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Crowdsourcing: More Than just Numbers

document Crowd Creativity, Open Innovation

Crowdsourcing: more than just numbers
Could crowdsourcing be the way to finance your naked business ambitions?

Last November, Alan Sugar was lambasted for apparently calling the bosses of small firms "moaners" who "lived in Disneyland" for complaining about not being able to access bank lending. Harsh words indeed when most people would agree that the banks should have been more supportive, but the recession has also acted as a catalyst for new and more imaginative ways to raise business finance. In the same ways as that firms like Wonga are disrupting the traditional personal bank loan market, crowdsourcing is adding a new flavour to disrupt the world of business financing. Crowdsourcing is simultaneously creating new business models that shake up traditional marketplaces and drive benefits to consumers, bringing customers even closer and involving them in the product design/selection process. Crowdsourcing (i.e. mass collaboration, particularly using the internet to connect people rapidly) has been around for a few years but until now has been more prevalent in the USA than in Europe. This is now changing fast, with the UK taking a highly creative lead. Last week, I caught up with Rowan Gormley, CEO of Naked Wines, who I first met a long while ago, when he was disrupting the banking market with the launch of Virgin Direct. This was followed by the creation of Virgin Wines and now his latest venture, Naked Wines. Sporting a broken leg – having fallen off a wall following a wine tasting – Rowan was in good spirits (excuse the pun). Naked Wines strips out the middlemen: “Historically most winemakers had to spend more time and money selling wine rather than making it. Bonkers! Good

winemakers want to invest in quality – they don't want to waste their funds on slick marketing campaigns." To get around this, Gormley has rapidly built a customer base now numbering c100,000, of whom a large proportion are “angels” investing £20 a month in advance for their wines. This creates a virtuous circle where the wines selected are the ones the angel community identifies as their “favourites”, orders are aggregated in advance and “the winemakers get to know their wine is sold before they've even grown the grapes... so they can spend all their time in the vineyard crafting delicious wines, and give you the money they would have wasted on selling!” Gormley is not the only creative UK entrepreneur using crowd-sourcing creatively: Hotel Chocolat: the chocolate maker and retailer last year offered a three year, FSA-approved "chocolate bond" to its members' tasting club to raise £5m, with its customers asked to invest £2,000 for a gross annual return of 6.72 per cent, or £4,000 for returns of 7.29 per cent, with the dividends returned in twice monthly chocolate deliveries. Made.com: the online furniture business is stripping out the middlemen and connecting its customers with the furniture makers directly to cut the cost to the consumer by 50 - 80 per cent. The company’s product range is determined by a customer voting system to identify “favourites”. With a 10 day countdown period for orders where customers commit to pay upfront, Made.com only orders the exact number required from the manufacturers, avoiding the need for a warehouse as orders are delivered direct to customers’ homes. Hopefully these great examples will give Lord Sugar reason to raise a glass, munch a chocolate or just sit back and relax in a comfy chair. Picture source

Summary Crowdsourcing is simultaneously creating new business models that shake up traditional marketplaces and drive benefits to consumers, bringing customers even closer and involving them in the product design/selection process.

Description Crowdsourcing (i.e. mass collaboration, particularly using the internet to connect people rapidly) has been around for a few years but until now has been more prevalent in the USA than in Europe.

This is now changing fast, with the UK taking a highly creative lead.

Tags: Crowdsource, Crowdsourcing, Hotel Chocolat, Naked Wines, Wonga

Posted by Tim Satterthwaite

May 03, 2011 01:25 pm GMT Viewed 1822 times

Author: Martin Leuw Source

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