Startup Act 2.0 Will Make Sure the Next Google is Made in America

We’ve got to get beyond Ellis Island. America needs people, but not just the tired, poor, and huddled immigrants referenced by Lady Liberty. Though we are a nation of immigrants, the American 20th and 21st century success means that we must find a way to attract the creme-da-la-creme to start businesses in America.

The proposed Startup Act 2.0 puts America on the right path to attracting just that. The Act, introduced Tuesday as a bipartisan effort by Senators Jerry Moran, Mark Warner, Marco Rubio, and Chris Coons, is designed to help America regain the edge in attracting top entrepreneurs.

As the bill’s authors state, “Research has shown that for close to three decades, companies less than five years old have created almost all of the net new jobs in America—averaging about 3 million jobs each year. “

As other nations develop, it is increasingly necessary for America to retain its edge by creating the best new businesses. However, as an entrepreneur, academic, and friend, I have heard way too many horror stories about highly intelligent individuals, many of whom have been educated in America, being unable to remain in America after graduation.

Let’s face it: America has a dearth of engineers. And our science and math education system is pathetic in relation to the rest of the world. And we have skilled labor jobs that need to be filled. The only way for America to thrive in the future is to retain the undergraduate and postgraduate students who have thrived in this country. What if Sergey Brin had to start Google in Russia? Then America would have far fewer jobs, fewer tax revenues, and less dominance over the Internet industry, not to mention less knowledge. (As Forbes wrote, immigrants make great entrepreneurs.) But the reality is that many awesome American-educated entrepreneurs are returning home.

The Startup Act 2.0 is a solid first step to halt this brain drain. One strong feature of the bill is that it “eliminates the per-country numerical limitation for employment-based immigrant visas and adjusts the limitations on family-based visa petitions from 7 percent per country to 15 percent without increasing the total number of available immigrant visas.” This will help America retain Chinese and Indian talent. Immigrants from these countries with large populations are currently getting an unfair shake, so many are returning home to start their businesses.

While there may be some backlash from academic purists, I strongly support the bill’s provision to assist universities by providing “federal funding for research and development to support innovative initiatives at American universities to accelerate and improve the commercialization of taxpayer-funded research. Grants will be awarded to universities pursuing specific initiatives to improve commercialization capacity and to assist universities that want to pursue initiatives that allow faculty to directly commercialize the research.”

Hopefully, these subsidies will enable institutions to incubate businesses while also fostering competition in various markets. While I understand that it may be deemed unfair for some universities to receive funding at the expense of others, so long as jobs are created from the companies that are emerge, America should come out ahead. I view this tactic as particularly helpful when countries like China are directly subsidizing industries to the detriment of American producers, as the American solar sector experienced. (One must note that many Chinese companies are run by “sea turtles,” or Chinese citizens who were educated in America and then returned home.)

Even though both chambers of Congress passed the JOBS Act that was then signed into law by President Obama, this Congress has a poor track record for passing meaningful legislation. Let’s hope that neither party tries to derail this unique bipartisan effort. And if any lawmaker does, may he/she pay with his/her own job this November.

(And on a personal note, thank you from the bottom of my heart to the authors of this bill who have decided to call it the Startup Act 2.0 rather than the Start-up Act 2.0. That unnecessary hyphen is probably costing the American economy $25 million annually.)

My food evolution: Atoning for my culinary sins and the 11 Commandments I will now follow

My first proper foray into journalism was, at age 14, writing a restaurant review column titled “Morse’s Morsels” for Oceanside High School’s Sider Press. I have continued to write about food and restaurants, both professionally and for fun. However, I have never publicly discussed my own eating habits, concerns, and woes. And there are many.(I’m not pulling a Frank Bruni here, I promise. Just keep reading!)

When I read Fast Food Nation as a teenager, I was disgusted by the atrocities perpetrated by American fast food companies against their employees (many of them undocumented immigrants) who risked life and limb to bring Chicken McNuggets to the masses. Yet I was not moved to take action. My 17-year-old self went, along with my friends, to McDonalds, Burger King, or Wendy’s five days per week to raid the dollar menus. And at this hormonally and metabolically gifted age, we hardly gained a goddamn pound (despite consuming chicken feces and all the other junk that’s inside any standard fast food sandwich).

