Crowdsourcing: It’s about disruptive business models

By A. Asohan March 22, 2013

Your customers are not just your target market; they can also be your collaborators
Crowdsourcing is disrupting whole industries, and Asia is ripe for it

Crowdsourcing: It’s about disruptive business models CROWDSOURCING has brought the sexy back to the Internet, with a large number of start-ups in recent years playing in that space, whether they work on harnessing the “wisdom of crowds” or the financial heft of the masses, with crowd-funding sites like Kickstarter or Malaysia’s own PitchIN.

But crowdsourcing is not an industry in itself – it’s a practice that is enabling and disrupting industries. At least that’s how Epirot Ludvik Nekaj (pic) sees it.

And he knows a little about this, having formed Ludvik + Partners, a New York-based boutique virtual ad agency built on a 100% crowdsourcing model, way back in 2008.

“The Internet that we knew – where it was about buying and selling goods, sharing information and electronic files –has been transformed into a co-creation platform,” he says, speaking to Digital News Asia (DNA) in Kuala Lumpur recently. “Crowdsourcing is built on three components – technology in general, the Internet and social networking.”

He says that about a fortnight before our meeting, he was participated at an event, and the speaker before him discussed the sharing economy and how people use a power drill an average of seven times only.

“So people are now renting their drills for a nominal sum. If you’re a maker of such products, your whole business is based on people buying drills; your whole business model is about to change, disruptively,” Nekaj says. “Your market is no longer people buying drills; it’s people sharing drills,

“This is very disruptive, and if you don’t get on board with it and figure out how to deal with it, you’re going to be under attack.”

Another example of a start-up disrupting an established industry is Airbnb, which provides a platform for individuals to rent unoccupied living space and other short-term lodging to others.

“It’s very important to understand the impact of the sharing economy, and how fast it is coming,” Nekaj says. “Whole industries are being transformed. Hotels have to think about how Airbnb is going to affect their business.”

Another area which is going to be transformed is product development. Nekaj points to the success of Lego when it opened up its Japanese crowdsourcing platform CUUSOO to an international audience, inviting people to vote for new product designs. More importantly, they can also submit their own projects and collaborate with other members of the CUUSOO community.

Nekaj laments the fact that so many companies are still doing product development the same they did it in the old days – cut off in their labs, with perhaps a focus group or two to guide them.

“Don’t think of your customers as only your target market, think of them as your collaborators,” he says. “The focus group is dead.”

However, he cautions that crowdsourcing shouldn’t be limited to only product development or marketing, but has to become part of the organizational DNA.

“If you look at your typical CEO, he has to look at the bottom-line, and to do that, he should think about not wasting his resources, and about how to innovate,” says Nekaj, “And today, you don’t innovate within four walls -- you have to open up.”

Crowdsourcing Week

Crowdsourcing: It’s about disruptive business models It is these issues, and the potential of crowdsourcing to disrupt or enable whole industries, that led Nekaj and his team to organize Crowdsourcing Week, which they are touting as the first-ever global event on crowdsourcing, open innovation and crowd-funding, to be held in Singapore from June 3-7.

More than 1,200 people are expected for the conference, which is being supported by crowdsourcing pioneers such as 99designs, Razoo, ImageBrief, Chaordix, Zooppa, eYeka, Local Motors and others, as well as various Singapore government agencies.

“It is five days of curated events,” says Nekaj, also the founder and chief executive officer Crowdsourcing Week. “We will have talks from the government side of things, on marketing approaches, and how what it promises for industries and fields as diverse as advertising, design, media, healthcare, science and technology, entertainment and product development.”

“Today you have products like Local Motors (pic above) that enable car manufacturers to engage industrial designers and automotive engineers from anywhere in the world to co-create a car.

“This is simply amazing; it’s mindboggling,” he adds “But these opportunities exist in many other fields, including graphic design, imagery and photography, healthcare and others.”

Nekaj says he and his team chose Singapore because they see a really untapped market in Asia.

“Given the market size here and what crowdsourcing can bring to organizations, government and start-ups, we have to look at how this convergence -- where technology meets social media meets the Internet – is going to affect the future workforce and the new generation of decision makers.

“This is coming,” he adds. “We all have to think about disruptive business models, because this is where the next phase comes in. The opportunities that exist now did not exist even in the minds of the people now doing it a mere five years ago.”

Philip Behnke, head of communications for Crowdsourcing Week, notes that we are now seeing a whole generation of young workers who were born to this.

“The young people were born into his environment, they understand it and are not scared of it,” he says.

When it comes to which markets in Asia seem ripe for crowdsourcing to take off, Nekaj notes that crowdsourcing has become so prevalent in China that they have come up with their own term for it, witkey, largely revolving around procurement and crowd-funding.

“India has huge potential,” he adds. Having been an outsourcing hub for so long, India is now leveraging new technology to bring together the freelancers of the world to create a platform that allows companies and individuals to be part of a community focused on micro-sourcing services.

“India is a very big market, and consumers are participating,” he says.

When asked what he hopes to achieve with Crowdsourcing Week, Nekaj says, “I think we would be able to measure success based on the feedback we get during and after the conference.”

“I believe we would have succeeded if the audience leaves with very disruptive thinking,” he adds.

Coming on Monday: The building blocks for a successful crowd-funding campaign and the Start-up Challenge