Wednesday, 29 May 2013

internet business model Part 3.2; of rules, methods, character, systems and economic models

[This is a re-post (originally posted on 2 Jan 2013) with minor edits, deleted the original post by mistake.]

But who owns these cooperative efforts and the data?  The organisation do not, it is the crowd.  Platforms like Yahoo only borrow it.  It is a ginger relationship.  If respect is not given, the crowds will depart.  The sites must consciously not violate the community norms.  Internet culture plays a part.  They must of course also watch their competitors.  Data must remain fresh to have value, like seafood, so if the consumer moves away, it becomes untenable.  Trusts must be maintained.  Friendster and Myspace, the earlier social media giants suffered this.  If attempt is made to control too much of it, it risk turning away the crowd that makes the value.  The open culture must be respected.

A few examples of applying crowdsourcing to traditional businesses:

The beauty of crowdsourcing is that it reduces risk significantly.  Take My Major Company (MMC), an online record label that uses crowdfunding to finance its acts (it’s already profitable).  MMC posts demos and videos of 10 artists on its website and users are invited to invest anywhere from £10 to £1,000 in the ones they most enjoy or think are most likely to score a hit,  Once an act reaches £100,000, the financing is locked in and the money is used to pay for recording and possibly a tour.  Net revenue is split among the investors, the artist and MMC.

“Amazon even offered $5 off to customers who scanned a bar code in a store – so Amazon could offer a lower price on the same item” (Time, 9 Jan 2012).  If a retailer wants to find out a competitor pricing, isn’t this a great way of doing so?  Instead of paying a team to go physically to stores, you now crowdsource your customers who are even paid (vouchers) to spend further in your store!

Most local travel agencies are not taking advantage of crowdsourcing or other tools to improve the saleability of the hotels rooms, restaurants, packages or to cater to local culture vulture tourists.  User experience on their websites is basic and they could really improve their marketability by developing a more conducive buying experience.  YouTube, the second most searched site on the internet, is a service not fully or properly utilised for marketing.  What is better than actually seeing a video of the surrounds for a more authentic experience when researching for a holiday destination?  Or read and view what fellow travellers have experienced.  They would trust this more, rather than slick marketing messages.  YouTube is mostly crowdsourced so nudge nudge can be used to encouraged locals to contribute.  The principle of nudge nudge is aligned to the internet operating model.  I use YouTube to browse through a location to get a feel of the local culture, whether the streets look safe, the street markets and places where the locals go.  The promotional videos I have viewed are conventional, mostly glossy shots of the popular sites.  It feels controlled.  The YouTube generation may connect better with an open, less formal, down-to-earth facsimile of locales to add realism.  Travel-based websites could also do with local contacts, crowdsourced citizens obviously, who could act as informal online friends to provide local information as another example.

In time, crowdsourcing will become a common tool.

Let’s now use the print media as further example.  While hyped on its death, it is way overblown and it will be here to stay.  As they say, content is king!  Content will always be there but its acquisition, assimilation and presentation will be in a different form.  Readership may even increase if one is to consider not just the newsprint version or its online facsimile.  Many youngsters may not read newspaper these days but they do read forwarded news in Facebook or twitter for example.  New forms as long as the revenue model is synchronised to the foundation is what the stakeholders care about.  Crowdsourcing can be used.  So is co-creation.  The media company could facilitate it by building tools to make it easy to do this.  Twitter unquestionably brings in the freshest news over wider coverage by the crowd but a mechanism needs to be in place to authenticate it (more crowdsourcing and social media can do this).  There are other ways to tap fresh news.  Writers can be crowdsourced directly and indirectly as is content.  We know there is a lot of news worthy content out there, albeit mostly raw, so it is up to us to plug into it and figure out their use.  Short videos, best exemplified by YouTube can be used more.  Crowds are already phone capturing a lot of live video because they are like ants, all over the place.  No doubt most are useless but enough are news worthy.  Someday the media industry may figure out how to capture this first hand like YouTube has done.  Certainly instead of merely incorporating blogs or social media, all content could be integrated seamlessly into an overall experience.  Take into account how directness, immediacy, peering and crowdsourcing can do attitude and be mindful of the transition.

One last example uses gaming as a means to tap crowdsourcing for Science.  DARPA (Defense Advanced Research Projects Agency) runs a public computer game called Foldit in which competitors try to fold proteins, one of the most difficult biochemistry impediments to curing disease.  Misfolded proteins lead to diseases such as mad cow and Alzheimer’s.  Since Foldit launched in May 2008, more than 236,000 gamers have registered, their contributions helping to decipher the structure of an enzyme responsible for causing AIDS in rhesus monkeys – the first example of a major breakthrough in crowdsourced science.  “Innovation” DARPA notes, “benefits when the number and diversity of people participating goes up.

Besides businesses, political parties can use crowdsourcing.  So far, they have used websites, blogs and twitter and while there is feedback, they are mostly a means for outward communication.  Crowdsourcing is inward and engaging.

Co-creation a variation of crowdsourcing, discussed in the next post, is another powerful tool.

LinkedIn – dr tommi che

©Chen Thet Ngian, (2012, 2013).  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Chen Thet Ngian and with appropriate and specific direction to the original content.

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