Crowdfunding Stories: 10 Case Studies That Moved the World Through Empathy

This time, we introduce "Crowdfunding Stories: 10 Case Studies That Moved the World Through Empathy" by Hikaru Degawa (Seigensha).

Author Hikaru Degawa, a graduate of an art university, worked at CAMPFIRE—a crowdfunding platform—from 2011 to 2015 before going independent. As a director, he has been involved in over 600 funding projects, raising an impressive total exceeding 500 million yen.

This book is the author's exploration of the essence and success of crowdfunding, drawing on his extensive knowledge of numerous crowdfunding case studies.

What exactly is crowdfunding?

The book defines it as follows.

The term "crowdfunding" is a portmanteau combining "crowd," meaning a group of people, and "funding," meaning the raising of money. As its meaning suggests, it is a web service that raises money from an unspecified number of people via the internet to realize ideas. (P31-32)

Of course, the act of "gathering money from many people to realize something" itself has existed in human society for a long time. For example, in Japan, the names of individuals or groups who contributed money to local festivals have traditionally been displayed on lanterns at the venue. The two key points unique to crowdfunding are the addition of "through the internet" and "from an unspecified number of people."

While there are various theories about its origins, the United States is considered the birthplace. In 2001, Perry Chen, a young resident of New Orleans, wanted to put on a music show but lacked sufficient funds. He came up with the idea of raising money online. Later, in 2009, Chen and two other founders launched "Kickstarter," establishing the model that continues today.

The crowdfunding market has expanded rapidly since Kickstarter's inception. A World Bank report estimates it will reach $90-96 billion by 2025.

It arrived in Japan in the summer of 2011.

When the author first heard about crowdfunding, they thought it might be difficult to popularize in Japan, where a culture of donations or investment isn't deeply rooted. Yet they chose to challenge this industry because, during their time at art school, they witnessed many talented individuals unable to earn a living from their work and forced to abandon their creations for survival. They felt this reality could be changed.

That hope is now becoming a reality, with Japan's crowdfunding market expanding to ¥170 billion in fiscal year 2017.

(I must admit, I have a serious appetite myself and have participated in several food-related funding projects...)
 

A compelling "story" is crucial for crowdfunding success

While crowdfunding is becoming an established method for raising funds, projects naturally sometimes fail to reach their funding goals. What exactly separates success from failure?

The author argues that the "story of the project itself" is crucial.

This book includes a checklist to determine if a project meets the requirements for success. Below is an excerpt of the key points.

■ Elements a project should fulfill

1. Clear Motivation:
   You can explain in one sentence why you want to undertake this project.
2. A protagonist exists:
   It is clear who is driving the project.
3. A story exists:
   There is a story about the project's origin, background, or the encounter that sparked it.

■ Elements we want to see fulfilled during crowdfunding

1. A clear vision of the final form of the project's deliverable (product, artwork, location, etc.).
2. The project page is of satisfactory quality.
3. You are actively using social media.
4. Supporters are present around the project.
5. Not afraid to put your real name out there.

Do you get a sense of what makes a successful project? The projects I've participated in fit these criteria perfectly...!

This book features ten crowdfunding success stories the author was involved in. The projects span diverse genres, from mobility solutions for wheelchair users to contemporary artworks dedicated to Tohoku after the earthquake.

Yet each case study feels less like a business analysis and more like a short story. This is because every project introduced has a protagonist, a clear motivation, and a compelling narrative.

Consequently, even unspecified investors resonate with each story, feel compelled to become part of it themselves, and offer their support. Even when using the same "crowdfunding" platform, the approach varies completely from case to case. I highly recommend reading it.

The Reality and Future of Crowdfunding in Japan

The standout part of this book is the dialogue section between the author and Takayuki Fukatsu (CXO of piece of cake / Representative of THE GUILD). Unlike the author's passionate case study reports, Fukatsu offers a cool-headed, higher-level perspective from an external viewpoint, speaking bluntly about the current state and challenges facing the crowdfunding industry.

For example...

• Despite Japan's small domestic market size, there are far too many platforms. Consolidation is still necessary for efficiency.
• The original ideal was "to enable even those who find fundraising difficult to raise money." However, while well-known celebrities and naturally skilled individuals with strong fundraising capabilities have found it easier, it remains highly challenging for the general public. (Crowdfunding has become the harvest phase of social activities.)
• Platforms lack clear explanations about tax handling and risk hedging, leaving many uncertainties for those considering participation.

These are some of the challenges being pointed out.

This brings us abruptly back to reality from the passionate narrative. For Japan's crowdfunding market to achieve further expansion, addressing these challenges is undoubtedly essential.

That said, the potential and promise of crowdfunding are genuine. As this book also highlights, numerous projects that would never have materialized without crowdfunding have been born. It remains a mechanism that brings opportunities to individuals with dreams, goals, and stories that resonate with people.

The book concludes with a detailed guide titled "Getting Started with Crowdfunding," outlining the steps to realize a project. If you have an idea you want to bring to life or a story you want to share, picking up this book could be your first step. As the reach of crowdfunding continues to expand, the challenges currently facing the industry will surely be resolved.