The 'next Facebook' will be a crowdfunding platform

The leading social network service is ... Facebook.
The leading micro-blogging service is ... Twitter.
What's the 800 lb gorilla in online services for startups? ... There isn't one.

There is no one place 'everybody' goes online for startups.  And thus:

• You can't access a 3rd party app market and related APIs.
• There is no 'search' for startups.
• There is no central ecosystem for all the related players (office rentals, IP lawyers, accountants, benefits companies, employees, ...)
• There is no way to apply deep quantitative models and trend analytics to startups.
• And of course, as a consequence, much of the startup market remains opaque and difficult to access.

And yet, think about how huge the small business ecosystem is.  American "informal investors" put approximately $51 billion into early companies in 2010 alone (business angels, only $9.4 billion of that).  But it's the size of the entire ecosystem around small companies that really drives the value of being a "Facebook of startups" -- and that's going to be an order of magnitude bigger.

So what happens when across the global scene (or some fraction of it), trillions of dollars worth of ecosystem start focusing its time on one (or a few) winners in the online startup space?  And when players access related apps from a marketplace, find employees, employers, lawyers, administrative services, office space, designers, etc?  Investors will find a rich ecosystem equally valuable and transformational, given that large data sets of info will enable trend analytics and custom deal potential identification.  Do you suppose that will make a 'Facebook' of the space valuable?

I've had a conversation with a number of VCs about a crowdfunding platform being the next major investment potential.  Mostly they just politely change the subject, or even roll their eyes.  Reminds me of trying to get funded in the 90's for a virtualization startup (doh!).  Well, I'm going all-in on perhaps my biggest ever trend call.  The next Facebook-sized investment opportunity in software startups, is a crowdfunding platform.  And it's going to have an app market & APIs.  Roll your eyes all you want, sheople.  It's about to get interesting...

P.S. It's worth noting the momentum picking up in regulatory changes for crowdfunding.

Congressional hearing on crowdfunding, White House blog post on crowdfunding

Crowdfunding is really picking up steam in the U.S.:

• Hearing #2 in a House of Representatives subcommittee (this time specifically about crowdfunding!) is scheduled for 9:30 a.m. on Thursday, September 15.  Btw, you can request that C-SPAN covers this hearing, by calling them the day before at 202-737-3220.
• In a recent blog post from the White House Office of Science and Technology, point#1 makes the case for allowing crowdfunding as part of the Startup America initiative.

This is a great time to get the word out about the petition for crowdfunding at StartupExemption.com.  It's important to show support while this is a hot topic.

I keep track of related events in a dedicated page.

Kevin at Maker Faire (Bay Area) moderating crowdfunding panel

I'll be at Maker Faire (Bay Area / San Mateo) moderating the crowdfunding panel on Saturday May 21 (3pm).  Drop me a note if you want to meet up

Kevin at Crowdsortium Symposium

I'll be at the 1st Crowdsortium Symposium (Google HQ, Mountain View) on May 19-20.  Drop me a note if you want to meet up.

Congressional hearing on "The Future of Capital Formation" video available

The video from today's congressional hearing on "The Future of Capital Formation", which affects crowdfunding, is now available online.  Unfortunately, Woody was swapped out last minute to make room for former SEC Commissioner Roel Campos.

Congressional committee hearing on crowdfunding exemption Tue May 10

A landmark U.S. congressional hearing relating to crowdfunding and small business capital formation, takes place on Tuesday May 10th, 2011!  Entrepreneur Sherwood "Woody" Neiss testifies in front of the House Committee on Oversight and Government Reform.  Woody is advocating SEC regulatory change which would enable small businesses to solicit funding from the general public.  And besides the ear of congress, Whoopie Goldberg has got behind him.

The implications of such needed change are monumental to the entrepreneur, to small businesses and to the economy -- all of which have been held back by lack of modern methods of capital formation.  Despite the commercialized Internet being over 15 years old, the general public has nearly no access to private companies as an asset class, outside of their immediate circle.  And yet, people of wealth (i.e. "accredited investors") can be readily solicited for funding, and thus have virtually unlimited access to potential private investments.

While this momentous event takes place at a U.S. congressional hearing, its significance is absolutely global.  The U.K. already has an exemption in place, and at least one equity-based crowdfunding platform (Crowdcube) is operational in the U.K.  Given the proliferation of other forms of crowdfunding throughout the entire world, it's a matter of time before other countries come on board.  And thus there is also a strong competitive element in allowing crowdfunding for investment.  In an Internet-based information economy, it will be virtually impossible to compete without bringing private investment into the Internet fray.

Please support Woody and the entire crowdfunding and entrepreneur community.  The hearing should be webcast live.  Also, C-SPAN decides on Monday, May 9, which programs it will broadcast for Tuesday.  Update: unfortunately, they don't take inputs from the public.

The community tool library, from books to drills

We tend to think of a library as a communal repository of books, magazines and other literature.  But why not a library of tools instead?  The same argument applies -- it's often not feasible to own all the tools a person needs over time, so why not borrow them from a communal repository?

The Northeast Portland Tool Library is an interesting community effort which answers these kinds of questions.  It makes home improvement and gardening tools available to residents of Northeast Portland, much like people check out books from a library, late fees included.  It's very community centric, and operated out of the basement of a church!

That makes me wonder, is this a model which will become popularized over time?  Now that ebooks and tablets are shredding the paper book markets, will the next community libraries store tools?

Btw, you might want to also check out my related post about TechShop, a new club model place to get access to cutting edge machining and design tools.

Update: There's a Wikipedia page listing a number of tools libraries.

Disclosure: no positions