator has another term to initiate the work while reporting its progress to encourage more funding.

How can you go beyond economics to help a project? By expanding the type of support you can get: Goteo offers the option of applying parallel predetermined amounts of funding through specific skills that a project needs of others (translators, testers, recommenders). The tool also provides resources (transport, equipment) and infrastructure (space, facilities), in order to establish closer relations than those of a mere economic transaction.

How can we combine small contributions and larger ones, through entities that also ensure the commons? Creating a social investment exchange: Goteo manages a fund open to contributions from public and private entities, through which they can enhance the financing of projects coordinated with the community and civil society, therefore achieving a multiplier effect.

How can one help the creators aim to contribute to the commons? Guiding and advising from the tool and its community: Goteo has an assistant in context that guides the process through the entire registration process, explaining the importance of the decisions you must take to achieve your goals. It also activates the advice, where necessary, of a community of experts and enthusiasts concerning specific themes.

How can the commons effectively extend and reinforce as a whole, beyond the digital sphere? Generating autonomous nodes of management and attraction: Goteo pursues that interest groups are placed in projects related to the commons, to manage the tool independently but coordinated with the rest, generating close communities that may impact in its context .

How can one apply the principles behind the tool to its own essence? Committing oneself to transparency and open layout: Goteo is a platform, but also a non-profit independent organization , legally established to ensure common goals with the highest possible guarantees. It is also completely free software. Anyone that wants to establish itself as a Goteo node can use the source code (from 2012) under the AGPL license. In this way we hope to add in a near future more programmers and generate more impact with new developments, while improving or extending Goteo and its commitment to the commons.

Viable commons wanted

At this point, the tool is already functioning in beta (with restricted access while finishing some pending design and content details, before finally opening in Spanish by mid-September). We use this post as a call for more ideas for projects initiated by people who want to work from and for the commons, to be part of the first phase of funding proposed by the Goteo collective.

We are looking for digital (or non digital) projects that are related to sustainability and / or ecology, education and learning, academic research, public space, new media, art and software, and specially projects that mix these areas (or better yet, if they surprise us because they come from very different areas). We are also interested in people and organizations that want to give them financial or human support when they open up from the platform to go, and form the pillars of this community that will grow throughout Goteo as explained above.

If it’s still is not clear enough, this is all about how from collective financing one can go beyond crowdfunding, helping the commons to grow. As a trojan installed on the logic of this flawed economic system that surrounds us, it can contribute to change from within.