I had the knowledge, yet I remained ignorant.

In college, not much changed. Food trucks and ethnic cuisines in West Philadelphia,  replaced the fast food of old, but even reading “The Omnivore’s Dilemma” didn’t do a thing to majorly shake up my habits. I naively considered the lettuce and tomatoes on top of my Greek Lady chicken salad hoagies to be sufficient vegetable intake. (None of this was helped by the fact that I lived in places with some really nasty kitchens featuring roaches, mice, etc. I was convinced that I’d rather spend the money eating out then dying of some foodborne illness.)

(Sidenote: For the only math class I took at Penn, I wrote a paper explaining why I would  continue to eat at Taco Bell despite an outbreak of salmonella and nationwide produce recalls, because statistically, there were greater odds of many more obscure things happening to me than being effected by diseased lettuce.)

Some of my food consumption habits changed when I lived in England after graduating from college. Someone once said that, food-wise, for every mile outside of London it’s like taking a yea back in time: I was based almost two hours outside of London. Needless to say, I was horrified by the low quality of food at restaurants. But British supermarkets are surprisingly quite cheap and offer a solid selection. Therefore, I started cooking for myself by eating eggs every morning while frequently making myself pastas that were heavily laden with vegetables.

Some of my progress was likely erased when I returned to America and started working. I found it hard to cook find time to cook while spending 12+ hours per day commuting and working.

It was only when I returned to Europe again, this time Denmark, that the obscene, and I mean obscene prices of food when dining out in that socialist paradise forced me to eliminate eating out except for very rare special occasions. However, at this moment, I had the time and the motivation for start eating better. (Snagging a girlfriend with a keen interest in healthy eating didn’t hurt. In fact, daily reinforcement focused on healthy living was lifechanging!)

Fast forward two years.

Despite one friend insisting that I read Jonathan Safran Foer’s book Eating Animals since it first came out, because after reading it, she promptly and permanently converted to vegetarianism, it was only after I purchased a Kindle in late 2011 that I got around to reading this piece. By early December, after reading the book on bus rides through London, I was shocked and horrified by what I read about meat production, especially in America.

For me, a sore spot has always been the threat of going bald. Despite my hair starting to thin in high school, it has remained largely in tact. (Knock wood!) Though my dad, bald himself, thinks I’m crazy, I attribute my hair retention to the egg yolks (packed with biotin and silica) that I have eaten regularly since age 21. But the more I read about eating animals who themselves were fed all sorts of chemicals, hormones, and antibiotics, the more that it grossed me out to even consider eating them myself.

So on New Years Eve, at a supermarket in Amsterdam, I ate a sample-size piece of salami, and proclaimed that I would never eat meat again.

Three months later, I’ve done a pretty decent job. There was one transcontinental flight where I was unable to obtain a vegetarian meal, and there were certainly a few instances when, after consuming alcohol, that I snuck a bite or two of meat. (I actually felt physically ill after each of these errors, one time even regurgitating.)

But only today, after walking for 100 blocks did I really screw up. My stomach was growling like a lion when a storefront signboard depicting a juicy, succulent barbecued chicken stood before me. I turned to see that Boston Market was running a promotion for a half chicken, two side dishes, and a corn muffin for $7.99.

I don’t know what made me do it. But I walked into that restaurant. And I ordered that chicken. And I felt like I’d just committed a personal felony. I didn’t enjoy one bite of that chicken. But it inspired me to do better.

I don’t want to be a forty-year-old who looks sixty. I want to be a forty-year-old who looks thirty. And I’m not going to get that, or live a long life without needing medical care, if I eat crap. Plus, I want my hair.

So, for the next three months, I am setting 11 Commandments for myself that I am determined to follow:

1.No fried food.

2.No cheese (unless it’s a rare high-end import).

3.No Chinese takeout (because of the low quality oils that it’s cooked in).

4. Carry small bags of mixed nuts with me or similar snacks at all times.

5. Consume no carbohydrates that are not of the whole wheat/whole grain variety.

6. Eat small dinners that have limited carbohydrates.

7. Never drink more than one beer per night. (Switch to red wine.)

8.Do not eat within four hours of going to bed.

