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My Ten Favorite Tweets – Week Ending 032610

From the home office in CTU, where I’m taking control of ’24′, not going to let it be canceled

#1: RT @scobleizer http://bestc.am/T90 This is Paul Pluschkell CEO of @spigit which is cool ideation software used by tons of companies. Now onto @pipioinc

#2: Wow – my moment in @dahowlett‘s spotlight: Enterprise 2.0: let’s be careful out there http://bit.ly/bQR3vj Great stuff, needs several reads

#3: Enterprise 2.0 and our tendency to think and talk in terms of efficiency http://bit.ly/cDe3mO by @oscarberg #e20

#4: Discussion is a good thing! RT @rawn Had to write disagreeing response to spigit post “Maslow’s Hierarchy of E2.0 ROI” http://bit.ly/9ltJo6

#5: Avoiding Innovation Chaos inside Companies (via Spigit blog) http://bit.ly/anh1cY #innovation #e20

#6: RT @govfresh Manor in WSJ: ‘A Hotbed of Tech Innovation: the Government of Manor, Texas’ http://bit.ly/aUyxbF #gov20

#7: Is Crowdsourcing Disruptive? http://bit.ly/aYybmt by @stephenshapiro > Cost per design vs cost of acquisition #innovation

#8: Can truly great design be done the open source way? http://bit.ly/bcZszD by @cdgrams > a bazaar or a cathedral? #design

#9: Actual newspaper headline: “Republicans turned off by the size of Obama’s package.” http://bit.ly/crhh2O #hcr?

#10: RT @skydiver “One of the things I love about Twitter is that you can totally make up quotations.” – Abraham Lincoln

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Three Models for Applying Customer Feedback to Innovation

Customers have always been core to companies’ existence. An obvious statement for sure. Customers are the source of cash flow, and have historically been thought of in marketing and transactional contexts.

But in recent years, we’ve seen the rise of a new way to consider customers. As vital influencers of company activities and strategies. Two popular ways this is taking form are the social CRM movement, and the emergence of open innovation.

If you follow discussions in these developing strategies, you see that there are differing views as to the value of customer feedback. Understanding the different use cases of customer feedback helps organizations to set objectives and expectations appropriately, and to create effective frameworks for engaging customers.

Let’s look at three models for applying customer feedback to innovation.

Customer Feedback and Innovation Objectives

The graph below highlights the three models:

The three objectives on the graph are:

  • Features – product or service requests
  • Product’s “job” – understand the deeper purpose your product fulfills
  • Proposal – putting a new concept in front of customers to understand its key value drivers

The X-axis measures the difficulty of getting feedback relevant to a particular objective. The Y-axis measures the impact on company results for the different objectives.

Some notes on the three models follow. For context, I’m including some ideas proposed by Starbucks customers on the My Starbucks Idea site.

Features

Customers – hundreds, thousands, millions of them – are constantly using your products and services. This makes them well-positioned to suggest future product features and service enhancements. As a customer, you become intimately familiar with a product’s utility, and what else you want to see.

You can see this on the My Starbucks Idea site. Some examples of customer product and service ideas:

  • Use dark chocolate in espresso drinks #
  • More milk substitute options #
  • Healthy food items #
  • Mobile QR codes with payment info and drink order (scan-n-pay) #
  • Separate lines for drip coffee buyers (during morning rush hour) #

Often, I see this type of innovation pooh-poohed, as if it is not worth the effort. I fundamentally disagree with that position. This is the important, block-and-tackle work of serving a large market.

As the graph shows, these individual innovations won’t dramatically change a company’s fortunes. But in aggregate, they become a vital part of the product strategy for companies. Soliciting useful ideas for features is relatively easy.

It is important to remember that no company will blindly follow whatever ideas are suggested.  Innovation here is customer-centered, but not majority centered.

Product’s “Job”

The notion that customers hire your product to do a “job” is one I learned from Clayton Christensen. He stresses thinking of what customers need to accomplish, as opposed to thinking of product features or customer demographic segments. This frees your mind to address products differently than as a collection of features.

The challenge is to go deeper on what the customers are requesting. This is where customer feedback is not the final answer. Rather, it’s an important clue as to what “job” your customers are hiring for. Take a look at these five ideas from the Starbucks ideas site:

  • I need a 24 hour Starbucks #
  • Have late night locations near hospitals #
  • Later Weekend Hours #
  • More comfortable seating and extended hours #
  • New/additional 24hr locations #
  • Open late #

Now as features go, the ideas above are pretty basic. Keep Starbucks open later. But rather than look at them that way, are they providing clues about the “job” customers hire Starbucks to do?

