Innovation and change through the crowdPaul Dombowsky
11:00 - 11:30 Arrivals - Buffet Lunch - Networking11:30 - 11:40 Introductions / Thank You11:40 - 11:45 A word from our venue host - Tony Fish (AMF Ventures)11:45 - 12:50 Workshop - Paul Dombowsky from Ideavibes
Highlights from the Crowdconvention12:50 - 13:05 Tony Dhillon from GrowVC - overview of one, practical
example of crowdfunding13:05 - 13:25 Question & Answer Period13:25 - 13:35 Wrap-up
Agenda / Highlights
3
Thank you
3
Adam Cranfield - Consultant
Matt Ball – COO and Co-Founder
Our Venue Host
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Tony Fish
Where does innovation happen?
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• Cities• Neighbourhoods• Government Depts.• Small businesses• Educational System• Social System• F1000 Companies• Non-profits
Our Bias
2
We see the crowd as having the knowledge, the power, the desire, and the ability to help you make better decisions, solve problems, and fund change or innovation, if given the opportunity.
Overview
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DefinedAn engagement process whereby organizations seek input from either open or closed communities of people, either homogenous or not, to contribute ideas, solutions, or support in an open process whereby the elements of creativity, competition and campaigning are reinforced through social media to come up with more powerful ideas or solutions than could be obtained through other means.
Why Bother?Organizations have a difficult time engaging with their communities to strengthen their relationship and be citizen/crowd focused. Internal or external, the community has ideas that can be harnessed that come from diverse backgrounds, experiences and education.
Crowdsourcing
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Participation Happens – Civic or Brands
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Millennials (born ’91 and after)
Gen Y (born ’81-’91)
Gen X (born ’65-’80)
Boomers (born ’46-’64)
Civics (born ’45 or earlier)
Who is your crowd?
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Supporters
Prospects
S/E Investors
Mailing Lists
Supporters’ Network
Prospects’ Network
S/E’s Network
Mailing List’s Network
The crowd you know The crowd you don’t know
Social Media Makes the Connection
ExplicitExperts
Emergent Experts(community leaders, front
line stakeholders)
General Audience
Who is your crowd?
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CITY
EngagementTargets
Where Innovation / Crowdsourcing Fits
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Community
Open SpaceHow we gather
Social MediaHow we talk
LeadershipHow we inspire &
enable
Open Innovation
CrowdsourcingWhere ideas come from
Two Sides of Crowdsourcing
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Citizen EngagementCommunity / Civic / National
Market EngagementCustomers / Prospects / Partners
Where the conversations are happening?
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Official & Unofficial• Google Groups• Wiki’s• User Groups• Podcasts• Blogs• User Voice• Epinions• Cnet• Reviewsarena• Buzzillions• Tribe Smart
Why not tap into the conversations that are already happening?
Get the crowd working for you.
The Promise of Web2.0
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• Web 2.0 is about 2 way conversations
Web based services and communities characterised by participation, collaboration and sharing of information among users online. Web2.0 applications include wikis, crowdsourcing, blogs and social networking sites which encourage user-generated content (USG) and social interaction online.
Citizen Engagement
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I have a challenge
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• Land use determination – who drives the agenda and the conversation?
• Two approaches• Opportunity driven• Innovation driven
• The difference lies in where the ideas come from
• From the user or the customer• From the supplier
I have a challenge
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Opportunity Driven (supplier) Innovation Driven (customer)
City Posts Challenge
Crowdsourcing used to generate
ideas
Crowd determines their preference
Feasibility Review takes place
Developers invited to respond to specific RFP
City releases RFI
Developers Respond
Short list
Consultation
Study
Selection
Citizen Engagement in Web 2.0 for London 2.0
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• There are many one way conversations happening:• Blogs
• Square Mile Blogger• Londoniscool• London Underground Tube Diary• Dave Hill’s Politics Blog• London Standard• Telegraph Blog
• Podcasts• Dial-Eye-Lama• Editorial Intelligence
• Make no mistake – your citizens want to be involved intransforming the City of today to City 2.0.
• Where is the engagement? Where is the innovation happening?
Driven by Social Media Platforms
• Ideas and information produced by and on behalf of the citizen or the crowd
• Crowd is empowered to spark the innovation that will result in an improved approach to governance
• Move away from ‘Vending Machine Government’
• Responsibility is shared between citizens and staff
Government as a Platform
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Pay Taxes Expect Services Repeat
NYC Citizen Engagement Program
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NYC Example
San Francisco Engage4change Citizen Engagement Program(2 weeks)
• No. of Engagements = 2252• Referrals = 64% from Twitter• Cost = 500 ice cream cones ($1,000)• Humphry Slocombe’s Crowd
= 320,000 twitter followers and Facebook Friends
13
SF Example
Market Engagement
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The opening up of innovation to internal and external input for the development of products in various stages of the product development lifecycle.
