CrowdPreneur Blog
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2008-06-30 09:32:44
New York Private Equity Forum
Rick with Founders Bryan Emerson of Starlight Investments and Mike Segal of MJ Segal Associates
Last week Rick had the opportunity to give the keynote at the New York Private Equity Forum, a prestigious event that showcases fifteen early, later-stage and emerging growth investment opportunities from throughout the U.S. Representitives from all major investment firms were on hand to hear Rick's speech on "7 FAQ's on W eb 2.0 and Crowd Power".Speaking to a keenly interested crowd, Rick gave a walk-through on the in's and outs of crowd power. We have uploaded the slideshare file and we will be posting a video of the event in the upcoming week.
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2008-06-24 10:17:16
Network Hub: Speaking to the Crowd on Crowdsourcing
Last Thursday, Rick spoke at the Network Hub, a local Vancouver venture capital fund and small business incubator that caters to early stage entrepreneurs. Speaking about his book and the power of crowdsourcing, Rick entertained the lively crowd, and answered questions and encouraged conversations among the group.
The large crowd of passionate entrepreneurs, many of whom were new to crowdsourcing and it's effects, also enjoyed having Mike Sirkorsky from Cambrian House on hand to discuss the topic from his perspective.
For more pictures please check out our Media and Events page
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2008-06-18 09:02:17
Business Week Article Posted
Rick had a chance to sit down and do an interview with Karen Klien of Business Week to chat about Web 2.0 and it's relevance for entrepreneurs as well as established corporations. For the full article please click here
"I can imagine some CEOs being a bit squeamish about turning that much power over to their customers.
Crowd sourcing is a true collaboration with your customers, which is definitely an odd concept. It goes far beyond customer feedback surveys or comment cards. Entrepreneurs have to be more transparent if they want to participate in it. If they're closed and protective and more traditional, this isn't going to work for them.
What about start-up entrepreneurs? How do they use Web 2.0?
I think it's a matter of being creative and looking at new concepts through an entrepreneurial lens. I go to Silicon Valley innovation conferences and technology summits, and I see that the people there don't necessarily look at new ideas through a base of entrepreneurial knowledge. Would-be entrepreneurs could sift through the concepts in these cutting-edge environments and apply business knowledge to them. It's not that tough to do, because a lot of the conference content is posted online for free, either in abstracts or videos or PowerPoint presentations.
Just like other entrepreneurial endeavors, it's all about finding a void, looking for an unfilled niche, reading the crowd, and creating something that will take off. The great thing is that for very little money, anybody can go online and create something that becomes viral."
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2008-06-03 15:43:29
Make It Business Article
Make It Business , a Vancouver business publication has posted an excerpt from e-Preneur for their feature story entitled "Next Internet Goldmine is the Crowd"
Check out the full article here , or the full version pdf here
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2008-06-03 15:26:47
BigCarrot: Inducing the Crowd
Inducement prizes are actually pretty common. Some of the more famous prizes include the Longitude Prize, the Parking Meter Prize, and the X-Prize. Kent Pepper, founder of BigCarrot, was fascinated by the idea and set out to create a website that facilitated this " radical approach to problem solving". Because an inducement prize requires that the prize money be put up front, the model has usually only been reserved for large companies, governments, or the very rich. But BigCarrot democratizes this process and gives the power of activism to the crowd. Passionate about something? Convince a couple hundred people of the same thing and you can create a prize on the site. "If one person has an idea, they cant be the only person who has thought of that, so BigCarrot enables people to be proactive in their causes" says Pepper.
The prize cycle looks like this:
After laying out the rules, the community votes and adjusts them until they are comprehensive. The project is then released into the wild, with the hope of motivating someone to work it out and claim the prize..gif "BigCarrot Timeline")
Since the site was soft launched a few weeks ago, the site has had limited uptake, with 20,000 uniques coming to the site, and several prizes to be awarded. BigCarrot is currently running a promotion where if bloggers promote the site and a prize to their members, BigCarrot will waive the prize initiation fee.
Which brings us to the business model. BigCarrot makes it's money by putting all prize funds in an escrow account (see Crowdspring) and collecting interest on the principle. They also charge fees for posting a prize. Although I wouldnt be surprised if this fee is eventually waived to induce (sorry I couldnt resist) more uptake.
BigCarrot is a great idea, and with enough traction, and maybe some SEO, the site will begin to see some serious money flow through the site, attracting serious attention from innovative minds. The next few months will be crucial if BigCarrot is set to take off, and I will be interested to see what inventions and solutions are created as a result
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2008-05-27 14:19:12
Crowdspring: An Innovative Crowdpowered Design Marketplace
Crowdspring is a creative marketplace thought up by co-founders Ross Kimbarovsky and Mike Sampson out of Chicago and is the latest entry into the crowdsourced graphic design industry. On-site, buyers can post a creative project for the crowd, and then users can then post their ideas in the form of a completed work and the buyer then chooses the best one. As Mike says, “We look at it as a global stage for creativity. Where your experience and your title don’t matter. All that matters is your entry to the project.”
