Agreed with shawnc, the article should state Crowdfunding and not Kickstarter. But that aside, I definitely agree with others that using crowdfunding as a "startup tool" doesn't make everything and everyone on there a "startup." If anything, it allows people to get very important market validation which can lead to a startup environment and lead to more outside capital.

I personally don't think software has big potential with crowdfunding platforms since crowdfunding success has been inherently hardware-driven. I also think developers run the risk of pitching a software "idea" to a huge audience where one dev browsing the site can steal the idea and make it while you wait to raise your $50k for "coding." I also don't think it's in the nature of any dev to do that; perhaps kids who have "ideas" for apps, can't code and don't want to spend the money on a 3rd party dev.

There's also an inherent risk with crowdfunding. Sure, we look at success stories like Ouya and Pebble who have both raised a ton of equity-free capital - but those are rare. I never saw the value or appeal of Pebble, to me it's just another useless watch with a display. Similar to a useless Nike Fuelband, but people like gimmicks and "new stuff" so more power to Pebble. Pebble has been plagued with a few issues as well as Ouya and I think a lot of these Cinderella stories are glorified on TechCrunch while forgetting to mention the fact that creating hardware is a very tricky business.

The consumer, of course, doesn't care about your supply chain, tooling, manufacturing, QA, warranty, logistics and 20 other things associated with launching a successful hardware product. They paid for a good, they want it shipped. If it doesn't work, they want a return. And they'll most likely bitch and moan just so you can suffer a little more.

So while we may see certain success stories in the Crowdfunding space, they're primarily hardware, tangible goods driven and rarely reach the $1M range. It is very difficult for any hardware product, even with a high margin and low COG, to make a profit with a sub-$300k crowd raise. So when you see someone raise $125k for some hardware which looks great (renders), has a great video, and a 2 month ship date - that's not reality. They're most likely losing money on that deal. I've personally been involved (as an advisor) with a company that raised over $220k for a high-margin / low COG consumer electronic and they are bleeding money.

On the surface it's like everything else - glistening. But inside, these things are tough. With that said, market validation is the biggest gain you can get from crowdfunding, unless you're pushing the $750k raise range. And I'm sure the Pebble guys made some nice money since that campaign raised so much cash, the HTML on Kickstarter couldn't even handle the number.

I also wonder what kind of products we'll see on crowdfunding platforms. I foresee a lot of informercial-like products coming up, imagine the Shamwow guy selling that crap in front of millions of online users - it could be a big market or rather, a shift from traditional dead media (TV) to the Internet. This includes the funding of independent films, Zach Braff's latest project was somewhat disruptive when it comes to how movies are traditionally made. Be in no doubt, Hollywood and all the other traditional media old farts are all over these sites, forming strategies on how to crowdfund their projects by making it seems like the actors themselves are seeking funds.