Could Crowdfunding be the Future of New Project Development?

Reading this article reminds us that the jump from concepting and ideation to actual production is something that can be very difficult. Could crowdfunding be a possible solution to this more difficult problem of funding ideas?

Traditionally, design companies show new product development workflow as something like this.

With design concepting and ideation on the left progressively working towards a proof of concept and prototype, then finally flowing through to production and distribution. All very simple when you know how. Of course this is the idealized view of product development and it requires time and effort, not to mention money to make this process work.

The reality is as the article suggests more like this.

Where the concepting and ideation are can be quick and full of possibilities then the reality of having to make and distribute and getting investors involved can change the new products possibility of surviving in the marketplace. Ultimately you have to get to a point in the product development where considerations about marketing and product placement occur. To get people to buy your product thoughts on differentiation from competition and potential rivals has to occur. Most likely you will need some kind of advertising and marketing effort to make that happen. When should these have been considered? Probably quite early on in the product life-cycle. Then the questions of manufacturing and shipping to consumers has to discussed and solved. Apple hasn't just been innovative in their products but also in the infrastructures that support the making and shipping of these items. Innovation si more than a good idea and great product.

So this leads onto the focus of the article, for the majority of start ups and small businesses that have lower budgets and not the reach and resources for these systems to be put in place, how can they solve these issues without help? Could a form of crowdsourcing that involves investments from a crowd, called crowdfunding help?

Firstly there are 2 important questions to ask yourself.

1. Do I have the time to make this commitment?
2. Do I want to develop this publicly

These questions of course have huge impacts on whether you should begin a crowdfunded project.

Certainly crowdfunding has been shown to work in gathering money for projects\ that seem worthwhile. One attempt at this that has proven successful has been the work by Grameen bank, an attempt at helping the third World at getting micro financial help for individual projects that can help those in extreme poverty.

So how might this fit into the building of an idea at what stage should you seek funding from other people. The website suggests getting people involved at the proof of concept stage, of course this makes sense that people want to see at least something working in action rather than pure speculation. Then the idea has already started to prove at least it can be made. The speculation of course might still be in the interest of the public at large and it's possibility of future growth and success. But then that is what investment is all about, speculation on future growth.

There are already many sites forming on this concept such as kickstarter and IndieGoGo, they are proving out the model and already have many projects looking for crowd funding. Time will tell how successful these become. but already signs are looking positive for this new venture into funding. Kickstarter has already as of 2010, had 319 successful projects and raised over $9.1 Million in funding these efforts. Top catagories seem to be towards film and music efforts with design making a growth sector in third. The reason suggested is that designer primarily spend their time working on projects for others and are not as used to pitching their ideas for themselves.

Noted reasons for Kickstarters crowdsourcing success are suggested to be:

1. They filter which projects get posted to the crowd -
makes them interesting and worthwhile

2. You only get funding if you meet the threshold of prior to launching your project
keeps projects realistic and encourages crowd participation in promotion as projects get close to reaching their goals

3. Easy to find and promote projects
Easy is always good in these efforts, as it makes it easier for anyone to get involved.

4. Its success has made it more successful
As Malcolm Gladwell would suggest reaching a tipping point in success will only lead to more interest by others.

5. It's not about the money
Like most crowdsourcing efforts the crowd is most motivated by personal pet projects and interests.

You can find out more information about crowdsourcing in a previous post here.

Branding the faithful

Being an athlete, amateur or professional, requires a dedication and focus that comes from within, it drives the individual to motivate themselves and stretch their abilities, they must push themselves to the limit. Many give up and only the faithful few make it to the heights of success and achieve the status of champion. At least that is what Nike would like you to think as you aspire to buy a pair of their training shoes. This is the message that Nike preaches to the masses of people that have any thoughts about sports and athletic behavior. The image that Nike wants in your mind as you struggle to make it through another work out is that you are some how empowered by their clothing or shoes to be part of that group of elite professionals that do this everyday come rain or shine. They tell you to "Just do it.", don't waste time thinking about it. They imply that they have already found the answer to the needs that you are looking for, buy our branded goods and you will become one of our champions. They play to your inner self and the story that you tell yourself that somehow by having bought a new pair of running shoes that you are now ready to begin working out and getting fitter. They tell you that you too can become a brand champion that is worthy of their merchandise.