Remind you of 99 designs and GFXContests.com?
Not so fast.
Crowdspring differeniates itself in 2 key ways. Firstly, they allow all payments to be put in an escrow fund, allowing the creatives to know that they will receive full payment upon being selected. This is increasingly important as they are trying to appeal to a global market and with this of course comes cross-boarder payment difficulties. The second, and most important differentiator, is intellectual property protection. While this favors both parties, the buyers are the real winners here. This is how it works. Before posting a project, buyers are allowed to either use a Crowdspring created contract (Kimbraovsky is a intellectual property lawyer) or add one of their own. This is important, as in the U.S. even if you have paid for a creative work, it doesnt transfer to the buyer unless it is in a written aggreement. They also gauruntee that the buyer will get entries. If there isnt 25 submissions for the project, then the buyer can walk, no questions asked.
The business model for Crowdspring focuses on a commision fee for all buyers who post their project (Mike mentioned a $45 fee for a $400 dollar project). Crowdspring also gains interest on the money in the escrow fund, an innovative way to increase revenues. According to the founders, audio/visual elements will be added to the site to reach a greater audience, although will most likely have to involve a complete overhaul of the current platform, and could be a long time coming.
One knock on the site is it's lack of collaborative elements. There is no way for users to work on projects together. Mike Sampson says "We don’t see that (collaboration) as working for the buyer. What we provide is choice, choice and more choice…kluster and Cambrian House are more high-falutin ideas. We say open up your project, look at the grid and you will see 25 or more solutions to your problem”
Crowdspring is aimed at developing for the creative services market what iStockPhoto did to the stock photography industry. And they are well on there way, with innovative features, solid management, and a strong business model, Crowdspring has what it takes to become a major player in the online creative services marketplace.
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2008-05-22 09:48:54
Brand Tags
Brand Tags, the social branding project that has exploded over the past few weeks is a side project of Noah Brier, a strategist at Naked Communications. Garnering the praise of the Wall Street Journal and other notable sites, Brand tags has become sort of a phenomenon, filling a void that almost makes you scratch your head and say, "Why didn't I think of that?" To understand how Brand Tags works, I asked Noah to explain the basic premise.
"It is pretty simple really. People come on the site, where we have 400 brands listed. You come on and you are supposed to write down the first thing that comes into your head when you see the brand and then I take all these results and put them into a tag cloud, so whenever someone says something, the larger the word becomes"
For example, the following is a part of a tag cloud that was generated when users were presented with the UPS logo.
As we can see, the tags "brown" and "delivery" are among the more common impressions. If you look at the tag cloud as a whole you will see that "what can brown do for you", "reliable" and other positive tags are among the largest. This is indicative of a very positive brand image for UPS.
But look at what happens when the Beijing 2008 logo is displayed.
Not a pretty picture if you are a Chinese Olympic official. It is through Brand Tags that we see that when people think of Bejing 2008, they think of the Tibetan crisis. As Noah pointed out,
"Everything communicates” when we look at some of these brands we see a lot of advertising and ultimately what you see in these tags is “bad customer service” and things like that. No matter how many impressions you get, one time when I can a customer service line and someone is a jerk to me I am going to tell people that."
However, this data is only important if the representation of users representative of the population as a whole. Being that it is using web 2.0 technology, and incorporates extensively tag clouds, the average web surfer who isn't a twittering, friendfeeding, blogger might not be prone to use it. For example,one commenter on the WSJ article noted"I really don’t give it any credibility whatsoever. The descriptors are all listed in different case sizes, almost as if there is a secondary objective here to put a personal opinion behind the responses"
Clearly this person doesn't understand how the concept works, or tagging etc. So is data skewed towards just the "geeks" of the world and those who read blogs? Noah responds:"I have been surprised how 'ungeeky' it has been. If you take a look at some of the more ‘techy’ brands, a lot of the people don’t know what is. I think especially in our universe of blogs and tech and startup,
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2008-05-22 09:41:21
VLAB Recap#2 Venture Capitalists and Crowdsourcing
All of the crowdpowered companies in the previous article received funding featured about have all secured financing. Are these exceptions to the rule, or is there an appetite for crowdsourcing deals among VCs? One of the two VCs present was Bill Reichert, Managing Director, Garage Technology Ventures. He described the lineage of Garage as being in tune with crowdsourcing. He described his company as “the earliest version of crowdsourcing in the VC community.” He said the company was founded as a means to try to find unproven entrepreneurs and unproven technologies. He likened this to a form of throwing an opportunity to the crowd to see what would happen. A lot! They received 100,000 business plans over 24 months after they opened. Mind you, this was during the bubble. Reichert said that their current positioning is as a seed / early stage investor with a focus on finding novel companies with novel technologies
What does Reichert think about the future of crowdsourcing: is it a fad or is it here to stay? Reichert’s view is that, “of course, crowdsourcing is sustainable!” In fact, he tossed a barb at Howe, noting that, “with all due respect, you [Jeff Howe] didn’t invent it!” Reichert view is that, “crowdsourcing is a fundamental human pattern. There is no doubt crowdsourcing here to say.” The issue, however, from the VC standpoint: is it fundable?