9. Consume eggs, yogurt, or something Larabaresque for breakfast.

10. No sweets, except for the occasional dark chocolate bar.

11. Consume no less than six vegetables per day.

A follow-up post with additional details about my self-imposed (and crowdsourced) punishments for violating any of these tenets is coming soon! Also, I downloaded Lose It! — a free diet and weight monitoring iPhone app — to help me keep track of my food intake. I will report back on how this app, which has great reviews, has helped (or hurt) my efforts.

Startups that are trying to create marketplaces that monetize video content. (But what does it take to bring people to the market?)

I have been researching startups that offer opportunities for original video content creators to monetize their work, oftentimes by creating marketplaces and platforms. Here are some of the more interesting companies that I have discovered. (Please feel free to add others in the comments section.)

Note: I am staying away from companies that only work in the music monetization and companies that are essentially video advertising solutions.

1. PlaceVine (Acquired by social video syndicator Alphabird in 2011)

About: “PlaceVine is a service that bring passionate content producers together with marketers and their agencies to create socially engaging branded video experiences. Today, the basic Placevine service enables producers to showcase their concepts and content for brands, and enables marketers to provide talented producers with brand integration opportunities.”

2. Koldcast.tv

About: “KoldCast TV, a division of KoldCast Entertainment Media, LLC, is an international television network which distributes programming to entertainment consumers around the world via the KoldCast TV Network site, found at www.koldcast.tv, via set-top boxes, connected/smart TV’s and mobile devices, and via unique relationships with broadcast and cable TV networks and other television distribution venues around the world. Our programming is largely created by independent television producers and filmmakers from the United States and countries across the globe. The phenomenal growth of independent programming allows KoldCast to be highly-selective in its programming choices. Unlike online video distribution sites like YouTube and those that have followed them, KoldCast specializes exclusively in professionally-produced programming. Our programming slate does not combine user-created videos of cats and dogs playing the piano or riding a lawn mower.”

3. Blur Group

About: “Blur Group has built and operates the world’s largest Creative Services Exchange™. With 14,075 creatives and exchange staff, a unique business model and advanced technology, it radically alters the marketing services space. CMOs, marketing directors, VPs, creative heads and innovation leaders buy the best, most cost-effective creative services from expert providers around the world. The biggest global brands, the coolest startups and all points in between choose this transparent approach for the most cost-effective, real time and relevant design services, marketing campaigns, content programs, original artwork and innovation partnerships.”

4. Talenthouse

About: “Talenthouse provides life-changing opportunities for the creative community. It’s a place to participate in projects with leading artists and brands, gain recognition and virally grow your audience. Talenthouse embraces artists at every level of their career, as well as all supporters of the arts. Attracted by the potential for discovering, collaborating with and mentoring emerging talent, many global brands and acclaimed industry icons are involved with Talenthouse by hosting Creative Invites. Brands choose Talenthouse to engage in a dialogue with their audience in a targeted, relevant and credible context. Talenthouse currently focuses on film, fashion, music, art / design, and photography.”

5. Videolla.com

About: “You simply upload your video to Videolla and set price for it or insert ads into the video. Its simple and free. You will not need any coding skills. Just register, upload your videos and pick if you want to sell them or place ads.”

6. Bozza (South African)

About: “Most individuals in Africa engage with digital communication, information and entertainment through their mobile phones. Content drives the uptake of technology; yet despite the global increase and focus on the value of content, there continues to be a lack of locally generated, contextually relevant content for the African market. Focused on local made-for-mobile content, the Bozza application offers artists, filmmakers and entrepreneurs a mobile platform through which to distribute their content. By doing so these SMMEs earn revenue and users get free access to relevant, premium content (music, written word and videos) that entertains, educates, informs or all of the above.”

7. Poptent

About: “Poptent is a vibrant community of filmmakers (and actors, comedians, grips, animators and more!) who are connecting to each other and to companies that want to pay them for their talents. Through our passions for advertising and commercials, we are exploring a new way of creating branded messages for the Internet age. Poptent members can show off their work, build a portfolio, collaborate with other creators, leverage our deep set of features, and best of all make money doing what they love. Poptent brands are seeking new ways to reach their consumers and create new audiences. They are finding exciting possibilities that save them both money and time while staying just ahead of the curve of competition. They are, in a word, trendsetters.”