It’s obvious customers are hiring Starbucks for more than a cup of coffee. Starbucks has consciously built out a more lifestyle-based experience. These requests for nighttime hours are indicators that Starbucks has an opportunity to address a new “job”. Here’s my interpretation of the “job” (yours may be different):

People want the solo intellectual pursuits of reading a book, creative writing, researching or getting projects done on a computer. They could do this at home with their own coffee brew or tea. But there’s something social about being around others, even if you’re not engaging with them. You’re connected to the world, as you view it through the periphery of your mind’s focus.

People want to pursue their individual interests, but do it in a way that let’s them feel connected to larger society, be around kindred types and keep tabs on what is happening.

If you accept that as the “job” that customers hire Starbucks to do at nighttime, then the next activity in customer-centric innovation is to come up with other features of the experience that address the “job”.

This is where Starbucks can suggest new features to customers, based on a better understanding of the “job”. The new features can be put out to the customer community for their feedback.

Proposal

Roberto Verganti describes a “proposal” in his book, Design Driven Innovation. A proposal is a product that is not a linear change in your offering, but represents a radical change in meaning. Many purchases – such as a Starbucks coffee – have meaning beyond the coffee. In fact, I’d argue Starbucks has successfully performed a radical change in meaning with its coffee varieties, “baristas” and lifestyle experience. Much different than say, a Dunkin Donuts or McDonalds coffee.

Verganti also takes a fairly dogmatic position against customer-centric innovation. Rather, he argues for vision-centered innovation. The inspiration and sources for vision comes via learning from networks at the edge of societal change, within your industry and outside it. But it’s not without a role for customers after all. As he wrote recently on the Harvard Business Review:

They need to propose new unsolicited products and services that are both attractive, sustainable, and profitable. It is only within the framework of a vision-centered process that users can provide precious insights.

In this model, customers cannot tell you the new, unimagined things they want. Would anyone have suggested a need for Adobe Acrobat, Turbotax, Facebook or Twitter? But once a company has a new proposal for customers, they can become part of the development process. As Russell Ackoff and Herbert Addison wrote in the Little Book of f-Laws (pdf):

There is no point in asking consumers – who do not know what they want – to say what they want. Many new product and service introductions have been disastrous despite the extensive surveys conducted to show that there is consumer interest in, and intention to buy, such a product or service. These surveys have incorrectly assumed that most consumers know what they want.

Consumers can discover what they want in products and services by designing them. It is in design that people find what they want. Furthermore, consumer involvement in product/service design almost always gets creative results.

Engaging customers to get their ideas for something radically different holds great value here. This is not an exercise in determining market interest – although that might be a side outcome. Rather, it’s a process of getting ideas to flesh out this proposal. Let customers help determine the radical innovation of meaning for a new concept.

Progress on the Open Innovation and Social CRM Fronts

The graph above is really more a spectrum, not a series of discrete models. For example, where feature requests leave off and become input about a product’s “job” isn’t a step function. More part of a continuum. But it’s helpful for discussion purposes to describe three models, because there are differences at different points of the spectrum.

As both open innovation and social CRM progress, think about the implications of these approaches on integrating customer feedback into innovation.

My Ten Favorite Tweets – Week Ending 031910

From the home office on Capitol Hill, where I’m pushing hard this weekend to get the historic Potty Parity Act passed for this great nation of ours…

#1: RT @louisgray louisgray.com: The SXSW Keynote With Ev Williams You Really Wanted to See http://bit.ly/c0xdpx

#2: Enterprise 2.0: efficiency, effectiveness, blame and responsibility http://bit.ly/a6YgWX by @dahowlett > and thx for the shout-out Dennis

#3: Maslow’s Hierarchy of Enterprise 2.0 ROI (via Spigit blog) http://bit.ly/bPIsWI #e20 #innovation

#4: Lessons from a Middle-Aged Revolutionary at W.L. Gore http://bit.ly/cRBUP3 by Gary Hamel #e20 #innovation #yam

#5: A Collection of 50+ Enterprise 2.0 Case Studies and Examples http://tinyurl.com/yayu2lx from @jacobm

#6: RT @lindegaard Nine Tips for Open Innovation | 15inno http://ow.ly/1qsfHa

#7: The Perils of Market Research – BusinessWeek > “Market research is a compass, not a map” #innovation http://post.ly/T0KQ

#8: The fallacy in thinking of Gen Y as “digital natives” | The Economist http://post.ly/SkK7

#9: My 5 y.o. son is asking me if I can connect my laptop to the “Albert server” of his school. He’s 5! How does he know about servers?

