NEW YORK (TheStreet) -- It's hasn't been two weeks since Neil Young unveiled his new company PonoMusic on a stage at SXSW in Austin and launched a Kickstarter campaign. Within hours, that campaign blew through its goal of $800,000. At last check, it had netted over $4.8 million with 21 days to go.
While most of those backers are from the U.S., a good number are from parts of Europe, Asia and other parts of the world.
"We're delighted with the response," CEO John Hamm said, in an interview Monday with TheStreet. "The 14,000 backers to me are every bit as important as the money."
In hindsight, crowdfunding seems like the perfect vehicle for Young's company, using the singer/songwriter's rock star status to best advantage simultaneously to raise cash and generate buzz for the company's release of its products. Even Hamm said he underestimated how powerful a tool a Kickstarter campaign could be, as the community of backers themselves generated more interest in the project through social forums. That sparked a movement that, in turn, attracted additional media attention."I chose Kickstarter mainly because of the intimacy of the direct connection with the customers," Hamm said. "What I underestimated was the community." Young and Hamm initially approached venture capitalists but couldn't get a firm commitment. At SXSW, a somewhat frustrated Young laid the blame for that on the company's vision for restoring a more complete music experience through high-definition audio technology. "I was deeply shocked by the fact that the venture capitalist world did not understand this opportunity," Young told the audience. "The fact that they couldn't own it -- that you couldn't do something to the sound that they would own." But that may be only part of the issue. Young's technology is complex and has been under development for years, wrestling with major obstacles. Coding techniques and hardware designs were developed, scrapped and reworked. Enough pieces of the puzzle are still being hammered out that only five prototypes of the PonoPlayer exist. Pono most resembles Apple's (AAPL) digital music arm in that it has two big components: a $399 iPod-like piece of hardware roughly the size of a handheld mobile device; and an online store, like iTunes, that will offer a central location to find a wide variety of high-quality digital audio files. While Pono offers the opportunity for the highest quality digital audio experience, it doesn't impose its own format. The format and degree of quality are choices left to the artists.
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