Now that the US Senate passed the JOBS Act, I discuss how this new piece of legislation can improve the quality of American journalism

I recently blogged about the many benefits that I hope will come to America with the passage of the JOBS Act. Now that the US Senate has passed the JOBS Act (with an amendment that I support), the bill has gone back to the House of Representatives for final approval before President Obama signs it into law. Despite my skepticism about the ability of Congress to pass any legislation in this toxic and partisan political climate, I am pleasantly surprised that it looks like the JOBS Act should go through with bipartisan support.

My general thesis is that if the “people” can now invest in new ventures, then they will be more apt to use products and services that cater to small groups/communities, and more likely to shun products, services, and information that comes from large corporations that are geared for the masses. (Of course, it may take a couple of years to see these effects, but I am hopeful that fragmentation can create diversity in spheres of life where Americans now have too few choices.)

While other commentators have focused on the overall benefits and drawbacks for investors, businesses, regulators, and consumers, I will list potential ways that the new crowdfunding legislation can influence and disrupt journalism. My theories on winners and losers from the JOBS Act:

1. Communities can rally around creating publications that they control, rather than leaving sub-par newspapers in the hands of publishers motivated by the bottom line rather than creating high quality community content. (Look out Patch and legacy publishers!) The potential to revive local journalism in places that are currently without local news sources is the most promising development that I see. But legacy media organizations should be on guard, because disruption born out of frustration may be just around the corner.

2. Niche publications will be able to get off the ground more easily. If a fragmented community of  1,000 people (I’m thinking an online community for this example), spread throughout America, wanted to hire one person to work to create content, they could hypothetically each donate $30 to a venture that could create a niche publication with a professional or semi-professional journalist/curator at the helm.

3. Television networks and cable channels should be scared because YouTube is already slicing up the market, but enthusiasts of various types of content that don’t achieve the critical masses needed for channels that cater to advertisers may now have their opportunity to band together to create more desirable programming…and make it profitable.

4. Television news should be a prime target for entrepreneurs at the local and national levels, as it has remained virtually unchanged for such a long time. I foresee new formats developing, and I believe the crowd will control how they develop.

5. Crowdfunded radio stations may destroy the traditional for-profit ones. Watch out ClearChannel. Look out for an indy radio explosion…(most likely based on the Internet).

6. Lone bloggers and journalists with strong personal brands (or with the ability to build strong personal brands) will now be able to have investors rally behind them. This could create a major revolution for sole proprietors, ending the struggles that freelancers face in terms of tax burdens. Another advantage is that talented people may now be more willing to go off on their own rather than remain with corporations that under-utilize talented journalists’ skills and abilities.

Final thoughts: My debate vs. Felix Salmon about Matter and why I still believe that the Matter team created a dishonest Kickstarter campaign and why their business model is unsustainable

My debate about Matter with Felix Salmon got some pretty good traction on the internet, as it was blogged about by Andrew Sullivan at The Daily Beast, Kevin Drum at Mother Jones, Matthew Yglesias at Slate, KPCC, Wired, Techdirt, Poynter, and more. I missed all of this as these responses appeared during my scramble to get my act together prior to heading down to Austin for SXSW. I figured now would be a great opportunity to sum up the points that I made, because my 45 minute debate was reduced to 4.5 minutes on ReutersTV and Felix encouraged me to respond at length:

Stephen Robert Morse’s list of reasons why Matter has an unsustainable business model and likely won’t succeed

1. A plethora of science and tech magazines (Wired, Popular Science, Popular Mechanics, The New Scientist, Scientific American, etc.) as well as non exclusively science magazines (Mother Jones, The Atlantic, etc.) already provide free long-form content that covers science and tech. When these organizations do charge subscription fees, it is not on a per article basis. Therefore, consumers achieve way higher value than the one article per week that Matter plans to offer for 99 cents.

2. The costs of producing and editing a high quality piece are generally in the $6,000 range. This estimate includes $5,000 to pay the reporter and cover the reporters costs, plus $1,000 to pay an editor for a week’s worth of work. This doesn’t include any legal reviews, technical considerations, or marketing budgets which also have to be included in the final production costs.