#10: RT @zackperry Crap I totally just got owned by a group of preschoolers who refused to move off the sidewalk and made me walk in the grass

The Two-Year Lag from Web 2.0 to Enterprise 2.0

The Enterprise 2.0 sector draws heavy inspiration from innovations in the Web 2.0 world. Indeed, the name itself, Enterprise “2.0” reflects this influence. From a product management perspective, Web 2.0, and its derivations social networking and social media are great proving grounds for features before coding them into your application.

A fruitful area to review is how long it takes for a feature to go from some level of decent adoption in the consumer realm to becoming part of the mainstream Enterprise 2.0 vendor landscape. The list of features that have made the jump – forums, wikis, blogs, tagging, social networking, activity streams, status updates – is impressive. Let’s look at three features that made the leap, with an eye toward how long it took.

Tool Year of Web Adoption Year of E2.0 Adoption
Wikis 2002 2004
Social networking 2006 2008
Microblogging 2007 2009

Here’s the back-up for those dates.

Wikis: Wikis got their start back in 1995. From there they grew, and the application became popular with computer programmers. But it hadn’t caught hold outside that culture. Wikipedia was launched in January 2001, and grew rapidly over its first two years. It wasn’t yet mainstream, but it clearly had caught a wave among early adopters. As recounted on the history of wikis page in Wikipedia, 2004 – 2006 saw an explosion of interest in wikis from companies.

Social networking: Defined as enabling social profiles, and connecting with others. Facebook started in 2004, and grew very popular among colleges. In 2006, it opened up its membership beyond college students, and turned down a $1 billion offer from Yahoo! Clearly, the company was on fire (even then).

In April 2008, Jive released Clearspace 2.0, which was touted as Facebook for the enterprise. Socialtext 3.0 was released in September 2008, and it included Socialtext People, its social networking feature. And I can tell you that at BEA Systems, there was a second quarter 2008 release of a Facebook for the enterprise in the Aqualogic product line.

Microblogging: Twitter. The source of it all. Twitter actually was conceived as an idea back in 2000, and company was started from a 2006 brainstorming session at Odeo. But it really hit big with the early adopter set at 2007′s South by Southwest.

Microblogging broke into the Enterprise 2.0 world when Yammer won best-of-show at the September 2008 TechCrunch 50. But that doesn’t count as mainstreaming into Enterprise 2.0. Yammer proceeded to grow strongly the next few months. And Socialtext introduced Signals in March 2009.

So there’s some documentation backing my 2-year cycle for Web 2.0 innovations to move from hitting the early adopter set to the Enterprise 2.0 sector. Note that this doesn’t apply to every Web 2.0 innovation. No one ever talked about “MySpace for the Enterprise” and there’s really not a Flickr in the Enterprise 2.0 umbrella.

Which raises a question about today’s hottest Web 2.0 trend…

Foursquare for the Enterprise?

Foursquare, and its up-n-coming competitor Gowalla, are all the rage these days. These location-based social networks are good for seeing what friends are doing. Foursquare also integrates features that reward participation (points), add a sense of competition (mayors) and provide recognition (badges).

Mark Fidelman recently wrote about Foursquare and Enterprise 2.0. And using our handy two-year lag calculation, somewhere in early 2012 the first mainstream Enterprise 2.0 will integrate Foursquare features. Actually, two of them.

Location check-ins

Employees will check in their locations from all around the globe. Sales meetings, customer on-site deployments, sourcing trips, conferences, etc. Sure, this info might be in the Outlook Calendar. But even if it is, Outlook Calendar entries aren’t social objects. These check-ins will allow you to know where colleagues are, including those you don’t know well. But wouldn’t it be nice to know if some other employee visited someplace you’re investigating?

These check-ins can be even more tactical. Folks who are part of a meeting in a conference room all check-in. Voila! Meeting attendance, which everyone can see. For an individual employee, these check-ins become a personal history of what you did over the past week.

Mayorships, Badges, Points

Foursquare makes it fun, and for many people, addicting, to check-in. You get points and *bonuses* when you check into the places you go. If you check in to the same place enough times, you get to be mayor of a venue and tweet it about it. You earn badges for accomplishing different things in the Foursquare system.

These features have had the effect of motivating legions of people to participate. It’s fun to see your stats. It’s fun to get a little competitive.  It’s great when you get that notification that you’ve earned a new badge.

Andrew McAfee wrote a series of posts exploring the question of whether knowledge workers should have Enterprise 2.0 ratings. This chart was from one of his posts:

Well, the Foursquare approach certainly takes us down this path, albeit in a fun way. I’d be remiss if I didn’t call out that Spigit already has these tools in place (ahead of its time?).

So what do you think? Personally, I’m looking forward to more Foursquare in the enterprise.

I’m @bhc3 on Twitter.

