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As a concept exploiting the power of crowds is not new. Charles Mackay in Extraordinary Popular Delusions and the Madness of Crowds wrote in the nineteenth century of the irrationality of crowd mania. The Wisdom of Crowds published this century by James Surowiecki states the collective intelligence of groups of people is greater than the individual. ‘Collective stupidity’ conversely, is the tendency for mass collaboration to dilute bright ideas to the lowest common denominator. Crowdfunding, whether it’s the latter or former or both, has the proven ability to capture the imagination and pockets of a disparate bunch of individuals worldwide.

My colleague at ClearlySo, Rod Schwartz touched on ‘crowd-based initiatives’ in his blog back in May. Expanding on this theme one comes across a spread of sites dedicated to the struggling entrepreneur. Kickstarter is ‘a funding platform for artists, designers, filmmakers, musicians, journalists, inventors, explorers…’. ChipIn embeds a widget on your homepage or favourite websites to promote your cause and collect cash as widely as possible. With Sellaband you can help your favourite cash-strapped amateur musician record an album. I’m keen on BeerBankroll. A $50 buy-in means you will be ‘living the ultimate dream’ of helping establish a community managed brewery.

On a more intellectual tangent Cquestrate is attempting to find an answer to the challenge of reducing carbon in the atmosphere through a simple and ingenious idea. They have made the project open source, which is smart and common sense. This system of connecting lots of clever brains on a single goal is the central theme of the book Wikinomics. It cites examples of large corporate’s reaching out with a problem to the web and successfully recruiting the solution from a mass effort.

This ‘hive-mind’ approach to puzzles of enterprise and intellect has a promising track-record. It brings together collectives with a common passion from music, to charity, to film to science. Financially, the funders sink or swim with the failure or success of their investment and this shared purpose engenders a virtual camaraderie.

If you are a social entrepreneur you should be excited because it provides a technological lifeline to the ideas which can’t access traditional funding. The power of social networking has enabled this financial democracy to flourish. The Age of Stupid for example has already raised £850k and maintained its independence on distribution rights.

If I were to take a punt over where this is headed I would say it’s certainly likely to become more popular and professional with the evolution of the web. It will also likely cover an ever wider range of sectors and interests. And, given the money being pumped by Western governments worldwide towards creating a Social Economy, social enterprise will surely benefit.

If you have a eureka moment but nae cash then why not try yoking your friends and colleagues together and making them stump up. At least this way you’ll avoid the bank.

Alex Scott-Tonge

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