3. As part of their Kickstarter campaign, the Matter team already sold the exclusive right to advertise as part of their corporate level sponsorship for seven months (at the time of this writing). There proposition that there would be no influence from advertisers is now nonsense. In my opinion, the Matter team already lied by implying that their publication would be advertisement free based on quotes from their video critiquing advertising beside articles and writing in their pitch: “We’re building MATTER for readers, not advertisers.”

4. Matter now has over 1,000 people on their “Editorial Board.” Is that supposed to be a good thing? Who will the editorial board be permitted to choose from to write the articles? It’s likely that the authors and their cronies will be decide the slate of candidates whom the crowdsourced public can vote on to write stories to begin with.

5. When I originally wrote my piece, Matter had not even hit its $50K goal. Now, it is at $120,000, which should in theory give it more money than just producing 8 issues. One of my original criticisms was the publication would run out of money after only two months. Now, I presume they can produce approximately 20 issues, or 6 months worth of content, which is still nothing too impressive. As they say in their trailer, “Producing high quality long-form journalism is expensive.”

6. Having a great trailer for a Kickstarter project with big names endorsing a non-existent product is disingenuous as they create a false hope. (And it makes the web-celebrities lack all future credibility in my book.) If the journalists responsible for this project were so great, they would already be household names after years of science and tech reporting, but they are not.

7. Long-form journalism specialist publication The Atavist has become profitable not by selling their journalism, but by having an ancillary revenue stream: The Atavist makes approximately 50% of their revenues by licensing their priority software to others.

Part 1: The law that could save sustainable journalism will be destroyed unless the US Senate acts now!

I recently argued that upstarts like Matter that have made successful pitches on Kickstarter are not the solution to solving journalism’s long-term problems. Why? Because crowdfunding, in its current form, does not permit people to make investments. Rather, crowdfunders make donations, or in some cases loans. The outcomes are variable and generally unsustainable

When David Cohn started the crowdsourced journalism non-profit Spot.us four years ago, it worked on a similar premise to Kiva, whereby donors received part or all of their money back if and when a crowd-funded story sold to a legacy media outlet. Cohn prevented  any one person from influencing which stories were funded by limiting each donor to funding 20% of the total amount raised for each pitch. (Of course this system is potentially flawed in that one donor can spread his/her money out to friends etc, but at least Cohn tried to implement a system of checks and balances.) But Spot.us was designed to assist existing organizations, not create entirely new media outlets.

We’re on the brink of a revolution that could lead to saving sustainable journalism and create many jobs

But we may be on the brink of a journalism revolution. Currently, only accredited investors are able to invest in newly formed companies, which prevents Kickstarter, Spot.us, and any other crowdfunding site from raising capital for startup companies and entrepreneurial journalism ventures.

Forbes reports:

Under current federal and state securities laws, startups are prohibited from selling stock or other securities via crowdfunding sites or social networking sites.  Such laws include:

• A prohibition against “general solicitation” – which means that a company may not offer or sell securities unless there is a substantive, pre-existing relationship between the company (or a person acting on its behalf) and the prospective investor (see “Can I Raise Money For My Startup Via Twitter?” );

• Disclosure and state law compliance requirements if the investors are not “accredited investors” — which usually makes the offering of securities too costly and onerous for a startup (see “Ask the Attorney – Securities Laws”);

• A requirement that any intermediaries (including websites) must be registered with the SEC and applicable state securities commissions as a “broker-dealer” in order to legally accept any transaction-based compensation in connection with the sale of securities (see “Ask the Attorney – Beware of Finders”); and

• A requirement that any company that has 500 or more shareholders and total assets exceeding $10 million must register with the SEC and file periodic reports.

These laws were designed with good intentions: Nobody wants to see Mom and Pop lose their hard-earned money to a snake oil salesman! But in today’s crowdfunded world, they no longer make sense. And when tech-savvy Americans realized this, they sought action.

In the United States Congress, Rep. Patrick McHenry (R-NC) (who made some excellent contributions to 2010 Census oversight, which I know from my time spent running MyTwoCensus.com), introduced crowdfunding legislation that was one of the most popular bipartisan initiatives in recent history, garnering support from Democrats all the way up to President Obama himself. McHenry’s bill, the Entrepreneur Access to Capital Act,  H.R. 2930 (full version here), passed 407 to 17.