To become a brand champion, requires a level of faith in the messages you are seeing, hearing and reading, it requires you to have a belief in the brand and the gospels of Nike. Nike is not of course alone in their faith building exercises and ardent followers. Many brands that want to make a lasting impression and get to some of the core ideas of being human, touch us where we are most inspired in the faith that we can somehow be better people and fill our lives with meaning. This is what Maslow, would consider at the top of his human needs pyramid, a need for fulfillment and transcendence to be a better person and higher state of being. The power of building a brand is that at some level you transcend the product and service to become almost a religion that has followers and the faithful that are willing to go where you ask them and preach as you tell them. Branding already uses many religious motifs to help them persuade the consumers to become one of the faithful. Icons and logos are powerful badges that show others the brand you follow. Stories and fables are the advertising way to tell the brand messages in compelling ways. They even create "churches" now to worship their gods and icons, the rise of branded retail stores has shown that the parallels to religion are not just a coincidence, these huge corporations and the brands they own are looking for followers and  evangelists to grow the faith. They want to play an important part in your life and mind, they want to be part of what makes you feel like you. Once they get to that place then branding ceases to be a marketing goal but becomes more of a community and one that you are willing to fight for and defend, without prompting from the originators of the brand.

Martin Lindstrom, author of Brandwashed, suggests that religion and branding have common traits on their followers. His list is outlined below, I have added my own commentary to how I think they work for branding.

1. A clear vision

Having a clear vision, is the same as having a clear message, to promote the brand as having particular beliefs and goals, makes alignment to the brand easier. People want to know if the brand stands for the same things they do, this is achieved with a clear consistent vision.

2. A sense of belonging

This is a typical theme in all branding efforts to create a sense of belonging to a larger group of like minded followers. Creating a sense of community can empower the brand to have those that are inside the group and those that are outside. Creating brand evangelists can be the difference between success and failure when competition shows up in the market place.

3. A common enemy

This is an interesting observation that sometimes a brand needs an enemy or rival, to show comparison or rally like minded people together against a common foe. The classic example is Coke versus Pepsi, they seem to need each other to be able to better inspire followers and faithful to defend their brand. The enemy is a good use way to build loyal followers, because the sense of winning battles and time spent fighting can help build a stronger community spirit.

4. Sensory appeal

Experiences make something go from ordinary to extraordinary. The complete experience of being somewhere or doing something can make the difference of our memory recall of that experience later. They raise our emotional states and if we associate a brand with something positive we are doing or feeling then the brand gains a more valuable meaning to us, as it has associated memories to us that are positive.

5. Storytelling

This can be done in many forms today, across many media. Interestingly word of mouth is still one of the most powerful way to send and receive information from another person. Tying a brand to a story helps not only in the telling of that information to another person but also fills the brand with emotion and interpretation that the consumer can add in their own voice.

5. Grandeur

Big and powerful is an image that can work for some brands, the ability to overwhelm the individual with size and wealth can be a positive lasting experience. The really interesting use of this concept is in the physical representation of the brand, building the physical space for the brand to live and breath for a consumer. We work hard to make environments that inspire us, so do brands.

6. Evangelism

Having a loyal following that promotes and lives for the brand is a huge asset. Encouraging people to see themselves as dedicated and faithful, among the chosen few is going to create huge brand value. These evangelists will defend their beliefs and your brand with passion that cannot be bought with money. These evangelists are going to have a more powerful sway over the undecided because of their enthusiasm and apparent enjoyment from being inside the brand circle. These people can become converters to the faith of the brand. 

7. Symbols

Symbols are all part of a mythology that surrounds branding, a logo can be empty of meaning or fully loaded, depending on the branding and investment to fill the narrative of the individual involved with the brand.

8. Rituals
Rituals are part of the mythology, the narrative that gives meaning to things. It can also help in the establishment of social groups and insider knowledge. These can lead to avid brand followers, that feel that they are part of something bigger and are somehow more involved than ordinary people.

Some other branding considerations that could be seen as influential in making people faithful to a brand are:

1. Authenticity

To be authentic requires being real, relevant, have rituals and be part of a story. Companies need to promote and behave authentically to remove doubt around the brand and messaging.

2. Consistency

People like to be consistent not only in what they do but in what they believe and follow. The brand should be consistent so that people can align with themselves and feel consistent in their choices.

3. Perfection

The aim for perfection is part of the concept of self fulfillment and becoming a better individual by what we do and how we act. Perfection can not really be attained but branding most promotes how it can help achieve those levels we seek.

8. Mystery

Mystery helps in allowing the individual to tell a story to themselves about why one thing to them is more important than another. It is the empty space that allow an individual to fill it with their meaning.

