Necessity is the mother of disruption

A hat tip to IDEO’s Tom Hulme for pointing me in the direction of Kickstarter, a social-funding platform based in the US. Kickstarter aims to help hard-up creative entrepreneurs find money for artistic or “ambitious” endeavours. Ideas for potential projects are posted on the Kickstarter website, allowing interested parties to make donations. No equity is taken, but the most successful projects tend to come up with innovative ways to reward their benefactors.

One of Kickstarter’s more obvious charms is its all-or-nothing policy, borrowed it seems, straight from the BBC’s Dragon’s Den. Projects must be fully funded before the allotted time expires or no money changes hands. This has two notable benefits. One, it allows creatives to gauge public interest in a project before committing to it, which provides more-or-less free market research with zero risk. Two, it lends a sense of urgency to entrepreneurial creation. Want to bring an idea to life? The clock is ticking.

Kickstarter is full of creative ideas, focussing largely on prospective films, books and music, plus the odd entrepreneurial gem, such as the social enterprise Conflict Kitchen, a take-away restaurant that only serves food from countries with which the United States government is in conflict.

Conflict Kitchen’s current incarnation is the Iranian take-out restaurant, Kubideh Kitchen, serving kubideh: a spiced meat barbari bread sandwich with onion, mint, and basil. The sandwich is served in a custom-designed wrapper that features interviews with Iranians on subjects ranging from Persian poetry to politics, thereby serving up a multi-sensory attack on the cultural conscience.

The theme switches every four months (a frequency that appears to lag only slightly behind US foreign policy) allowing Conflict Kitchen to provoke discussion around a different culture. Next up is Afghanistan. Bolani Pazi, as it will be known, plans to offer a well-known Afghan street food, called bolani. After that, Conflict Kitchen will switch its attention to North Korea. If you want to invest, do so here.

While Kickstart’s projects provide a great example of innovation thriving in the oxygen of social support, it’s hard to ignore the invention of the funding model itself. Last month I spoke to the creators of Funding Circle, a UK social lending platform, about the paucity of available funding for established SMEs. Funding Circle aims to help small businesses reduce their reliance on punitive high street banks by putting them in touch with members of the public. Group lending ensures the risk of default is spread, securing an above average return for investors and improved rates for borrowers.

Small business finance is critical for long-term economic growth, yet the lack of supply remains a problem infinitely more discussed than resolved. Labour flat-refused to tackle it, while the coalition continues to prioritise the issue right to the bottom of the list. If the banks won’t play ball, perhaps it’s time to disintermediate them out of the picture completely. Social lending could prove necessity is also the mother of disruption.