Crowdsourcing for a Billion Dollar Business – Cisco I-Prize

Crowdsourcing continues to grow in popularity and importance across a number of industries. Tac Andersen, at the South by Southwest Interactive event in Austin, took in the buzz there, and notes that crowdsourcing is heating up. Digital strategy, marketing and design firm Last Exit called crowdsourcing a top digital marketing trend for 2010.

With that as context, let’s discuss the Cisco I-Prize. What’s that? I-Prize is an open innovation competition where anyone from around the world can propose ideas. Specifically, ideas that can be $1 billion businesses. This is the use of crowdsourcing to find major business units. Winning team earns $250,000.

Submission of ideas to the I-Prize site, which is powered by Spigit, runs through April 30, 2010. There are already 597 ideas on the site. Anyone can post an idea, and other people discuss it. You can even request to join someone’s team if you like a proposal enough, and the idea owner thinks you can add value. 32 ideas advance to the semi-final selection round.

One note about how the I-Prize works. Participants get virtual currency to buy and sell shares in ideas. Like a stock market. And 8 ideas with the highest price per share (“People’s Choice”) will advance to the semi-final selection round, along with 24 ideas hand-picked by Cisco officials (“Judge’s Choice”).

So the idea trading will matter.

I wanted to write about five ideas that I found interesting. Will they be $1 billion businesses? I don’t know for sure. But these ideas address current markets that reach into the billions of dollars. And I like some of the edgy thinking that goes into them. Along with descriptions, I’ve included their share price performance charts. Note that to view the ideas, and to trade them, you need to be registered on the I-Prize site.

The E-Learning Revolution, by Patrick Mellacher

Patrick’s idea is for students to collaborate and teach one another. Any student can record a lesson on any subject. Other students find this recording, view it and rate it. Top rated tutorials rise to the top.

A key element of his plan is closing the feedback loop. Specifically, how did those who viewed the tutorial perform on their tests? If their performance was above average, the student who uploaded the tutorial gets extra credit.

Because they’ve shown good mastery of the subject, and helped others learn as well.

In a discussion around the idea, Patrick comments:

The other main difference is that my system wants to encourage students to teach each other, not to force them to do so. Not every student is a good teacher, and it should also be possible to achieve the highest possible grade by only learning for yourself. There are, however, students that are very well prepared but fear to be unlucky and therefore want to secure a good grade. In the current system, they mostly try to learn even more(even if they don’t have to) and are not interested in teaching other students. My idea could change that dramatically.

This would be a big help in the education system, distributing the teaching load beyond teachers.

Webcam Game Show Network, by Philip Palmieri

Yes, you read that right: a game show network. Believe it or not, this idea has the highest price per share right now. Let’s find out why.

Game shows are a staple of networks, and they continue to get good slots in prime time. Why not port this experience over to online participants? The basics of this idea are:

  • Everyone logs in at the regular time for the game show
  • People have their web cams fired up (which chatroulette shows is a growing trend)
  • Someone logged in to the game show site is selected at random to play

Right now, you can watch a game show, enjoy the contestants’ fumbling around and wonder if you could do better. With this idea, you just may get the chanced to find out. No flying to an L.A. studio to participate. Just sit in front of your PC at home.

This concept wouldn’t need to be limited to game shows. In response to one commenter on his idea, Philip wrote:

Fantastic, i love the idea about real pundits talking about live events..  this could be huge…  Post-sports games, let the community be analysts, or political events too…

Man, I could see the sports talk after a game. People would love that.

The Cisco Home Energy Mediator, by Robert Dziekan

Cisco currently has technology that helps companies mediate the energy usage of their facilities. What Robert proposes is to extend this into the consumer home market. We can see the power usage, by appliance, at any time via a web interface. And control it accordingly.

Here’s how Robert describes it:

This would give the users who elected to use this service the ability to manage their electricity usage, and truly see what devices in the home were using the most electricity, allowing them to run reports that show historical usage, and the option to set policies that would throttle usage in certain areas, or at least alerting a user if they are going to violate policy (for instance, by virtually running a laundromat in their home one week, exceeding their normal laundry device usage by 300 percent and increasing the high energy usage of devices like the dryer).

Aside from these reports and controls, the home mediator could send alerts when something is amiss for an appliance. I like this idea, and it’s something that’s being discussed out there. Tim O’Reilly noted this at the Web 2.0 Summit last year:

Consider the so-called “smart electrical grid.” Gavin Starks, the founder of AMEE, a neutral web-services back-end for energy-related sensor data, noted that researchers combing the smart meter data from 1.2 million homes in the UK have already discovered that each device in the home has a unique energy signature. It is possible to determine not only the wattage being drawn by the device, but the make and model of each major appliance within – think CDDB for appliances and consumer electronics!

If the cost of the system was relatively low, there seems to be a strong ROI for this. And there are a lot of homes out there.

