The first internet revolution in the 1990s saw the emergence of on-line service providers who offered the same service as off-line competitors, but cut costs. Big winners included Amazon and LastMinute.com.
But the second, and arguably bigger, internet revolution in the 2000’s was the emergence of social networks, with Facebook, LinkedIn and Twitter in the vanguard. These surprisingly simple tools – Facebook is little more than a village noticeboard with millions, rather than dozens, of potential contributors – unlocked the power of the crowd.
Crowds can do some amazing things. Whether you need to find someone extra smart, or aggregate thousands of tiny contributions to create something huge, virtual crowds organized through social networks have made possible what was previously unthinkable.
And the next target for crowds seems to be funding businesses – and most recently even academic science.
In principle, it sounds like a great idea: a small, almost invisible, contribution from enough people can together deliver enough resources to change the world. Platforms, like Microryza, are springing up like mushrooms to harness these ‘donations’ and channel them to deserving causes. “Crowdfunding” is on everybody’s lips.
The key difference with crowdfunding lies in the distributed decision-making capacity, rather than just distributing the cost
Can crowdfunding really shake the foundations of current financing models for biotech companies and for academic science? Or will it remain a niche opportunity dwarfed by conventional funding mechanisms?
DrugBaron predicts that initial excitement and expansion in the sector may rapidly be followed by disappointment and contraction – unless a solution can be found to the quality control issue when the funders cannot be expected to understand the details of the projects they are being asked to fund.
After all, existing public funding of academic science is nothing but “crowdfunding”. Can social networks really do a better job of distributing our communal investment in research than research councils or even venture capitalists? Crowds can do amazing things, but crowdfunding biotech business or academic research might be a step too far.