This makes total sense. Republicans generally don’t believe that the government should be able to tell people how to spend their money (anyone can gamble or booze away all of their savings, can’t they?), and Democrats don’t see why accredited investors who are members of the “top 1%” should be the only folks permitted to invest in startups, thus preventing the upward mobility of the masses.

Specifically, the highlights of H.R. 2930 are as follows:

- Create a crowdfunding exemption from SEC regulations for firms raising up to $2 million, with individual investments limited to $10,000 or 10 percent of an investor’s annual income.

- Excludes crowdfunding investors from counting as shareholders for purposes of calculating the 499-shareholder cap under 12(g) of the Securities Exchange Act

- Preempt state law and exempts the ban on general solicitation for the new crowdfunding exemption.

But now, as always seems to be the case as of late with the American government,  just when we’re on the brink of something great, the millionaire’s club also known as the United States Senate has failed to move forward with this legislation, thus preventing it from making its way to President Obama’s desk to become a law.

Despite Senate Republican Scott Brown of Massachusetts championing similar legislation to the resolution that the House of Representatives passed, lobbying groups like the NASAA (North American Securities Administrators Association, “the oldest international organization devoted to investor protection”) have wielded their influence over the 100 people who control the fates of the other 300+ million.

What needs to happen now is simple: An online campaign of the magnitude of the SOPA/PIPA variety must be enacted to create swift and effective action to boost America’s economy by causing the US Senate to pass comprehensive crowdfunding legislation.  Sites like crowdfundinglaw.com and startupexemption.com have already been set up to explain this law and advocate its passage. And using a Wefunder.com petition, more than $6 million has already been pledged to support investment in new ventures if this legislation is passed.

But will Google, Craigslist, Wikipedia, and all of the other organizations that led the charge against SOPA and PIPA step in to assist with this one?

As someone who is not interested in the “rewards” that Kickstarter campaigns promise their donors, but rather direct return on investment in monetary form, I and other like-minded people would be happy to invest in startups despite our lack of accredited investor status. I don’t gamble in casinos, but I’d be happy to gamble on good ideas and innovation.

Coming soon: Direct effects of crowdfunding legislation on new journalism business models…

Why I will not donate to this Kickstarter campaign that purports to save journalism and why you shouldn’t donate to it either

DISCLAIMER: To clarify any questions that may arise over my use of language in this post, I used the words “scam” and “snake oil salesmen” with hyperbole in mind. The same goes for my references to English accents. (I recently returned to America after spending the better part of the past 1.5 years in the UK.) My blogs sit at the intersection of my opinion, current events, and  humor. This blog was first published at StephenRobertMorse.TowKnight.com, but my words do not reflect the opinions of the Tow-Knight Center, the City University of New York, or anyone other than myself.

UPDATE: As was expected, Matter has aleady hit their goal of raising $50K (currently at $57K) with 28 days to go. I estimate that they will hit $500,000, but I still do not support the structure of their business, even if they have outlined some sort of a business plan in response to this post.

Learning from Mel Brooks’ The Producers, creating and executing a successful Kickstarter goes something like this:

Step 1: We find the best video production team we can afford.
Step 2: We find a big name techie spokesman and some guys with posh English accents to star in the trailer.
Step 3: We raise two million dollars…There’s a huge Kickstarter community out there!
Step 4: We hire the best tech writers we can to put out a few issues. And before you can say
Step 5: We close our publication, take our two million, and go to Rio.

I noticed a Tweet this morning that promoted a Kickstarter campaign for Matter, a long-form journalism effort that comes from an international group of journalists who previously wrote for mainstream publications that cover science/tech. While the trailer has an obscenely high production value and the project may have some biggish-in-this-insular-world names on screen, they never make a point to say where the money that unsuspecting victims donate is actually going.

(I know as well as the next guy that Americans are so easily duped by  posh British accents of the Oxford/Cambridge variety that they would probably donate to these guys if they were selling a pile of sludge. Let’s just call them Snake Oil Salesmen 2.0.)

Yes, they’ve got Evan Doll (co-founder of Flipboard) and Cory Doctorow (co-founder of Boing Boing) promoting the project in their trailer,  but what does this effort actually do to save journalism or create a sustainable business model for long-form reporting?

