The Power of the Crowd: Fundraising for Cleantech0

Brian Clark Howard | Thu Feb 16 2012 |

Since October, Shawn Frayne and Jordan McRae have shipped 10,000 B-Squares to customers around the world—a feat that wouldn’t have been possible without the power of the crowd.

In May 2011, Frayne and McRae posted their project on Kickstarter—a popular crowd funding platform—in hopes of raising $25,000 to take their idea from prototype to product. But by the time their project expired in June, 1,110 backers had pledged a whopping $145,034.

“It exceeded our wildest dreams,” Frayne said in an interview. “We launched B-Squares on Kickstarter as an experiment to see if consumers would like the modularity concept enough to part with their dollars. The experiment showed that they did, at least the leading edge of visionaries and early adopters.”

Inspired by innovation

The B-Square is a modular, solar-powered electronics system that can be used to tell time, light up a room, charge an iPhone, power small electrical loads, and serve as building blocks for a seemingly limitless array of creative and DIY electronics projects, from art installations to robots.

For $22.50, a Solar-Square becomes a mobile, mini power station. Touch that to a Battery-Square and you have greater flexibility. Want more juice? Just add more Solar-Squares. The corners of all B-Squares are magnetic contacts, allowing instant connections without wiring or soldering. So B-Squares can be quickly joined together to form large panels, or they can be stacked vertically.

At the consumer level, cleantech can feel out of touch, but that’s where crowd funding can come in.

The basic concept was inspired by the innovation of interchangeable parts that spurred the Industrial Revolution and has only accelerated in the digital age, from circuit boards to chipsets. “We want to take the interchangeable parts of a factory and put them in the hands of a consumer,” Frayne says. “With a set of 10 squares, they can download software and have thousands of possible applications.”

Running a successful campaign

Before B-Squares, cleantech hadn’t seen much success on Kickstarter. “Something about the modularity and open hardware pulled in more people,” says Frayne.

On their Kickstarter page, Frayne and McRae posted a snappy video on the six initial B-Squares. They added that they had come up with the idea while prototyping a different project, but wanted a way to quickly integrate solar power.

Anyone who pledged $15 was designated a “solar supporter,” and would receive one Solar-Square. Pledges of $50 received a kit of several different squares, as did those at $100 and $250 levels.

Frayne says they didn’t hire any help to get the word out about the campaign. “Our networks are not that huge so we were a little afraid that by just going to friends and family it wouldn’t catch on,” he explained. But the project got picked up by the tech press and received a lot of support within the Kickstarter community.

Crowd funding’s promise for cleantech

Dallas Kachan, an analyst of cleantech funding, explained in an interview that he thinks crowd funding platforms like Kickstarter can be great for raising small amounts of capital for prototyping and “one-off projects.” “But when it comes to the tens and hundreds of millions of dollars needed for new breakthrough science, that still best comes from institutional investors,” says Kachan.

Kachan says big investors like to get seats on a company’s board and hope to get a sizable chunk of profits. Clearly, someone who plunks down a small pledge on Kickstarter has different motivations. “B-Squares is a fun illustration of concepts, but it is not something that could bring a one-hundred-times return on investment by radically changing the way we grow our food, fuel our transit, and get energy,” says Kachan.

Thanks to Kickstarter, B-Squares has now entered the next phase of development, with a focus on improving user experience and modularity.

Kachan believes there’s a role for crowd funding in projects that implement existing technologies. As an example, he says it could be a great way for a town to get some solar panels by asking for help from residents, who could even become cooperative owners.

“There is a lot of space for unexplored territory and markets that haven’t been tapped,” says David Cohn, an expert on crowdsourcing and the founder of Spot.Us. “At the consumer level, cleantech can feel out of touch, but that’s where crowd funding can come in,” he added. “Cleantech is still waiting for its Steve Jobs or its consumer revolution, but B-Squares shows the potential for a startup or savvy person to tap that market.”

Cohn says crowd funding can connect people to the “think global but act local” motto by allowing them to participate directly in projects that can have impact. It can be thought of, he says, as an extension of Bucket Brigades (which measure air quality) and other citizen monitoring and science efforts.

The future of crowd

Platforms like Kickstarter have seen explosive growth over the past few years. According to Frayne and McRae, they have been contacted by other cleantech startups that hope to replicate their crowd funding success.

Thanks to Kickstarter, B-Squares has now entered the next phase of development, with a focus on improving user experience and modularity. Frayne and McRae are also trying to raise $1 million in capital from more traditional cleantech sources like venture capitalists and proven angel investors. They are also looking to expand and open up B-Square development to a community of designers who can come up with new squares, new code, and new uses, then sell their innovations in an open market. It’s a model that has worked well for software.

“Our hope is that someone will buy them and make something—say, a wireless radio—and see how easy it is,” says Frayne. “Then they might buy one additional square—say, a carbon dioxide sensor—and then build a wireless air quality sensor. The general consumer becomes a maker,” says Frayne.

Illustration by Gracia Lam