Reichert recalled that after James Surowiecki’s book The Wisdom of the Crowds was published in 2004, a number of deals playing on that theme emerged. But for Reichert the key question was: how do you monetize these deals? Further, picking winners in this new field is no easy task. Reichert explained that the challenge from a VC standpoint is to pick a financable team that will build a company that will have a viable business model. Reichert noted that broadly speaking, crowdsourcing companies can succeed. The advantage for entrepreneurs is that it is easy to get started. However, it is hard for an investor to look at one and saying it is one of the ones to succeed.
The other venture capitalist on the panel was Sar Gur of Charles River Ventures; one recent feather in his cap is the prescient decision to invest in Twitter. Gur addressed the notion of the sustainability of crowdsourcing from a broader perspective. Gur indicated that with any company, whether a crowdsourcing proposition or not, you have to look at what basic human need the company is fulfilling. Is it a top of the pyramid need? Entrepreneurs need to know how to tap into those needs. The challenge for entrepreneurs is to connect the dots between traffic and building a business with revenue. Many entrepreneurial teams cannot sort this out and that is why his company does not invest.
The underlying theme in the crowdsourcing world now, is that community is great, but monetization is better. Ah yes, the greatest question of Web 2.0
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2008-05-21 14:28:29
VLAB Recap #1- Entrepreneurship + Crowdsourcing
As mentioned before, Rick writing a series of posts regarding what was talked about at the VLAB conference held on Tuesday night on the topic of crowdsourcing. The first in the series focuses on Entrepreneurship and Crowdsourcing and profiles 3 of the companies that were there last night. The article profiles how Predictify's business model works, Cambrian House's change in strategy, and 8020 Publishing revolutionizing the publishing business.
Entrepreneurs and Crowdsourcing
Mike Agnich, Co-Founder and CTO of Predictify was a featured speaker and thus got 20 minutes of face time to introduce his company. Predictify is an interesting startup that provides a prediction platform that allows people to engage in the news through predictions as to the outcomes of upcoming events (i.e. winners of sports games). The participants go on record, build reputations and build an expert reputation.
There are four steps as to how Predictify works. In Step 1 “information seekers” pose deterministic questions about future events. “Deterministic” means that the questions must have a specific outcome when the event happens (i.e. who wins a game or an election). In Step 2 “predictors” research and discuss events, then submit predications about the outcome. In Step 3 information seekers get a robust, proprietary data set of predictions + demographics and markets engage large numbers of predictors in their message. Finally, in Step 4 predictors are scored and rewarded based on accuracy, building a reputation that determines future cash payouts.
Predictify offers two ways to engage consumers. First, they offer market research for a variety of groups, from charities to political groups. Second, they offer brand advertising by engaging consumers in a marketing message through a prediction advice. There are companies that have big budgets and care about their brand but people are not able to buy online (i.e. Coca Cola). Predictify provides a way to engage people in a company’s brand. For example, Coca Cola could ask the crowd whether a new flavour should be launched. Coca Cola will be more interested in the demographics of the respondents and the nature of the response, rather than seeing an immediate spike in sales.
Predictify has generated early traction. Over the past 4 ˝ months since founding the results are 250,000+ monthly uniques, 10,000+ daily predictions, 6 minute average time on site and more than 1 million total predictions. Agnich marveled that when people get online they want to defend their predictions and get involved in the discussion.
A second crowdpreneur, Mike Sikorsky, CEO, Cambrian House, was on the panel. Cambrian House bills itself as the home of crowdsourced software. The have a system called “Idea Warz” that allows the crowd to pick the best ideas. This approach solves a fundamental business problem. Sikorsky explained that with a previous software company he owned, he thought, ‘why don’t we build stuff that people actually want.’ He views crowdsourcing as a solution—you make the things that people clearly want. How do you do this? You tap into the wisdom
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2008-05-20 16:26:11
Crowdsourcing Interview on National Radio
Rick had an interview with Business for Breakfast yesterday morning to discuss his new book and related crowdsourcing topics.
You can listen to the interview here
Also, Rick is attending "The Rise of Crowdsourcing: Creative Wisdom of the Crowd" at MIT/Stanford's Venture Lab. Mike Sirkorsky and Jeff Howe will be headlining the event and we will be updating tomorrow morning with highlights as well as more insight later on in the week.
