I am beginning to think I have a crowdfunding addiction because I can’t seem to pass up new products on Kickstarter and Indiegogo. This morning, I wanted to see what the dictionary description of compulsive behavior is versus the definition for addiction to see which I might be.
The dictionary defines compulsive behavior as performing an act persistently and repetitively without it necessarily leading to an actual reward or pleasure.
The dictionary defines addictive behavior as an inability to consistently abstain, an impairment in behavioral control, a craving, a diminished recognition of significant problems with one’s behaviors and interpersonal relations, and a dysfunctional emotional response.
Now, after reading the definitions, I might not fit into any category. The reason I wondered about this is because I have invested in over 120 ideas of other people on those two sites. Let me back up a minute and explain what and how Kickstarter and Indiegogo work. Let’s say you have a idea for a product, a book, a movie, mostly anything that you feel can go from a idea to a real-life product, but you don’t have the funds. Then you crowdfund and ask people to invest in your idea so they can get in on the product early, before it is made public. I started investing in these two sites, which work very similarly in providing a site for campaign managers and investors to get together. Both sites provide a product description, a timeline from beginning to end, and a description of what the will use your money for. This is all provided by the campaign manager. I want to say this right now before you run to these sites and start investing: there is no guarantee that any idea you invest in will actually work. I have lost plenty of money funding ideas for which either the person with the idea took the money and ran or the person just didn’t have the ability to go further with their idea. There is no refund for failed projects on either site. I started funding projects, by my estimate, 10 years ago, when smart watches were just in the discussion phase at the big companies like Apple. The meta watch was my first investment. It connected with your phone, and like today’s smart watches, it gave me information from my phone. The meta watch was big and clunky, but it did what is was supposed to do, so I didn’t have to take out my phone. The Martian watch was my next purchase, and it was a step up. It not only looked nice but also gave you information from your phone on a little strip at the bottom of the watch face. The Martian watch allowed you to talk into the watch, like Dick Tracy. It was the first watch to have that ability, that I know of. They are both out of business now. This was the beginning of my love affair with crowdfunding. I like to be able to have items that haven’t gone out to the public. I like that wow factor when people come to my home and see my Flyte clock with the levitating sphere.
My crowdfunding love affair led to my spouse and me opening an e-commerce business called Uniquethingsonline.com. What I have learned in the three years of having a e-commerce business is that crowdfunding projects are not for everybody. There’s a special group of us that will pay for these products. The other problem with crowdfunding projects is that the ideas are taken to China to be made into a real item, and by doing this, the projects are duplicated more cheaply by the same people that they use to make the product. Our e-commerce business never really took off as we had hoped. This hasn’t stopped me from investing. I have come up with another idea, which is to fund the project in the early stages when it’s at its lowest, and then, once the campaign for the product has ended, I sell my investment. The retail price is always higher than when you get in as the early bird, so I can sell it on eBay and make a profit. That’s my new plan, and I’ll let you know if it works. Maybe I’m borderline addicted, not fully fledged addicted, but close. I have retired, so money is tighter for investing, but I rationalize that by selling for a profit, it’s okay to buy, but it’s not really. Writing this makes me realize it’s not okay to run up credit cards with the hope of making a profit in the future. Addictions are hard. I think the first step is recognizing you have a problem and want to get help. I will become more aware of my investing and ask myself some basic questions, like, “Will people see a need in this product, or will it enhance a person’s life?” I have to be truthful in my answers, or there won’t be any purpose to these questions. Am I addicted? Maybe not, but if I don’t become more aware of investing, I could be headed to Dr. Phil’s chair for some tough love.