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Crowdsourcing and
Crowdfunding
Paul Dombowsky – January 25, 2012

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Workshop Overview
Time: 12:00 to 2:00
Speaker: Paul Dombowsky
Founder and ceo of Ideavibes / Fundchange
Agenda: • Defining Crowdsourcing and Crowdfunding
• How to tap into the conversations that are already going on to make
better decisions?
• Making crowdsourcing pay for itself - the business case.
• What are the restrictions around crowdfunding things like bands,
businesses, charities, etc.?
• Best practices and how to implement in your organization. How to
overcome some of the negatives?
• How social media fits into the success of crowdsourcing and
crowdfunding?
• What part does social media play?
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Opening
“…the world is becoming too fast, too complex and too
networked for any organization to have all the answers inside.”
Yochai Benkler, Yale University from the Wealth of Networks
“Peer production is about more than sitting
down and having a nice conversation… Its about
harnessing a new mode of production to take
innovation and wealth creation to new levels.”
Eric Schmidt, Google
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CROWDSOURCING
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Crowdsourcing
Defined
An 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 crowd focused. Internal or external, the
community has ideas that can be harnessed that come from diverse
backgrounds, experiences and education.
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When does Crowdsourcing Work?
• When looking for expertise from a range of sources.
• When funds and/or time are limited.
• When your target audience is largely online.
BMW’s Virtual Innovation Agency
Received over 4000 ideas within 7 days for
products and designs at minimal cost
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Why Social Matters?
According to Forrester Research (2010),
71% of people say they trust the opinions of family,
friends and colleagues (their crowd or their tribe) as
a source of information on products and services.
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Where the conversations are happening?
Official & Unofficial
• Facebook
• Twitter
• Google Groups Why not tap into the
• Forums conversations that are
• Wiki’s already happening?
• User Groups
• Podcasts Get the crowd
• Blogs working for you.
• User Voice
• Epinions
• Cnet
• Reviewsarena
• Buzzillions
• Tribe Smart
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Where the crowd comes from
Internal Does participation require
R&D a reward?
Other
internal
Customers
team Do people contribute for
members
the good of the brands
they like?
Sources of
Innovation
How do you democratize
Prospects Experts
the input?
Suppliers Partners
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The Emerging Expert
Internal
Experts
Emergent Experts
(online community leaders,
Engagement product advocates)
Targets
Everyone Else
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Where Innovation / Crowdsourcing Fits
Open Space
How we gather
Open
Innovation Social Media
Crowdsourcing Community How we talk
Where ideas come from
Leadership
How we inspire &
enable
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Growing Online Participation
Millennials (born ’91 and after)
Gen Y (born ’81-’91)
Gen X (born ’65-’80)
Boomers (born ’46-’64)
Civics (born ’45 or earlier)
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Product or Policy Roadmap
Discovery Exploration Scoping
Crowdsourcing or
Testing Development Build Biz Case
Ideation
Launch Discovery…
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The Appeal
• Crowdsourcing surfaces new perspectives
• Invites participation from nontraditional
sources
• Infuses real energy into the process of generating ideas
• Empowers people when they feel their voice is being heard
• Technology can enable participation by disenfranchised
(ie. PCs in libraries can help those not connected at home)
• Builds engagement and relationships with new audiences
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Example 1: Salesforce
What do your current
customers want to see on
your roadmap?
What features are needed
to turn prospects into
customers?
Democracy?
1 vote = 1 customer
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Example 2: Dell
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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Example 3: Quirky
Quirky is an all in one
product development
shop for inventors.
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Example 4: Threadless
Threadless’ business
model is social product
development and they run
regular campaigns to
select designs that are
then produced and sold to
a ready-made market that
participated in the product
selection.
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Example 5: Product Selection by the Crowd
Starbucks uses the same platform as Dell and
Salesforce.com for their social product development.
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Example 6: Open Innovation with Citizens
City of Ottawa
Have a Say Sustainability
Campaign
• No. of Engagements = 6700
• Goal: 1500
• Drivers: Twitter, Facebook, Media
Event (related)
• Number of ideas: 200
• English and French
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Example 7: Citizen Engagement
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
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Questions?
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CROWDFUNDING
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Crowdfunding
Defined
A type of crowdsourcing where the efforts of the crowd are focused on raising
funds for worthy causes, start-ups, community projects, the arts, etc. The
crowd also plays an integral role in spreading the word about the funding
initiative. Crowdfunding is a peer to peer funding model that is not new but
has accelerated in importance with the growth of social media.
Why Bother?
The funding landscape is changing due to demographics, government debt,
entitlements, shrinking family foundations, disappearing corporate
foundations. There is also a growth in those involved in the creation of arts
and culture, enterprises, etc.
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Crowdfunding - What do you need?
