Working the crowd – it could be your greatest asset
February 4, 2015
Tim Wright, Director of twintangibles highlights that knowing how to access, manage and create income from “crowdassets” are increasingly important business skills.
Crowdfunding is increasingly becoming the financing route of choice. The mix of equity, reward and debt based options make it suitable for a wide range of businesses from startup to the growing and more mature. And with the sums available expanding rapidly crowdfunding is stepping in to fill a demand and gap left by cautious banks and a burgeoning entrepreneurial startup scene. On the supply side the shortage of retail investor opportunities is encouraging a democratised investment community to seek out new pastures. With Government and institutions like the Glasgow Chamber of Commerce now engaging with crowdfunding alongside the public- the banks and traditional finance sector are finally beginning to see this as something they need to engage with – it’s not going away.
But crowdfunding is only one example of how looking out to the crowd is increasingly transforming how we can, and will increasingly, do business. So becoming comfortable with the notion that value exists outside of the boundaries of the organisation as well as within, and knowing how to access, manage and create income from those “crowdassets” are increasingly important business skills.
Collaboration is made ever simpler with advent of low cost cloud based shared resources and communication spaces. Cooperative group purchasing and consortia bidding are popular examples of how effective and valuable relatively simple collaborative working can be. But crowdsourcing and open innovation models take the notion of looking outward and harnessing the crowd to an entirely different level.
Lego transformed a tiring product set when they happened upon their user community hacking and innovating their bricks better than their own R&D was able to. Instead of taking an adversarial stance they embraced the opportunity with Mindstorms and build upon that success with Lego Designed By Me. Their performance since then is testament to the wisdom of that crowd oriented choice.
Platforms like Innocentive, emerging from Eli Lilly, offer forums to run grand challenges and competition based problem solving, bringing together those in need of an answer with a widely dispersed but validated crowd of solvers.
For some firms open innovation and crowdsourced methods offer the prospect of trawling and unlocking extensive patent portfolios that would otherwise remain locked in a dusty and costly archive. This might be for socially responsible and humanitarian causes as is the case for some pharmaceutical firms, or simply to drive an innovation agenda as GE are working with Quirky on their Inspiration platform, alternatively it might be the way Tesla have opened their patent portfolio in an attempt to bring a more rapid development in their sector through co innovation.
Whatever it is this type of innovation can create sustained value and, for bigger brands, many of these activities will form spin outs and skunk works. Do not be surprised that such open minded companies see crowdfunding as a core resource for operationalising many of these micro projects. But the principles apply for the ambitious and outwardly focused smaller firm just as much as they do for big brands.
But the dynamics and scope of creating value in the crowd asset space are wide and so we can go beyond funding, collaboration and innovation to embrace activities as diverse as viral marketing, big data sources for deep insight, or even into collaborative consumption models for extended and mutually beneficial service offerings. So it is that Patagonia reach out to a wider crowd than their immediate customers to create deep product insight, brand loyalty and an aspirational retail model through developing a secondary market for their brand by partnership with eBay to permit existing customers to sell Patagonia second hand. Amazon constantly seeks more efficient fulfilment services by using unconventional delivery partners like using corner shops as delivery and collection infrastructure. Closer to home Glasgow based Desk Union provide mutually beneficial high resource utilisation and entrepreneurial desk space through its collaborative platform.
The crowd then is a source of innovation to resolve business problems, novel opportunity for reengineering business models, and new sources of revenue and value. Learning how to unlock that crowdasset will be the defining key to success in modern business.
Keep your eyes peeled for our upcoming event looking at sources of funding for the Creative Industries. For more information, check out the events section of our website or sign up for our newsletter to keep up-to-date with news and events in the community.