Investing in sustainable models that help save long-form journalism

On the other hand, my colleague Noah Rosenberg is developing a project that actually seeks to create a SUSTAINABLE BUSINESS MODEL for long-form journalism. And people like Evan Ratliff at The Atavist and the folks over at Byliner have already invested in creating these models too.

Matter claims: “Every week, we will publish a single piece of top-tier long-form journalism about big issues in technology and science.” This is NOT a sustainable business model. It means that a top quality writer who commands 75 cents per word will blow through this money very quickly. And it mentions nothing of the costs of editing and promoting the content, or the costs associated with research and travel to create these pieces about the aforementioned big issues.

And in their Hollywood-quality trailer pitch, they say “Nobody’s built to produce this stuff.” Actually, people are built to produce this stuff. Many of them. From Mother Jones to The New Yorker to The New York Times to the aforementioned startups to the publications that these dudes previously worked for…

Anyone who would ever consider financing these self-proclaimed top notch journalists (in return for T-shirts, cupcakes, and whatever other junk they are offering) to write cool stories about saving the planet, shouldn’t.  Your money would be better invested in projects that can actually have long-term financial viability and longevity. Buy a subscription to one of the other legacy magazines already out there that produce way more content.

I don’t doubt that this project will hit $50K within a day or two. But it is a scam in that the costs of completing an operation like this have not been articulated to the people who may be making donations to the project. In my humble opinion, a solid trailer is the key to success on Kickstarter. And with 28 days left, these guys may raise $500,000. But I don’t like it one bit. Where will that money go?

To potential Kickstarter donors who hope to save journalism: Invest in business models that has been thought out and created to do more than produce one long-form article every week. This project is just something cute, like a meme-of-the-week. It lacks a thorough plan.

But who am I to tell people how to spend their money? I’ve just got to come up with something better…

Microsoft is quietly stepping into the citizen journalism business…

Citizen journalism has faced one major obstacle that has prevented it from going totally mainstream: Source verification. This is an issue that I have discuss frequently with my friend and former classmate Torsten Mueller, of MundusMedia in Germany, who is  hoping to find solutions to this problem. As a Poynter blog noted, breaking news often hits Twitter first and then spreads to the mainstream media.

But now, teams of researchers are creating methods to help verify sources:

Late last year, a team of researches at Duke University (alongside a researcher from Microsoft) announced the creation of YouProve. This is an Android based system that I fear may not gain traction simply because it may lead to privacy issues.

Poynter also points to the work of Rutgers researchers.

*Again there is a team member who is a Microsoftian. I have manually verified that she was formerly a Rutgers Post Doc. And if I didn’t fear New Jersey so much, I’d try to meet with this team on their home turf, but perhaps I can coerce them to join me in New York for a bit.*

I suspect that verification has been a problem for citizen journalism sites like London-based photojournalism agency Demotix (that took an undisclosed investment last year from Corbis, which is privately owned by one Bill Gates) and Citizenside (that took an investment from AFP in 2007).

However, questions of privacy still remain, as verification also means that one’s personal information could/should be compromised for the sake of authenticity. This could lead to problems for anyone who hopes to be an anonymous source, especially sources based in America or in countries with oppressive regimes.

Future of crowdsourced fundraising? Dispersed!

Like everyone else, I have been amazed by how Kickstarter has been able to fund business, arts, and journalism projects. But I don’t give. Yes, new projects are cool. But what I’m looking for is return on investment.

In general, the rule of thumb on Kickstarter is that unless you are funding a cool new tech product that will later retail for a higher price (so the creators’ claim), you will only be rewarded with a measly little cupcake. Do I really want a $5 cupcake mailed to me at some random point next year? No, I don’t. And many other people who are mindful of their money don’t want such gimmicks either.

But I am interested in using crowdfunding for other media purposes. However, I want funders to have equity stakes in the projects they fund (which is possibly in Germany as evidence by my friend Lars’ project…check out the 2000 Euro+ levels here).

(As crowdfunding sites proliferate, the costs of building and developing them will go down rapidly, which is demonstrated by the fact that you can now find cloned Kickstarter source code free on the Internet or pay some guys — probably in India — less than $1,000 to build, modify, and maintain a clone site for you.)

But what stands in the way of equity investments in crowdsourced products? The US government’s accredited investor law. More on that soon…