From The Australian, Entrepreneur
TO some extent, Web 2.0 or the read-write web as it is known, is all about crowd sourcing. The idea is that the crowd can create content for you, give feedback and even have a hand in designing products they really want.
It’s a tricky concept for many companies to master but the latest generation of crowd-sourced websites such as 99designs and Gooruze are making it safe for businesses to participate.
There are many definitions of crowd sourcing, from reader-generated pictures and content on media sites, to online forums and sites where the crowd (users) will name a company, design a logo or even a pair of training shoes.
The first adventure in crowd sourcing of Perth-based co-founder and CEO of Vibe Capital Clay Cook was when he and his wife Rachel wanted parenting advice for their first child.
They weren’t sure of the veracity of the information that Google searches threw up.
In 2006, Vibe Capital raised $1.6 million to develop its own platform, which allows users to rate the advice that people give in forums. “We realised that there was a real need for the crowd or the community to create the world’s largest parenting resource,” says Cook.
The Minti site and forum was born and it has grown into a community that receives about 7000 unique visitors a day financed by advertising.
Meanwhile Vibe Capital has licensed its platform to develop other crowd-sourced resources.
The latest site is the advertiser funded Gooruze, which focuses on online marketing and cost $130,000 to start.
The Cooks and joint venture partner Jackie Shervington signed up 10 high-profile marketing gurus, including Duncan Riley, Andy Beal and Matt Dickman to seed the site.
“We ensured we had some professional bloggers, some professional people in the search engine marketing space, email and database. We wanted a very broad online marketing advice site,” says Cook.
In developing Vibe’s platform, Cook, founder and chairman of search engine optimisation company I Need Hits, ensured that entries would rank well in Google searches, from where most traffic is generated.
“Ninety per cent of our referrals each day come from Google — it’s all longtail stuff,” Cook says.
The next step in the evolution of crowd sourcing is 99designs, from Melbourne-based Mark Harbottle, the founder of web design forum Sitepoint in 1999. Harbottle noticed that in Sitepoint’s forums designers were holding competitions to design logos for friends’ businesses.
He took that content out of the forums and developed a platform where users could easily upload and vote on the designs, which are generated by users, created for real clients.
After running it for a year free of charge Harbottle branded it 99designs and started charging. “What we noticed is that we started charging for it and nobody dropped off. It actually got more busy,” says Harbottle. “There was obviously some value that they attributed to paying for it.”
The site charges $US39 for a company, which offers a cash prize, to start a design competition. But it is moving to a model where it will charge a percentage of the prize money, which is held in escrow, offered for a winning design.
Sydney-based Pxcream is following a similar model to 99designs for photography. It is developing a site which fills the gap left by companies such as Flickr or Picasa for semi-pro and pro photographers, who can sell their work on the site.
While Flickr concentrates on the low-end consumer market and social sharing, Pxcream, which is in private beta testing, is an exclusive community where the emphasis is on the quality rather than quantity.
The project is being self-funded by developer Pierre Sauvignon with much of the programming outsourced to India. The business model is based on subscription and revenue sharing of photo prints and gear purchases with the aim of keeping it advertisement free.
New-Zealand-based Ponoko, which is moving to San Francisco, takes the concept of crowd sourcing one step further. The company allows users to upload designs to its site, have products manufactured on demand in a selection of materials, and sell their designs.
Ponoko chief strategy officer Derek Elley says that the site takes Ikea and sourcing from China out of the equation, creating products that consumers want rather than compromise with.
“What I got excited about was the fact that as consumers we can go and push some buttons and create the product that we actually want.”
* www.minti.com
* www.99designs.com
* www.gooruze.com
* www.sitepoint.com
* www.pxcream.com
* www.ponoko.com