These considerations in brand building are powerful motivators to get people involved in the faith of a company, they are tried and tested ways that many religious movements have relied on for centuries. They work and have proven themselves and long lasting. The warning though is that unlike religion the aims of the founders may not be so honest and dedicated to a greater cause than making profits and growing a company. The most valuable advice in this list is to maybe be authentic, if followers are to align with the brand, make sure that they are very clear on the goals and real beliefs of the company that created it. The find out that all that you believe in is actually false can be very consequential to the brand, and suddenly act as a destructive force to bring the brand to it's knees. 

Bringing the conversation to a close, Nike has always promoted itself as an athletic brand, and really there is nothing wrong with promoting healthy living and getting up and doing something rather than nothing. I don't necessarily believe in the Nike brand, but I do like some of it's ideals and ideas. And I think that is how to approach many things, you don't have to be a loyal follower, or sheep with a crowd, sometimes it pays to follow what you believe and what you want to achieve, if the crowd isn't to your liking jump to another or start your own. The point is nothing should be followed blindly, and you have the power to chose, don't let what people or companies tell you dictate you belief, discover that for yourself.

Retailing an Experience

In an article found here IDEO turns it's focus on retail and the future of the physical store. So much talk these days is about how brick and mortar stores are disappearing and becoming obsolete with the rising of internet purchases and consumer shopping habits. As this article suggests in is probably very premature to assume that that consumers are completely over physical stores and transactions. People like to connect with people and from a branding stand point and engagement with consumers the store still leads the way, and probably won't be replaced anytime soon with a digital alternative. So what things should be considerations for the stores of the future? This the article goes on the explain, is where a store needs to evolve to the new needs and expectations of consumers.

Considerations include.

Design stores that are more than places to buy stuff.
People still visit stores, people still go out at weekends and shop around, even if they ultimately do not buy from the store they are wandering and touching real products. Stores can use this to their advantage, making casual browsing, enjoyable, the goal should be brand experience.
Employ brand enthusiasts
Today more than ever, people share their opinions about things they buy, people love reviews and ratings. Stores should be hiring brand enthusiasts that are like evangelists to the products. These are people that care about the products they sell and want others to join their joy in ownership.
Target existing users of your product
People that are already consumers of your brand, have most likely bought into the dream and vision. Building in-store experiences that focus on education, trials and membership to these users of your product are going to build longer term relationships, and advocates. It's much more about open relationships than before.
Make shops into R&D labs
If one thing differentiates a physical store from a digital store it's the physical face-time with the consumers. This is an opportunity to speak directly with people and gauge honest feedback on new initiatives or products. This allows the physical space to become a feedback loop directly with customers.

Nice article and some interesting value adds to physical stores of the future. The internet has certainly empowered the consumer, but really people still want those physical interactions and feelings of belonging that brands promote, these ideas are definitely inline with those thoughts. These future stores could add huge brand value and loyalty, and I think Apple stores already show the way and how well it works.

Are we domesticating ourselves?

Whilst driving through Seattle, I was listening to an interesting broadcast from a local radio station (88.1 KPLU), in which they were discussing an experiment that was still going on in Russia that had been started over 50 years ago. Dmitri Belyeaev, a Russian scientist had setup a breeding project in 1959 to see how the domestication of dogs may have occurred, from Wolves. They went on to describe the experiment and some of the interesting results, of the domestication of Siberian foxes over 50 years. More about the experiment can be read here. I do not necessarily agree with the experiment but, the results are facinating

What is most fascinating to me about this experiment was less that indeed the foxes could be bred to be domesticated and not afraid of people, but I was intrigued by the results of what it had done to the foxes as a result of the domestication. It seems that as a result of the selective breeding of the foxes that exhibited the correct responses to good behavior, that other aspects of their physiology altered too. Their teeth became smaller, their ears were more droopy (less cartilage), their tails less straight and their bones smaller and lighter. It seems that the selective breeding had focused not only the desired character traits but has also funneled certain genetic mutations that altered their appearance and structure. Through the filtering of good behavior and removal of the otherwise necessary aggressive traits that would keep them alive in the wild the foxes had begun to alter to suit their new temperament. So of course this is very interesting, from a scientific stand, and definitely goes along way to explain how Wolves may have become domestic dogs. The next thing the talk moved on to thinking about humans and our own evolution. This was when I started to get interested what was proposed.