Touch Immersion VR: A wearable device for physical interaction within a virtual environment, by Benjamin Rafael Intal

Virtual reality holds a lot of potential, providing a user with the simulation of experiences beyond her physical location. Estimates put the market size well into the billions of dollars. Areas of growth for virtual reality include:

  • Healthcare
  • Defense
  • Gaming
  • Learning
  • Construction and infrastructure

This idea is for a device that provides sensory stimulus in a virtual environment. Combine the physical with the virtual to improve the reactions people have when using virtual reality environments. It envisions delivering these touch sensations: movement restrictions, temperature, pressure, shock. The proposed technology involves servo motors and solenoids, and small cavities with a viscous fluid.

Making what’s virtual more tangible for users strikes me as a really good idea.

EmoTransmission: Transmitting Emotion in Multiplayer Gaming “Feeling Transmission On Games”, by Ali Khalil

I like the way Ali introduces this:

Internet protocols now handle many different types of data, information, voice, and video…etc. But what about feelings like anger, happiness, satisfaction, fear, hate or sadness?

The framing of emotions as data to be captured and transmitted. Definitely edgy. And not out of the realm of possibilities. I mean, who would have guess checking in our locations would be so popular?

Ali envisions emotions integrating into the game experience. Imagine you’re playing one of those multiplayer online games. As you see others, you can get a read for the emotions they are feeling. Which is something that would occur in “real life” if you were engaged in fighting a big battle on your imaginary dragon beast.

There is technology out there which can enable this idea. Here’s how Ali describes it:

There are many types of biofeedback sensors available, able to detect such conditions as skin temperature, muscle tension, and pulse. Analysis of a persons voice could be done with a voice analyzer, as a persons voice is rich with information about a persons emotional state. These sensors and other input devices could be integrated into a device that would cover part of a persons body, like a glove or vest. This device would then be connected to a hardware input device and the software that resides on it would perform the necessary analysis and conversions, tying the detected emotions to the character in the game or simulation.

Good stuff, and something I can see the gamers liking a lot.

Crowdsourcing’s Many Flavors

I wrote previously about crowdsourcing and its effect on the design industry. Well, this is an entirely different approach. It rests on the ideas of others. This does not run into the spec work = free work controversy seen elsewhere. Someone might argue, why not start your own company off these ideas? Well, anyone is free to do so, and not propose them here.

But not all of us are itching to shuck it all take on the risk of entrepreneurship. Mortgages, kids, success in current careers…these are factors that would limit one’s interest in striking out on one’s own. Sometimes, you just have a good idea.

There are 592 other ideas on the I-Prize site currently, beside these five. Go see crowdsourcing in action.

My Ten Favorite Tweets – Week Ending 031210

From the home office at SXSW in Austin, where I’m not…

#1: Is Collaboration Enough for Knowledge Management? http://bit.ly/bXdNhj by @deb_lavoy #e20 #km

#2: What Enterprise 2.0 vendors can learn from FourSquare http://tinyurl.com/y9bsxc6 by @markfidelman

#3: RT @Irregulars Wikipedia’s Decline and the 7 Types of Human Motivation http://bit.ly/atzPLC

#4: White House expands Gov 2.0 with landmark crowdsourcing directive (via Spigit blog) http://bit.ly/auo6FK #gov20 #innovation

#5: “Contests are increasingly being used as a tool to solve society’s most entrenched problems” http://bit.ly/9KFJmy #crowdsourcing

#6: RT @VentureBeat Spigit offers social media platform for company contests http://ow.ly/1q0m44 #crowdsourcing

#7: RT @elldir Woops! Too long ago I told @bhc3 that I would post how I think about different dimensions of innovation. http://bit.ly/dcNd7s

#8: Five inter-related innovation problems that an organizational structure should address – Scott Anthony HBR #innovation http://post.ly/SOB2

#9: Reading @bokeen‘s write-up of his chatroulette experience. Damn funny, and pretty much what I’d expect. http://bit.ly/9Wnd20

#10: RT @anildash I’m surprised none of you dorks camped outside of your own house last night, then ran back in to order an iPad

Is Crowdsourcing Disrupting the Design Industry?

This is an issue that I simply cannot wrap my head around. Spec work appears in the design field infinitely more times than any other industry. It absolutely floors me that people think that it is even remotely ethical to build their businesses by tearing down ours.

Mark Hemmis’s comment on AIGA policy statement on spec work

The past couple years have seen an increase in the use of crowdsourcing by companies to procure design assets. It works like this:

  • Requesting organization posts a request for submissions to a design crowdsourcing site (e.g. 99designs, crowdSPRING, MycroBurst, etc.)
  • Interested designers review the request, and create their entry
  • They submit their entry to the site
  • Requesting organization selects its favorite, pays the winning designer the announced fee

These design requests are often for logos, but for a number of other types of initiatives as well. For example, 99designs’ list of requests (to the right) gives some sense of the types of projects.