Crowdsourcing can be part of an open innovation or social product management strategy.
What is Social Product Management?
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Product Management Lifecycle
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Vision/Need
Define Customer
Define Product
Develop Product
Test Product
Deliver Product
Refine Product
Crowdsource Option: features & functionality
Capture new customers with options & features they are looking for.
Crowdsource Testing – early adopters reward
Socializing requirements and prioritization gathering improves decision making
How Product Development Used to Happen
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Social Product Development/Open Innovation
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Build a Social Product Strategy
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• Reach customers & prospects where they live – join in the conversations that are happening already
• Capitalize on valuable customer and prospect insight• Develop a culture of collaboration• Implement the right social technology to get the job done• Communicate results and intentions and be open as
possible• Let conversations happen in the open• Be crowd friendly on an ongoing basis
Sources of Innovation
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Sources of Innovation
Internal R&D
Customers
Experts
PartnersSuppliers
Prospects
Other internal
team members
Does participation require a reward?
Do people contribute for the good of the brands they like?
How do you democratize the input?
Innovation: Crowdsourcing vs The Survey
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Crowdsourcing Surveys
• Lends itself to diversity of participation• Fewer barriers to participation• Drives innovation – new ideas from left
field that have merit• Easy to interpret – the crowd generally
makes things clear• Comments are focused
• Great for solidifying preconceived ideas or directions
• Hidden• Requires interpretation which is open
to biases by reviewers• Doesn’t encourage creativity
IdeaStorm was created to give a direct voice to Dell’s customers and an avenue to have online “brainstorm” sessions to allow them to share ideas and collaborate with one another and Dell. Their goal through IdeaStorm is to hear what new products or services you’d like to see Dell develop.
In almost three years, IdeaStorm has crossed the 10,000 idea mark and implemented nearly 400 ideas!
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Product Development - Branded
Quirky is an all in one product development shop for inventors.
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Product Development - Inventions
Ignite uses crowdsourcing for the source and crowd directed agenda at an upcoming event.
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Conference Agenda
According to Forrester Research (2010),71% of people say they trust the opinionsof family, friends and colleagues as a sourceof information on products and services.
Their crowd or tribe.
Where does trust sit?
7
It all starts with a Question or Problem
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• Needs to be:– Clear and compelling– Not leading– Allow for open innovation– Encourage participation– Allow for outliers to feel comfortable
The Appeal
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• Crowdsourcing surfaces new perspectives• Invites participation from nontraditional
sources • Infuses real energy into the process of generating ideas
and content• Empowers people when they feel their voice is being heard• Technology can enable participation by disenfranchised
(ie. PCs in libraries/shelters with citizen engagement campaigns)
• Builds engagement and relationships with new audiences
Crowdsourcing Pros and Cons
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PROS• Reduced time to market
• Reduced risk due to early customer input
• Increased customer lifecycle value
• Broader source of innovation
• Strengthened brand through participation
• Organizations can’t have all the brightest people on staff
• Ideas don’t have to be discovered by internal R&D teams to be capitalized upon
• Benefits from varied experiences
CONS• Less control
• Needed trust not easily come by in some organizations
• Requires community management
• Suffers if crowd is too narrow
• Disruptive to traditional timelines for product roll outs
• First attempt is risky until you understand your crowd
• Need to know your target audience
Things to Watch For
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• Excessive lobbying and promotion• Narrow crowds product narrow results• No follow-through causes creditability hit• If you say you are generating solutions for X, communicate
what happened and why• Broad ideation campaign descriptions will result in less focused
results BUT too narrow will restrict creativity• Dismissing ideas that seem far fetched• Ideation often requires refinement – understanding what your
crowd is saying by ‘x’
Crowdfunding (sometimes called crowd financing, crowd sourced capital, or street performer protocol) describes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations. Crowdfunding occurs for any variety of purposes, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns, to funding a startup company or small business[1] or creating free software.
What is Crowdfunding?
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Motivating Funding
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• Percentage of Ownership (regulatory backwater in most countries)
• Percentage of profits• Rewards (points or the CD / Movie)• Tax receipt
Models
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• The Arts• Kickstarter• IndieGoGo
• Start-ups• Peerbackers• GrowVC• Crowdforce• Ceedme• RocketHub• Fundedbyme
• Charities• Fundchange• Crowdrise
• Lending – Charities• Kiva
Example - Kickstarter
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Example - Fundchange
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Funding source for entrepreneurs
Revenue ShareDebtEquity
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Examples: Profunder (US only)
The Appeal
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• Uses social media to get the word out• Taps into your crowd and your crowd’s crowd
• It’s social – the crowd promotes projects it likes• It’s social – the crowd won’t promote projects that aren’t
shareable• Success comes to those that actively build a crowd
• A challenge for organizations new to social media• It’s the free market at work
• It’s the free market at work• Build stickiness to the project
• Need to pay attention to write-up to inspire funders
Benefits & Challenges
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Things to keep in mind: • Crowdfunding success comes quickest to organizations that are social –
media-aware and engaged. If your organization is not yet social media-enabled, it will take time and human and financial resources to do so.
