New network that takes on Facebook is project of 'casual' angel investment site

Techies and casual Web users alike are flocking this week to check out Diaspora, a new social network backed by pent-up frustration with Facebook and 6,479 investors who thought it seemed like a good idea.

Founded by four friends at New York University, Diaspora hopes to capitalize on Facebook's criticized stance on user privacy and personal control over information that lives forever on the Web.

It also happens to be the first success story for Kickstarter, a New York-based website that brings hotshot angel investing down to earth and allows anyone to contribute any amount of money to a project. Some Pittsburghers see it as a more casual method of investing, an alternative for a city with established incubators that are on the lookout for the Next Big Thing.

Pittsburgh entries on the Kickstarter website range from a catalog of our nation's great-grandparents to a robot prototype designed to mimic a cheetah. One project, Conflict Kitchen, serves up food in East Liberty from countries in conflict with the United States.

Kickstarter takes a sort of PBS "Viewers Like You" approach, expanding the usual circle of investors beyond generous parents and West Coast executives. In exchange for a contribution, investors don't receive shares but instead gifts from the project creator, ranging from a personalized thank-you note to a laptop computer.

Kickstarter projects have up to 90 days to meet their fundraising goal; no money is exchanged if the donations fall short. An Amazon.com program transfers money from one account to another and only trust ensures the investor contributions are used for the project and not, say, groceries.

As a hosting fee, Kickstarter pockets 5 percent of the donation.

Diaspora and Kickstarter have fueled each other's popularity. The social network project initially aimed to raise $10,000 on Kickstarter in 39 days. The final tally: more than $200,000.

It remains to be seen if the money translates into Diaspora members. Facebook crossed the 500-million-member mark over the summer and shows no signs of slowing despite criticism aimed at its founder and chief executive, Mark Zuckerberg, over the company's confusing privacy settings.

Membership growth is essential to a social network's success but at some point becomes a liability as users don't feel as exclusive, or just don't want to be part of something their Mom knows about, said Alessandro Acquisti, a professor of Information Technology and Public Policy at Carnegie Mellon who studies social networks.

Facebook managed to cross that threshold and went from an exclusive community to an essential way to stay in touch, he said.

"Any network that's tried to compete against Facebook -- like MySpace or Friendster -- has entered an arms race to see how much users can be nudged toward revealing," he said.

The fever pitch of privacy concerns is what helped Diaspora accumulate so many backers on Kickstarter.

Any Diaspora connection needed to send messages, share photos or swap content with other computers will be computer-to-computer and not processed through a company server. Real-life conversations between friends don't need a middleman to process the messages -- so neither should a virtual one, the team says.

Most Kickstarter projects from Pittsburgh are more artistic or altruistic, and there's no Diaspora among the lot yet, but a few have raised serious cash.

One local artist wants to memorialize the nation's great-grandparents with graphite drawings ($445 raised), and the "Here You Go" plan distributes umbrellas to neighbors stuck in the rain ($3,085).

Area movie projects also abound, like the dark comedy about cannibalism called "Hungry" ($700) or the documentary on gentrification called "East of Liberty" ($45).

Distinguishing itself from the group was Dan Shope's Cheebot, an energy-efficient four-legged robot that mimics a cheetah's movement and can roam on terrain difficult for a vehicle to navigate, like the desert or mountainous corridors.

Mr. Shope, a senior studying mechanical and biomedical engineering at Carnegie Mellon, scoured science reports to study what makes a cheetah's body move so fluidly when it hits top land speeds. Some subsidization from the university helps him keep the current prototype price down to about $1,000.

Mr. Shope didn't raise any money during his first Kickstarter round in June. His next attempt won't make the same mistakes.

He worries that the military applications of the Cheebot turned off some potential investors looking for more humanitarian initiatives or that he didn't explain the concept clearly enough.

After all, the project has embraced the inherent geekiness of four-legged robots. Contribution increments range from $1 to $1,013 and seem random -- $11, $37, $101 -- until you realize they're all prime numbers.

Pittsburgh's bevy of incubating companies have often served as an early booster to startup efforts in the city.

But before an entrepreneur turns to Kickstarter or an incubator, "the first step is always going to be friends and family" who can check in on their investment at Thanksgiving, said Terri Glueck, director of community development at Innovation Works, the South Side nonprofit venture capital firm.

Ms. Glueck said she sees Kickstarter as a terrific way for entrepreneurs to connect over mutual interests, and that it's indicative of how comfortable we've become with sharing in online communities.

Though some Kickstarters like Mr. Shope plans to pursue a business, others see Kickstarter as a chance to subsidize a hobby.

An architectural consultant by day, Ben Peoples of Squirrel Hill wants to send his camera up in the sky to photograph historic industrial sites around the city.

His Kickstarter projects have forced him to learn the nuance of entrepreneurial timing. He turned to the website to bring the aerial-kite photography technology he used in California to the windier terrain of Pittsburgh (his solution: a model airplane).

The first project exceeded his fundraising goal, pocketing $424. The second, "part two" installment of the project hit Kickstarter two months later and ended with a whimper: only $77 in pledges.

His first project is under way, and Mr. Peoples keeps his investors updated with an occasional newsletter.

"It's pretty laid-back," he said. "I don't have anyone knocking on my door."

First published on September 16, 2010 at 12:00 am