Liveblogged by Guacira Naves (The Online Strategy House)
Shortly, we’ll be liveblogging Richard J. Goossen’s presentation on “Harnessing the power of a crowd”, CEO of MakeGood and author of “E-Preneur – From Wall Street to Wiki: Succeeding as a Crowdpreneur™ in the New Virtual Marketplace.”
If you’re livetweeting this event, feel free to use #IIMA in your updates.
Ean Jackson is introducing Richard Goossen and his book, “E-Preneur”. Richard is on the faculty of Trinity Western University. You may follow him on Twitter through @make_good.
A couple of things that Richard is pointing out on the outset: the world of the Internet is fascinating because things change so quickly. He’s done this same presentation in April, and Facebook had 100 million users. Now, it has 400 million. Eventhough things change, somethings stay the change, such as principles related to how innovation happens that have worked for hundreds of years.
Richard is referring to Peter Drucker (the father of entrepreneurship), and that his principles still apply nowadays.
Richard’s introduction to the context to the principle of crowdsourcing: he’s mentioning John Harrison, from England. He’s relevant because he was involved in the one of the original concepts of crowdsourcing, and in managing the principle of longitude. The parliament in England at the time used the principle of crowdsourcing to come up with a solution to the longitude problem, in 1714. At the time, Cambridge had been around for approximately 400 years, and yet, they couldn’t figure out the problem.
John Harrison was a cabinet maker in West Yorkshire, and sickly as a young lad. He retired as a millionaire after solving the issue regarding longitude by using crowdsourcing as the solution. So, if John Harrison was able to achieve such advances in a time where communication was so more challenging and technology was not where it is now, imagine what can be done nowadays.
Richard is now speaking about the Generational Test and is showing a slide of Bonanza as a generational test, and how, in conferences, most people 25 and under cannot make the reference. There’s a generational divide. Richard is showing a classification of Gen Z as the generation that comes after Gen Y (born after 1981, until now). Gen Z doesn’t even know a world where Facebook doesn’t exist. At the rate of how technology changes, generations should be classified in gaps of 5 years.
Global brands – circa 100 have taken hundreds of years to become established – such as Ford, etc. Now, in 1990s, brands like eBay (established in 95), Google (98) and Napster (99), the pace of change keeps going faster, are some of the top brands in the world, and have only been around during the last couple of decades. Wikipedia (2001), Facebook (2004), Twitter (2006) – all these brands are now so ubiquitous. This illustrates how quickly things change.
The New Virtual Marketplace
Going from Web 1.0 to Web 2.0
- Web 1.o is static, unidimensional – where as 2.0 includes user generated interface, where we’re co-creators.
- Network effects: the more connections there are, the more important a social network becomes.
- Long tail (expanded by Chris Anderson’s book). Most retailers can’t stock all the books that the audience is interested in, but Amazon is probably able to. Companies can now make $ off micro-niched markets.
- In the Cloud (pushed a lot by Google): your computer will not have any software on it. All programs you need will be online. Just log into the cloud and programs will be available. The concept of having a computer with your own program in it might be outdated for the next generation. Akin to “when I was your age, I had to walk 20 miles to go to school”.
All of this means a lot to today’s businesses.
The Madness of Crowds
One might think that the crowd is a mob. Key thing to think about is a point in “Extraordinary Popular Delusions and the Madness of Crowds”, relating to tulips. Tulips were a reference to a person’s worth at one time in Holland.
How do we get to the wisdom of the crowd? Can the crowd be wise? “Under the right circumstances, groups are smarter than the smarter people in them”. Three types of problems where the crowd wisdom can be helpful:
- Coordination problems
- Topics like “who will win the Superbowl”
- Cooperation problems – motivating people to fix the problem
“The wisdom of the crowd is best when individuals are acting separately, but addressing the same issue”. (paraphase from the book that Richard is referring to). We have been wired to be collectively smart. How this influences business:
- Open Innovation (for e.g., Firefox)
- Collective Intelligence (term used by Tim O’Reilly. There’s an interview w/ Tim in Richard’s book, e-Preneur).
- Crowdsourcing (coined by Jeff Howe, from Wired Magazine) – throwing a problem out to a group of people who will respond independently to the problem.
Crowd Power + entrepreneurial application = crowdpreneur
How do we harness crowd power for an entrepreneurial application?
Companies currently using crowd power: Cambrian House / VenCorps, Chaordix (the crowdsourcing engine for companies), Threadless, whereto you can “submit an idea for a chance at fame, friends and twenty-five hundred dollars!”. Simple concept: “when people tell you what they want, you give it to them”. Another example: NowPublic: the crowd determines what news will show on their website. It’s “Crowd Powered Media”.
Now, Richard is using Fluevog as an example of crowdpreneur & shoes – crowdsourced shoes! But you need to have a crowd to launch a project like this. It worked for Fluevog because of their number of followers. This ties back to John Harrison’s time in England, but technology allows for crowdsourcing to happen a lot faster. In addition, Fluevog can take this risk, because even if there weren’t crowdsourcing, they would still succeed.
The Crowdpreneur & Good – Make Good
- A community that is “good for business”
- Crowdsourced ideas for giving
- Changing the nature of doing good
It’s an unbiased way of advertising of what the company is doing that is good. This related to crowdsourcing because they’ve been looking at which causes should be supported by going to the wisdom of the crowd.
6 Principles of Crowd Power
- If want to be the room where the conversation takes place, give them good drinks!
- Vetting vs. Creating: there’s a big difference.
- Give credit to people who are the experts.
- Give people recognition
- Reward! Make it worth people’s while to participate. Now Public is an example.
- This is not 18th Century French Court! The language on a site, for example, should not sound like a brochure from an accounting firm, etc. Make it engaging!
Crowpreneur – Business Model
- It reduces risks
- It expands resources (NowPublic, for e.g.)
- Fosters Brand Loyalty (e.g. Fluevog). Now it’s no longer an unidimensional transaction. When there’s a sense of ownership, there’s a sense of loyalty
- Increase in revenue/sales (Threadless)
The Future of Crowdpreneur
- Shift Worldwide
- Cameesa – Crowdfunding Tees (www.cameesa.com). Different from Threadless, because through this site, the idea is that you put the concept out there, and people come together to make the shirt happen.
- www.Indiegogo.com – a collaborative way to fund ideas & innovation
“The future is here; it is just not evenly distributed yet”
J. Craig Ventor, Genomic Research Scientist, Web 2.0 Summit, October 2007