So far, so good, right? Well, a lot of designers think not. As Mark Hemmis’s comment above shows, these open spec work contests have been raising the ire of the designer community.

Is crowdsourcing ripping their industry asunder?

Designers’ Beefs with Crowdsourcing

Three aspects of crowdsourcing design raise concern for many in the design industry:

  1. Lack of compensation for designers whose entries are not selected
  2. Diminishes the design profession
  3. Not sustainable in the long term

Compensation: To be competitive, individuals will need to invest some time in designing a submission for a company. With a good number of entries, this equates to a decent number of hours invested. As Pamela Pfiffner writes:

The problem is, spec and crowdsourcing can lower your value and hourly rates so far that minimum wage looks like a fat paycheck.

Her statement takes things to a logical extreme – someone would have to do nothing but spend their time entering contests. But she does a good job framing the issue.

Diminishing the profession: The issue with crowdsourcing is that it says, “this stuff is easy!” A commenter on this post, How NOT to Design a Logo, baldly gives this concern legitimacy:

Logo design contests are great, its the only way I go. I get my pick of 5-10 designs for less then $20. Designers these days are a dime a dozen, be happy you get the work.

The design industry has characteristics of being craftsman, as well as strategists. At least the higher end firms do. Sentiments like that are grating.

Not sustainable: The concern here is that over the long term, the economics of crowdsourcing will cause existing designers to exit the industry, and potential designers will opt for different careers. Here’s how Jacob Cass thinks about it:

Design contest sites are not the future of graphic design… nor do I see a time when it ever will be, however, in the long term I believe spec work is going to be detrimental to the design industry… both devaluing design and designers as a whole.

The argument here is that rather than expand the pool of talent for design, crowdsourcing will ultimately reduce the industry.

So designers themselves are lining up against these types of crowdsourcing design contests. Which begs the question…

Why Are Crowdsourcing Design Contests Growing?

I saw this comment from Jason Aiken of 99designs (March 1, 2010):

Truth is – 99designs is growing by leaps and bounds. We have record numbers of projects being launched and have needed to hire new staff to help us keep up with the growth.

The motivation of organizations seeking design work seem clear enough – tap a large network of creativity, manage expenses within budget. But what are those designers doing there?

It seems that not all designers are of the same mind about these crowdsourcing design contests. Some actually embrace them. Why?

Build your portfolio: Not all designers in the world have 10 years experience and a roster of paying clients. For those starting out in the business, the competitions provide great fuel for creating designs. If you want prospective clients to see what you’re capable of, the design competitions seem to offer a chance to create that portfolio. Benefits:
  • You need to think not abstractly about design principles, but concretely about how a design project relates to a business
  • Competitions are great for elevating one’s focus and creativity
  • You can benchmark yourself against other submissions, including those selected if yours is not

Personal interest: Some projects just pique the interest of a person. Maybe there’s a day job with a paying company, and then a chance at night to do things “your way” on a project of interest. The project taps some areas you want to pursue, or maybe allows you to try something out without concern as to whether the client will ultimately want the design.

Extra business: Everyone is hustling in a weak economy. If your design business has some slack in demand, why not apply the available creative resources toward an occasional crowdsourcing project? If you’re a professional shop, presumably your odds are better than most.

Access to high-end ad agencies: This was the case when Porter Crispin + Bogusky solicited logo designs for their start-up client Brammo, maker of electric motorcycles. They ran the contest through crowdSPRING. The contest sparked plenty of debate, but also saw 700 entries. One reason was that young up-n-coming designers wanted the chance to impress a firm of the caliber of PC+B, who can send many paying clients their way.

That’s the designer participation set of motivations. I guess the best way to think about companies’ motivation is this:

Do they get results?

Since the number of requests from companies is growing, design crowdsourcing sites are working at some level. If they weren’t, word would spread pretty quickly and companies would stop using them. This comment from designer  Morgan Stone on Alex Bogusky’s blog post about PC+B’s use of crowdSPRING is illuminating:

As a designer… crowdsourcing scares me. I think it has to do with the harsh reality that sometimes it doesn’t take experience or a big title to design something truly amazing.

What’s the staying power of the crowdsourced design contest approach? And will it disrupt the industry, in the Clayton Christensen sense?

Sustainability and Reach of Crowdsourcing Design Contests

Altimeter Group’s Jeremiah Owyang wrote last year, “Without a doubt, Specwork (like crowdspring or 99 designers) is here to stay – economics will drive this forward.” For the buyers, yes. But the supply side of the equation – the designers – is that here to stay?

