We’ve only seen the beginnings of the radical change that crowdfunding will have on product commercialization, especially with any consumer-facing hardware product. Crowdfunding platforms like Kickstarter and Indiegogo allow entrepreneurs to pre-sell their products.
This provides a unique opportunity to validate a market and build an online community around products prior to making the capital investments required for a first manufacturing run. Furthermore, it allows the creator to stay ahead of their cash cycle and avoid giving up equity in their company by using customer money to fund the early stages of getting their product in consumers’ hands.
– Michael Iseman, Startup Junkie