I had 3 new business ideas recently, all related to escrow services. They are not anything I would want to launch myself right now, since I already am busy enough with my existing businesses, so I thought I would put them out there in case anybody else is interested in starting them:
Idea #1. Kickstarter Escrow – The biggest complaint about crowdfunding sites like Kickstarter.com and Indiogogo.com is that many times people put up their hard earned money to pre-order a new product, but the item never gets manufactured and delivered. There is almost no accountability at all on these types of sites, so if they want to, the person or company raising the money can pretty much just walk away from the deal and keep the money without delivering the product they advertised. Either it starts out as fraud by a person who
is just out to scam the public, or delay after delay causes the buyer to wish they had never invested. Examples of this include
the Confederate Express video game, which recently made national news because the owners of the company developing it are alleged Airbnb squatters, so their Kickstarter campaigns are now in doubt also. Other well known problem Kickstarter projects include Healbe, Ritot, Kobe Red, and TellSpec, and there is even a site at KickScammed.com dedicated to exposing Kickstarter fraud.
A possible solution to this would be for an escrow type company to either:
A) Hold the crowdfunded money in escrow and pay it directly to the suppliers, just like how a construction loan is handled in real estate. This would not guarantee the product would get launched, because the company could still fail, but at least it would eliminate people who raise money in bad faith and never plan to deliver the product.
B) Put the crowdfunded money in escrow until the product actually starts shipping, and instead loan money to company based on all the pre-orders (and guaranteed payments) they received via the crowdfunding site, plus maybe some other collateral. If the product never gets delivered, the buyers would get all their money back (from being held in escrow) and the escrow/finance company would take the loss.
It would greatly benefit a Kickstarter.com/Indiogogo.com product to use either of these 2 types of escrow, because it would get a much much higher response rate for fundraising due to investors not having to worry as much about losing their investment.
Idea #2. E-Book Escrow – In the recent TechCrunch.com article How To Save Books by Jon Evans,
he proposed a business model where readers pay nothing for e-books up front, and instead pay only after they read them (basically, they only pay for books they liked). In a comment to this article, Jeremy Lee James suggested that the reader could “buy” the e-book from Amazon.com by depositing the purchase price into an escrow type account controlled by Amazon, and then download the e-book. The author would only receive the payment from Amazon if the reader gets to the end of the book (Amazon already monitors what page the reader has read). If the book is not finished after a certain length of time, it would be deleted from their e-reader, and their money would be returned to them.
I am not sure if Amazon will ever do this, but it would not be hard to setup a 3rd party escrow service for this purpose, that self-publishing authors could use to sell their e-books online. Or, you could setup your own e-bookstore site with built-in escrow, and signup authors sell their books in it.
Idea #3. Bitcoin Escrow – Unlike when paying with a credit card or by Paypal, there is no way to dispute a bitcoin (or any other type of cryptocurrency) transaction. This is why I’ve heard people enjoy buying it from websites similar to bitcoin.com.au. So, if you pay somebody $100 in bitcoin online for a used Xbox and they never send it to you, there is almost nothing you can do about it, although there are reputable companies that are starting to accept bitcoin payments, you can have a look at a list of some of them here at Coinsspent.com, so you know you’re bitcoins will be safely spent at selected places. There are several bitcoin escrow services you can use to protect yourself such as:
but all of these are relatively new sites and none are established escrow services, like how eCop.com and escrow.com already handle domain escrow. If a more well known escrow service started offering escrow for bitcoin transactions, they might be able to obtain significant market share. The problem with anything cryptocurrency related is that there is a lot of fraud and very little trust, so people have no reason to trust these escrow services since they don’t have much of a history. This is why there are now companies involved within the cryptocurrency markets offering private key management for more secure transactions, hopefully solidifying future market doubts.