Crowd Expedtion travelled to Brussels to visit Crowdsourcingweek. Speakers and entrepreneurs talked about how can they can use crowdsourcing to improve their company and the world.

The Crowd Expedition team got up early in the morning on June 5th 2014 for a drive to Living Tomorrow, the innovation centre of Belgium. During Crowdsourcingweek Brussels (which is actually a two-day festival) Belgian, French, English and American speakers get on stage to tell the audience how they use crowdsourcing in their companies. We give you the most interesting insights and additional interviews with the speakers.

Introduction: why are we so exited about “this crowd-thing”?

According to Sean Moffitt (founder of Wikibrands, a book about the future of marketing), crowds are creating impact in business causes and government. Moffitt is researching crowdsourcing and during Crowdsourcingweek, he presents his first results. In his view, crowdsourcing is a synonym for the collaborative economy, social business and open innovation. “Crowdsourcing is huge in Europe. 54 precent of Europeans is willing to share”, he declares. There are three main reasons why entrepreneurs are attracted to “this crowd thing”, he explains: “Making money, producing better solutions for their business and creating a better world.” Most of the time, it’s a combination.

He gives a few nice examples of the impact of crowdsourcing. For example, an app in Brasil to get people under 30 engaged in politics. With Monitora, Brasil! , the makers try to create more transparancy and openness between the government and the people. Another example for a better world is Power Sleep, an app which enables you to donate the capacity of your phone while you sleep. While you don’t use your smartphone, the capacity of your device is used by medical students to make calculations to detect cancer.

Recently, McDonald’s launched a crowdsourcing campaign to develop a new hamburger line. A great way to innovate and do marketing with a singel campaign! Consumers can design and elect the best new burger. Another commercial example is Oculus: a virtual reality gaming device that could be produced thanks to crowdfunding from fans. After a few months, the start-up was bought by Facebook and became the first billion-dollar company that started on Kickstarter. Unfortunately, the fanbase of investors didn’t like it… read more.

Reasons for failure

Besides the inspiring examples, there are also a lot of campaigns that fail. According to Moffitt’s research, there are three main reasons for failure:

  1. Legal and regulatory hurdles (i.e. governmental laws, copyright issues)
  2. Time for staff to manage the campaign
  3. Organizational silos/adoption issues (not only a ‘one person job’, it needs to be integrated in the whole organization)

How do you make sure your campaign doesn’t fail?

Crowdfunding, laws and taxes

Koen Panis, lawyer at Loyens & Loeff, tries to tackle the first problem. He focusses on crowdfunding, a way to raise money for your cause of company using ‘the crowd’. In his presentation, he explains the steps you need to take to start a succesful crowdfunding campaign. “The first step in your crowdfunding campaign is determining who you are. What kind of product do you sell? How much money do you need, do you have access to additional funding? What’s your expertise? Based on this information, you choose your crowdfunding campaign.”

There are many structures possible, Panis explains. You can ask for donations, but you can also give out loans, rewards or equities. Whatever you do, let the crowd know what they signed up for. “Thanks to crowdfunding, anyone can be an investor. Rich or poor, higher or lower educated, from businessmen to housewives and students. You need to explain loud and clear to everyone what they can expect from you,” says Panis. What will happen if you fail? Make this really clear, otherwise your investors might be disappointed (or worse: feel swindled) if you don’t meet their expectations. Crowdfunding is considered a means of income and therefore you’re obligated to pay taxes. If you are subject to VAT, your funding goal must include:

  1. The funds to make the project
  2. Cost of rewards production
  3. Cost of rewards shippings
  4. Platform commission
  5. +/- 20 % of VAT to repay to the state.

As a lawyer, Panis finds crowdfunding really interesting. “This is just the beginning”, he says. “A lot is about to happen. Belgium is still trying to find ways to regulate crowdfunding, while more and more companies are using crowdfunding as an additional way of funding, next to ‘old’ funding from big investors and banks. One of the most interesting questions is what the crowdfundinglandscape will look like in a few years. Will there be aggregating platforms that let you manage all of your investments? Or will one big platform rise to be the main stage for all crowdfundingactivities?”

Crowdsourcing for innovation

Using a crowd to think about new products or services has many benefits. People outside your company have fresh ideas and making the development of a new product a fun competition is also a great way of marketing. People will have more enthusiasm for a product they helped to develop.

Chaordix (kay-or-dix) is a company that helps businesses to use crowdsourcing for product and brand innovation. According to CEO Shelley Kuipers, you can use crowdsourcing for multiple purposes: team insights, brand innovation, product innovation, business-to-business, social innovation. “Good crowdsourcing is not as easy as it might seem”, she explains. “You need to get your audience engaged, even before day one. You need to start building a community of enthusiastic participants. Tell them what’s ‘coming soon’, how they can reserve a spot and why they should be exited.” Storytelling is key: before, during and after the campaign. “That way you get more out of crowdsourcing than a one-time campaign. You can make it a persistent innovation channel”, she says.

Design is a popular subject for crowdsourcing. After Chaordix’s presentation, 99designs (logo design by the crowd) and eYeka (connecting brands and creatives) take the stage. eYeka: “An important thing for companies to understand is that our platform connects the crowd and delivers the ideas. Eventually, it’s the companies job to implement the new product.” Wim Soens, CEO of innovation platform CogniStreamer, stresses again the importance of communication: “Use the crowd to your advantage, but don’t let them take over. Communicate clearly that you’re the one making the final decision.” Otherwise, you might end up with products like this…

Who else did we talk to?

We had some interesting interviews with mobility platforms PiggyBee (product delivery by crowdsourcing) and Tapazz.com (Belgian ridesharing platform). We also talked to Yvan De Cock of BNP Pariabas Fortis (Belgian Public Bank), see the interview below! Tomorrow, Martijn Arets will join the roundtables about issues surrounding crowdsourcing. We’ll keep you updated.