I believe it is. The numbers say it is. Here’s what I mean:

In a 2009 article, Forbes noted that there are 80,000 free lance designers in the U.S. alone. Add in the talent from around the world, and you can see that there is a large of pool of creativity. Maybe 200,000 designers globally? 99designs claims roughly 54,000 designers on its site.

Designers have some motivation to participate in crowdsourcing design contests, as noted for the reasons above. It’s not like every designer will submit regularly. But every project reaches some new set of designers, and occasionally gets a repeat one as well.

All it takes is for a business seeking design work is maybe 30, 40, 50 submissions? As a percent of the global number of designers, that’s not much.

40 / 200,000 = 0.02%

Here’s what one designer said about getting clients from crowdsourcing sites:

I’ve had direct clients and also have been one of those in the crowd. Surprisingly, some of my best clients are the ones that followed me from these crowd sourcing sites. That’s probably because they’ve already been through a working process with me, and they like what they’ve experienced, so there’s no mismatch of expectations like a new client.

I do see the sustainability of the business. It’s complex, but there are enough people who do see advantages to participating. Even if only for certain periods of their lives or only on occasion. I don’t see entering crowdsourcing design contests as a full-time pursuit for someone.

Next question: how much can crowdsourcing chip away at the traditional areas of the design industry? There’s a gap that crowdsourcing addresses (Erica’s post, Bokardo’s post):

Many designers in the debate note the importance of establishing a rapport with clients, and understanding their clients more deeply than a set of colors and fonts. A firm such as Nocturnal Graphic Design Studio appears to deliver value through deeper relationships and more strategic approaches with its clients.

But Erica’s point above is well-taken. Sometimes, you’re not in the market for that level of involvement. Small and mid-sized businesses do not need the full horsepower of high-end design firms. As one designer (snootily) commented on the PC+B blog post about using crowdSPRING:

99 designs and their nefarious brethren have a client roster whose market recognition for the most part is similar to that of “joe’s morgue & jerky outlet.”

Of course, this may not be contained to SMBs.

The Disruptive Potential

Have you checked out what Mountain Dew is doing with crowdsourcing (aka “DEWmocracy”)? As Wired notes in a January article:

Mountain Dew is asking consumers to choose three new sodas, from selecting the flavors to naming them, designing the cans and choosing the ad agency to promoting the product.

Not all of this is crowdsourcing design, but it is an edgy experiment in leaving the professional firms behind.

Right now, as Steve Douglas of the Logo Factory notes, the biggest chunk of business is for logos. Which you can see at the start of this post in the 99designs project list.

The U.S. Census Bureau had the graphic design industry generating $2.8 billion in revenue in 2002. It is a large, diverse, complex industry. My expectation is that design contest crowdsourcing will encroach more into large enterprises for tactical projects, as the smaller businesses continue to use them and get good results. Large companies’ efforts, such Mountain Dew’s DEWmocracy, Unilever’s crowdsourcing contest for a TV campaign for its Peperami snack food, and Doritos’ crowdsourced Super Bowl ads, add fuel to this.

Two things are needed for the crowdsourcing model to encroach further into the design industry:

  • Leaderboards/reputation
  • Smartsourcing

Leaderboards let prospective buyers know who the best are. We see them on Topcoder for programming contests. It’s a way to establish visibility and credibility far beyond the recommendations you maintain on your own site. It will take some changes by the crowdsourcing sites, enabling recognition for designers who do well in contests, even if they are not picked. It also would need to have different bases for identifying top designers.

The other wrinkle is to allow a form of smartsourcing. Once the top designers are identified, they are invited for larger companies’ design projects. This is pretty similar to the current state of things, except the basis for access changes somewhat. It’s not just business relationships a designer/firm has established with the big ad/marketing.brand agencies. It’s based on performance.

With these two elements, I can see how crowdsourcing becomes more important, more disruptive, in the world of business design.

I’m @bhc3 on Twitter.