• Because your efforts are only as good as the crowd you are able to mobilize to your cause, it makes sense that your organization strategically manages and promotes its brand online.
• Make sure your target audience is online and will give online• If you opt to post your projects on established crowdfunding sites, do your
homework – be careful of the company you keep.
Integrating Crowdfunding into Your Organization
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How an Engagement Platform Works
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A Platform Could Help
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• Easy to set-up and deploy• Able to run multiple campaigns at once• Can run Crowdsourcing and Crowdfunding Campaigns• Build stickiness and community around those that engage
(sign-in and see past votes, comments, ideas)• Hosted solution (in Canada)• Able to be implemented on existing website or set-up in new,
destination site• Social Media connected• One of few sub $1000/month solutions
Ideavibes Citizen Engagement Platform
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How Does Ideavibes Compare?
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• Enterprise Collaboration or Idea Management– Large – multi-functioning platforms for Idea Management– Integrated into change management and process improvement
lifecycles– Chaordix, Bright Idea, etc.
• Middle-tier Focused Crowdsourcing Apps– Purpose-built customizable apps focused on crowdsourcing– Narrow or wide focus– Multiple crowdsourcing and crowdfunding campaigns– Ideavibes, Spigit– Note – Ideavibes is only white label crowdfunding platform available
• Ad-hoc website or Social Media widgets– Developed by web teams with basic functionality– Functionality as opposed to business process driven
Thank youPaul Dombowsky | 613.878.1681 | [email protected]
www.ideavibes.com
Everyone funding startups
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Grow VCEveryone Funding Startups
June 1, 2011
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Vision The next Silicon Valley is not a location, it is a platform
and community on the Internet
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MissionProvide the platform, service tool kit and partner network
for the Virtual Silicon Valley
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Investment models
www.growvc.com56
1. Startup selects the funding target
2. Members make micro-investments ($20, $50 or $100)
3. The funding target is divided into 10 parts; startups get money always when a 1/10 is full
4. Standard GrowVC investment agreement
5. GrowVC manages the investment
1. Startup selects the funding target
2. Members make investment proposals
3. Startup can accept or reject
4. Local law firm makes the investment agreement based on standard Term Sheet
5. The investor manages the investment
1. Startup makes an offer: competence, targets (hours/achievements), ownership model to calculate compensation
2. An expert makes a proposal
3. Startup can accept or reject the proposal
4. Standard work investment agreement
5. Startup manages work and the expert the investment
1. Community Fund 2. Private Investment 3. Work Investment
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WE HAVE A DREAM:more equal opportunities,
where entrepreneursand ordinary people unite
to accelerate innovation
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How to democratize startupinvestments: examples
A company like Facebook A company collects totally $20M and achieves $10B valuation If the company has 20 equal investors, each of them invested $1M
and gets $500M in the exit If the company has 100,000 investors, each of them invested $200
and gets $100,000 in the exit
A more typical startup A company collects totally $3M and achieves $100M valuation If the company has 3 equal investors, each of them invested $1M and
gets $33M in the exit If the company has 10,000 investors, each of them invested $300
and gets $10,000 in the exit
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Which model has greater influence on people, business and economy
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globaltransparent
opencollaborative
efficient
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1. P2P and Crowd-fundingvia Community Fund investments
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2. Match-making and negotiation tools
for Private investments
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3. Reward professionalsWork investment scheme
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Browse investments when you have time
www.growvc.com63
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The Grow VC platform enablesmany models, example
www.growvc.com64
• Direct investments
• Community micro-
investments• Support for
investment process and
materialsCo-investors
Private investments
Community FundMicro-investments
Start-upXXX
Start-upYYY
Start-upZZZ
Investment decisions:• Community
• Co-investors have automated model with veto right
Investment process:Managed by community
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www.growvc.com65
Initial growth: customer adoption
The first full service was launched on February 15, 2010
Statistics on April15, 2011: Registered users: 8,256 Startups, total: 1,986 Startups, open funding round: 98 Total available capital: USD 16,668,175 Total requested capital: USD 20,021,502 Average monthly growth: over 400 new members a month
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First local services:India and China
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Top level local local teams: including VC and finance professionals,serial-entrepreneurs. Localized for the local needs and ecosystem.
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Tony DhillonHead of European [email protected] (UK): +44 7961 848 586Skype: tony.dhillon10 - Twitter:@tdhillon10
www.growvc.comTwitter: @growvc