The premise was put forward that humans too have through group behavior and social exchange actually evolved themselves and arguably domesticated themselves. The thought is that once we were like apes in small groups and the strongest mostly survived and a strict hierarchy could be seen. Then as time moved on and we became wanders and probably grew larger groups we had more people fighting for the top spots, soon it was necessary for progress to get along the friendlier males would have more success with females than the fighters and aggressive males. Jump forward a few thousand years and today we see that we are in large groups and in very close proximity and getting along is a very valuable trait to have to survive, aggression will only get you so far. They mentioned how if you placed 100 chimps on a long haul flight across the Atlantic not many would survive they would definitely kill each other, being so close for so long. We however, have learnt to get along and can tolerate such closeness and are generally friendly. Does this mean as the radio show suggests that we have domesticated ourselves into a more passive and friendly animal just like the Siberian Foxes. Certain it is suggested that we have altered genetically in a similar way, we have smaller bones, smaller teeth than our ancestors. The concept of become a domesticated species is interesting to me, not so much that the idea of a "pet" human, but because it shows that as we grow as a society and population that lives in closer and closer proximity, we are having to alter how we react and respond to each other on a daily basis and it seems it would be fair to suggest that we are altering not only our personalities but potentially our physiology as well.

Of course this may all be an interesting parallel and really we of course are far more complex creatures with our ability to rationalize, but none the less it was an interesting radio talk show. As a follow up I discovered there is a book on the subject by Peter J Wilson called interestingly enough "The domestication of the Human Species", it is now waiting in my Amazon wishlist.

Successful Crowdsourcing Requirements

As part of a project I am working on at the moment I am thinking carefully about how it might benefit from crowdsourcing the content for the site. I can't talk too much about the project right now, but I can share my discoveries about crowdsourcing so far. As I mentioned in a previous post I recently read the book by Jeff Howe, and in a previous post I had found a few key motivators to crowdsourcing on the web. Jeff, kindly puts a summary at the end of his book that extends this list, with the following observations that he made on crowsourcing and what makes it work. His key discoveries for successful crowdsourcing include:

Picking the right model. 

As outlined in his book, which I don't plan to repeat fully here I suggest you buy and read it yourself, he talks about the different models of crowdsourcing that exist, including crowd creation, collective intelligence and crowd voting. Each of these has different goals and needs from the crowd, and some projects require one of these approaches and some require all three.

Pick the Right Crowd.

Picking the right group of minds to tap into is of course important to any endeavor as you want to have the product of their efforts to be inline with your needs and goals.

Offer the right incentives.

offering the right incentives of course falls inline with the right crowd and right model. Some crowds are inspired and work to impress peers and some work to make money, each crowd can be motivated by different things, so it is important to know what motivates your crowd, and allow those motivations to shine and work in your site.

Don't assume the crowd is your new workforce.

It seems that it is easy to fall into the mindset that crowdsourcing is going to save you time and effort and reduce the need for fulltime employees. But as Jeff explains, often the content they produce needs guidance, and filtering, by someone professional in the area of the crowds domain. Crowds also don't always show loyality if they feel cheated and any attempt to think of them as substitute works will back fire.

Dumbness of crowds or the benevolent dictator

This is an extension of the previous principle, crowds are not always very good at self organizing and often need guidance from a guide, or principle that helps focus the crowds efforts.

Keep it simple

The way to think about crowds is to see them as many different people with many different skills and more importantly with various amounts of time available to work on their projects. So as such breaking problems or tasks that are of different sizes ideally smaller the better, is more likely to yield results. Those that have an hour to spare can use it, and those that have 5 mins can also take part in the collaborative efforts.

Sturgeons Law

This is simply that most of the content(+90%) that people of such varing degrees of ability will produce will be less than satisfactory. But 10% will be amazing and above average. The task of course is to get as many people invloved as possible to increase the amount of great work produced.

10% Rule to aid Sturgeons Law

Allow the crowd to sort through the content themselves voting the best up to the top and allowing the bad items to fall to the bottom of the fish tank. The 10% concept comes from the view, of Bradley Horowitz that approximately 1% of a crowd produces something, 10% votes and comments on it and 90% will just consume it. So the 10% is a valuable asset to getting the best of the crowd.

The community is always right.

This simply suggests that the community can be guided, but in the end you are a follower to the crowds wants and desires. After all, if the community feels ignored or pushed, then they will just leave for something else.

Ask what you can do for the crowd.

It is important for crowd to be considered as individual people, they are going to have needs, wants and desires. Your job as a crowdsorcerer  is to put in place those things that address the crowds Maslow needs, if you want to really see success then work with the community you create.

So there you have it a nice summary of some considerations for crowdsourcing efforts. I have already begun to rethink how my project might benefit from some of this advice. Time will tell how successful it becomes.