My Ten Favorite Tweets – Week Ending 030510

From the home office in Hawaii, where I swear those waves look bigger than normal…right?…you see it too, don’t you?…sorta…

#1: Funniest man on TV: Craig Ferguson http://bit.ly/brF6j2 by @berkun > “The lack of autonomy always explains mediocrity” #innovation

#2: Curation’s Growing Value http://bit.ly/a5JNnR > I also turned to Twitter more than news sites for #hitsunami updates

#3: Who are your positive deviants? (via Spigit blog) http://bit.ly/clDDJw #e20 #innovation

#4: Why CEOs Don’t Get Innovation http://bit.ly/9tgigJ @lindegaard‘s Business Week column #innovation

#5: Is collaboration enough to connect the dots? http://bit.ly/9oonRd on the Product Four blog #e20

#6: Interesting concept: “Social Sigma” (vs. Six Sigma) to improve products http://bit.ly/aWMlp2 by Forrester’s @gcolony #innovation

#7: This Just Ain’t Gonna Work Out http://bit.ly/cDcZU5 by First Round Capital’s @kentgoldman > Importance of pivoting business models

#8: Enterprise 2.0 Trends: Which vendors are in the running? http://bit.ly/anZI2Q by @markfidelman #e20

#9: Today’s @gapingvoid cartoon email is a fave of mine: “It’s easy to spot a purist. They’re the ones without any skin in the game.”

#10: I’ll admit: If I see one too many a “Hallmark card” inspirational quote from someone, I unfollow.

My Other Blog Covers Innovation, Crowdsourcing and Social Software

To really work, Sierra observed, an entrepreneur’s blog has to be about something bigger than his or her company and his or her product. This sounds simple, but it isn’t. It takes real discipline to not talk about yourself and your company. Blogging as a medium seems so personal, and often it is. But when you’re using a blog to promote a business, that blog can’t be about you, Sierra said. It has to be about your readers, who will, it’s hoped, become your customers. It has to be about making them awesome.

This is from Joel Spolsky’s Inc. column, where he also announces that he’s quitting his uber popular blog, Joel on Software. Which is incredible. Like Louis Gray giving up his blog.

Joel notes that he’s been at it for 10 years, and his company Fog Creek Software, has grown to the point where he needs to focus on its operations and alternative marketing modes. He does offer business owners some thoughts consistent with what “got him there” in terms of Fog Creek’s growth:

  • If you’re selling a clever attachment to a camera that diffuses harsh flash light, don’t talk about the technical features or about your holiday sale (10 percent off!). Make a list of 10 tips for being a better photographer.
  • If you’re opening a restaurant, don’t blog about your menu. Blog about great food. You’ll attract foodies who don’t care about your restaurant yet.
  • If you make superior, single-source chocolate, don’t write about that great trip you took to the Dominican Republic to source cocoa beans. That’s all about you. Instead, write the definitive article about making chocolate-covered strawberries.

Joel’s been at it longer than me, but those tips are spot-on for the way I approach writing on the Spigit blog. Don’t write endlessly about the product features and press releases. Write to illuminate and give identity to the nascent Innovation Management 2.0 market. What’s important to organizations beginning to look at innovation management seriously?

If You’re Tracking the Innovation Space…

To that end, I know I’ve got some readers here who have an interest in both Enterprise 2.0, and innovation. In addition to this blog, I’m writing relevant posts over on the Spigit blog. Many of these of have garnered a lot of attention (a republished version of one on Braden Kelley’s multi-author blog was the #3 most viewed post there for February).

But don’t just take my word for it. See what you think. Here are seven posts I’ve written over there. Do any of them grab you?

Study – Collaborative Networks Produce Better Ideas: Presents the research of University of Chicago professor Ron Burt, who found that more connected employees generated hiogher quality ideas.

Ideas as the Basis of Social Networks: Begins with a video by Brian Solis, who discusses the concept that ideas, more than pre-existing relationships, will be the basis of social networks. Then weaves in Joshua “Bokardo” Porter’s thoughts on social object design.

Crowdsourcing Is the New Collaboration: Compares the behaviors, groups formation and expectations between traditional collaboration and crowdsourcing. They each have a place inside organizations. Also, a good antidote to the rising outcry over spec work crowdsourcing contests.

Four Models of Competitive Crowdsourcing: Provides a look at four different ways organizations can engage customers and interested participants in the crowdsourcing process: Crowd Sentiment, Expert Decision; Crowd Decision; Expert Decision; American Idol.

Who Are Your Positive Deviants?: Positive deviance refers to practices that fall outside the standard ways in which things are done, and which provide much better than standard results. People trying unorthodox things. Finding and propagating these positive deviances is important for social and corporate advancement.

Gary Hamel: Hierarchy of Employee Traits for the Creative Economy: Hamel lays out what he views as the key employee traits in the future, as we shift from the Information Economy to Creative Economy: initiative, creativity, passion. Key for workers is to get above the line of commoditization.

Study – Distributed Idea Generation Outperforms Team Brainstorming: Researchers at INSEAD and Wharton conducted a rigorous field study, comparing in-person team brainstorming to individualized, distributed idea generation. They found distributed idea generation outperformed the old corporate standby, team brainstorming.

If those topics interest you, I encourage you to subscribe. For reference, here’s the blog’s RSS feed:

http://blog.spigit.com/feed/blog/Hutch

See you there.

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