• A crowd
• Business challenge / problem / question you want answered – ideas
• A process and tool for engagement
• Trust and commitment in your crowd to take action
• Key performance indicators – what does success look like?
• Proof of action – your crowd wants to see what happened
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Donor Generations
Millennials (born ’91 and after) - ?
Gen Y (born ’81-’91) – Average Donation $325
Gen X (born ’65-’80) – Average Donation $549
Boomers (born ’46-’64) – Average Donation $725
Civics (born ’45 or earlier) – Average Donation $833
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Where Donors are Giving
Social Network Site
SMS
Third Party Vendor
Phone
In Lieu of Gift
Monthly Debit
Mailed Gift
Online via Website
Charity Gift Shop
Tribute Gift
Fundraising Event
Checkout Donation
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
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Online Giving
“Fundraising Trends and Challenges in the Canadian Direct Marketing Sector”-
a research paper from 2009 by Cornerstone Group of Companies shows:
• Donors who make their first gift to an organization online as opposed to
via direct mail have a much higher average gift
$73 vs. $30
• There are now more than 4 times the number of new donors, per
organization, from online initiatives than 5 years ago (9M to 40M).”
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Who is your crowd?
The crowd you know The crowd you don’t know
Donors Donors’
Network
Prospects Prospects’
Network
Event
Attendees Event
Attendees’
Network
Mailing Lists
Mailing List’s
Network
Social Media Makes
the Connection
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Projects or Doable Asks
• Easier for most people to wrap their head around a
smaller project as opposed to a ‘cure’ or a ‘hospital
wing’
• Examples:
• Piece of medical equipment
• Stream revitalization
• Education program
• Conference attendance
• Sports equipment for a couple kids
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Financing Enterprise
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Examples: SponsorMe (UK)
No restrictions on who posts
projects or the type of projects.
Costs:
4% Fee on money raised
Unmet goals = 9%
Not ‘all or nothing’
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Examples: Please Fund Us (UK)
No restrictions on who posts
projects or the type of projects.
Funding is All or nothing
Costs:
3% Fee on money raised
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Examples: Crowdrise (US only)
Post
Promote
Fund
Report
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Examples: Fundchange (Canada only)
Post
Promote
Share
Search/Filter
Fund
Receipt
Report
Costs:
$99 + hst to join
includes 2 postings
3.9% processing fee
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What We’ve Learned
• 83% of new funders come from Twitter or Facebook
• Average amount of funding is $190.00
• 100% of projects have received funds from new funders
• Unlike Real Estate – Location is becoming less important
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Benefits & Challenges
• 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
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Integrating Crowdfunding into Your Organization
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.
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Worth a Look
See how Fiat used the crowd and the desire to be ‘involved’ to
research and build the Mio…
http://youtu.be/hg0b8Z51YC0
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Who is Ideavibes?
Ideavibes has developed a white label crowd engagement platform that allows
organizations to easily launch branded crowdsourcing or crowdfunding
initiatives on their own websites. By engaging focused or broad crowds
through social media, our platform makes open innovation, crowdsourcing
and citizen engagement easily accessible at less than $1000 per month.
Ideavibes also runs one of Canada’s first crowdfunding websites for charities
called Fundchange (www.fundchange.com) where have raised over $50,000 in
funds for various charity and not-for-profit projects. Ideavibes has partnered
with TELUS (www.telus.com) to bring about a new way to fund change in our
community through social media and the power of the crowd.
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Where does Ideavibes fit in the market?
• Enterprise Collaboration or Idea Management
– Large – multi-functioning platforms for Idea Management
– Integrated into change management and process improvement
lifecycles
• Middle-tier Focused Crowdsourcing Apps
– Purpose-built customizable platform focused on crowdsourcing
– Departmental or Sub 1000 employee corporations
– The only SAAS Crowdfunding App with customizable payment gateway
• Ad-hoc website widgets
– Developed by web teams with basic functionality
– Functionality as opposed to business process driven
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On Demand Crowdsourcing
The Ideavibes web
application is a hosted secure
solution designed to fit into
an existing internal-external
website or be part of a
customized destination
website.
The app can be deployed by
a web team without
requiring input by IT.
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On Demand Crowdfunding
Unique deployment
with custom payment
gateway attached at
the back end.
Can be configured with
your own payment
gateway solution such
as
Paypal, Beanstream, et
c.
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Resources
• Donor stats, etc. came from “The Next Generation of
Canadian Giving” – Nov. 2010 – by Vinay Bhagat, et al
• “The Wisdom of Crowds” – book by James Surowiecki
• “Crowdsourcing” – book by Jeff Howe
• “Fundraising Trends and Challenges in the Canadian Direct
Marketing Sector”, a research paper released in 2009 by
Cornerstone Group of Companies
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Thank you
Paul Dombowsky | +1.613.878.1681 | paul@ideavibes.com
www.ideavibes.com | blog.ideavibes.com | blog.fundchange.com