Corporate Crowdfunding

Off the Beat: Bruce Byfield's Blog

Jul 23, 2013 GMT
Bruce Byfield

Like many who write about free software, I spent yesterday writing about Ubuntu Edge, the effort to crowdfund a project to promote innovation in the phone market. The story had more than enough points of interest to keep me busy, but one aspect I didn't have time to examine in depth was the idea of a company attempting to crowdfund. In some ways, the attempt seems contrary to the whole idea of crowdfunding.

Make no mistake -- that is what Ubuntu Edge is about, despite the fact that the name includes Ubuntu rather than Canonical. Even though it's unclear whether Ubuntu Edge is intended to be even modestly profitable, the total absence of any mention of licensing suggests that Ubuntu Edge will be proprietary technology, not open hardware.

But even if Ubuntu Edge turns out to have a free license after all, Canonical will still be the corporation best positioned to take advantage of the project. If nothing else, Canonical will gain a reputation for innovation in a market where it currently doesn't even exist as a niche player. In effect, Canonical is asking others to fund its technical research.

Not that Canonical is doing anything illegal, let me hurry to stress. The fundraising campaign is being hosted by Indiegogo, and Indiegogo has no restrictions on who can raise money for what. By my count, Ubuntu Edge could not be hosted on KickStarter for at least three reasons (because it might include business apps and websites, because the campaign includes preorders of finished products, and because it makes unclear how far along the prototypes are), but on Indiegogo, none of these reasons are relevant.

Idealistic expectations and pragmatic reality
All the same, the campaign leaves something of a bad taste. Although dozens of exceptions are posted on both KickStarter and Indiegogo, the public impression is that crowdfunding is for projects that couldn't get funding any other way. Mention crowdfunding, and the images that come to most people's minds are of an independent artist or a small-time producer whose work is too original to receive funding anywhere else. Often, the image includes an impression of people who are looking -- partly for ethical reasons -- for new models for the distribution of music, movies, or other copyrighted material.

This impression is incomplete and overly idealistic. However, its existence is very real. It is one reason for the animosity directed towards certain famous successful campaigns. Musician Amanda Palmer, for example, was criticized for asking the public for money, then supposedly asking local musicians to play for free on each stop of her tour. In effect, Palmer was accused of escaping the limitations of a standard recording contract by becoming an exploiter herself.

Similarly, when Rob Thomas set records for funds raised to fund a film based on the cult TV show Veronica Mars, many bloggers felt that Thomas had no business crowdfunding because he was, after all, an established TV producer rather than a wannabe or semi-professional. Moreover, the show he was trying to continue had been on a major television network and sold successfully on DVD, making it something less than a backyard effort.

The Ubuntu Edge campaign is open to the same sort of objections. It is one thing for the Yorba Foundation to attempt (unsuccessfully) to raise funds to finance the development of the Geary email reader. Unlike Canonical, Yorba has applied for non-profit status, and exists only to develop free software tools like the Shotwell photo manager. Members of Yorba would have benefited only by being able to work full time on Geary, which gave the campaign a degree of idealism lacking in Ubuntu Edge.

If anything, the use of  the Ubuntu name leaves a feeling if not of duplicity, at least of marketing slickness of the kind that many people in the free software community retain deep suspicions about. The fact that Canonical's relations with the greater community have been strained in the past does nothing to quiet the misgivings, either.

As with the Palmer and Thomas fundraisers, the impression is left that the already established are abusing the mechanism of crowdfunding -- a trend that could quickly discredit and destroy it if too many others do the same. Not only that, but here is a corporation trying to exploit community goodwill again.

Crowdfunding, many idealistically believe, is supposed to be an alternative to traditional business methods, not a continuation of business under a slightly different set of rules. That's why the affluent -- especially among the young -- often donate large portions of their income to crowdfunding campaigns, even though they receive no tax-receipts. It's not just for the mostly token thank-you-gifts for their contributions. Although Ubuntu Edge keeps to the letter of crowdfunding on Indiegogo, many may be nagged by the suspicion that it breaks the spirit simply by existing.

Of course, not everyone feels that way. Canonical and Ubuntu have fans who follow their every move with breathless adoration, both in the general public and among professional journalists (one of the former periodically contacts me, trying to convince me of the errors of my ways whenever I say anything that is less than uncritically complimentary, an attitude that terrifies me). Focusing mainly on the technology, they care little about licensing or implications.

And who knows? Maybe they are right to act the way they do. Maybe crowdfunding has come of age, and the idealism with which it began is overdue for being abandoned. But, one way or the other, campaigns like Ubuntu Edge's show that crowdfunding is overdue for re-evaluation.

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