Paid crowdsourcing is currently in the “innovators and early adopters” phase with the market suffering from lack of awareness, skepticism around getting results for such low costs and no familiar use cases. The panel will address the current state of the market and what’s coming next. The panelists, all experts in the crowdsourcing area, are listed below:

• Jeff Howe, Contributing Editor, WIRED, and author of the book “Crowdsourcing”
• John Winsor, VP/Exec Director, Strategy & Product Innovation at Crispin, Porter+Bogusky, and author of “Baked-In” and “Spark”
• Lukas Biewald, Founder, Dolores Labs
• Eckart Walther, SVP, LiveOps
• Brent Frei, Founder, Smartsheet

The Moderator is Marshall Kirkpatrick, ReadWriteWeb

SmartSheet, which provides online project collaboration applications, will also release the first-ever research report on paid crowdsourcing.  Attendees of the online event will get the report just beforehand.  The report includes 50 vendor rankings, 15 categories, six adoption hurdles and five predictions for the future.

Event registration and details are available at:  http://www.smartsheet.com/crowdwork

It (the degree of customization available) is a balance between providing the flexibility and the choice, but also making sure customers are going to be delighted with the end product. So, in our photo books, we offer a custom path [that lets] you change every background, template, layout, font. But then we also offer express books, or locked books, where we’ve actually chosen all that, and all you have to do is put a picture in.

It depends on the use occasion, the sophistication of the customer. In stationery, we want to make sure they’re following the appropriate etiquette. That the font is going to apply to the background. That the end product is going to be beautiful and delightful. And so, in that case we’re limiting the choice, so that we increase the overall satisfaction.

He goes on to describe how the company engages with its customers to research the questions described above:

Q. What kind of testing do you do? Do you get 20 people in a room together and have them fiddle with this stuff for an afternoon and figure out if they like the end product? How do you find that perfection?

A. It starts with involving the customer throughout the whole process. We do a lot of upfront prototyping and testing with customers. Then we actually create the creation paths, and we do usability studies. We’ll do in-home ethnographic studies. How people are using stationery in their lives? Where do they have trepidation or anxiety? Where [do] they want to be creative?

Then we put it out there, and we see how it works. Right, we’re a Web company, so our ability to change on the fly and move more quickly than the established commercial printing industry is much greater. And so we can be more responsive. But involving the consumer in the whole process is key to success.

This description reflects very closely the idea of ‘building a learning relationship with the customer’, which is seen in academic literature as an important component in the information cycle between the customer and the enterprise that uses mass customization.

2. The WATBlog, which provides news and information to connect the web, advertising and technology sectors in India, recently ran a ‘Saturday Startup‘ article which examined an Indian t-shirt company called Scopial that uses the crowdsourcing business model. In Scopial’s crowdsourcing system, submitted designs are voted by the community members on a scale of 1 to 5. Every fortnight, a design is declared winner and the respective designers get a reward of Rs. 20,000 cash. The designs are printed on T-shirts and made available on the website for sale.

This article is a little eye-opener to those of us in North America and Europe who perhaps limit our horizons sometimes when looking for examples of enterprises that use interesting business models.

2.  RPI, a provider of automated, mass-customized manufacturing and fulfillment for the consumer print-on-demand market, recently announced that it has set an industry record through the production of more than 1.3 million photo books in 2008.  This brings its overall production tally to three million photo books since the product’s launch, representing a 60 percent year-over-year growth.

3.  Tim O’Reilly, founder of the O’Reilly Publishing company that specialises in programming and other IT topics, gives an interview to The Inquirer, in which he notes:

“The deeper idea we’ve been exploring throughout all aspects of the company is the idea that a lot of times the most interesting technology can be discovered by what people do with it for fun.”

He gives a number of examples to support this idea, including the following:

“Open-source hardware is telling us something about the future of manufacturing – playing with mass customisation in various ways.”  This trend began with sites like Threadless, in which communities collaborate and vote on T-shirt designs; now there are all sorts of start-ups enabling people to design items for manufacturing.  “That’s open-source hardware.  People are realising there’s no real advantage in owning the design.  The cost may come down if more people use and manufacture the parts.”

4.  The AsiaOne website contains a reproduction of an article from Singapore newspaper The Business Times, in which Sivam Krish, CEO and founder of Genometri, describes the possibilities for user-generated content, and user-generated products.  He tells how:

“I was a former assistant professor in industrial design lecturer in the Department of Architecture at the National University of Singapore (NUS) for about three years.  During my classes, I found that the younger generation was able to create designs using a fundamentally different approach.I found them spending a lot of time in front of computers modifying computer-aided design models, and I felt that this could be automated.

……..

With the support of the university’s Industry Liaisons Office, I patented this technology that I felt could completely change the way products are designed.

Together with four friends, I set up a company called Genometri, to develop this core design technology and with a deep breath I took the leap from being an academic to an entrepreneur. NUS has a good support structure for funding. But as with all start-ups, there were its difficulties too.  Mine was in convincing designers to use the software I created.

After attending a conference in the US on mass customisation, I realised that the greater opportunity is in letting customers design and that most companies were trying to let their customers do this.

So we swung our B2B model to a B2C model, focusing on the consumer.  We launched a portal (www.jujups.com) as a design platform that would allow consumers to create personalised keepsakes, including mugs, t-shirts and 3D-printed photo frames, by using drag-and-drop functions.”

I hope to write a longer post on the current state of the 3D printing sector soon.

More links later!

Various aspects of user-centric business models have also been employed in the music sector. The use by Sellaband of crowdsourced band financing was previously covered here and elsewhere. Separately, the metal band Nine Inch Nails offers fans the facility to remix and upload their own versions of some tracks.

Now, two music industry companies at opposite ends of the size scale are using open innovation and crowdsourcing in new ways.

On 12 January last, EMI, the major music label, in association with BootB, “the online platform dedicated to challenge the marketing industry”, launched a worldwide competition to find innovative new ways to help consumers connect with music. The challenge, which is open to all creative sources (agencies, professionals, consultants, freelancers, innovative minds), is to find solutions for people who love good music but think it is currently hard to find.

BootB (Be out of the Box) is an online marketplace launched a year ago that allows anyone anywhere to respond to the creative briefs of major organizations and be paid professional fees for their ideas. BootB says that since it was launched, more than 10,000 people from 118 countries have joined the creative department of BootB to receive briefs and submit their ideas.

The press release announcing the project includes the following quote attributed to BootB’s Founder and CEO, Pier Ludovico Bancale: “As part of its new innovation strategy, EMI Music wants to leverage the power of BootB to solicit unconventional ideas from around the globe, and find a truly original, one-of-a kind innovation concept. This new extraordinary pitch confirms the relevance of our business model that is based on crowdsourcing of ideas. Original ideas will arrive from everywhere and the winner could come from anywhere.”

At the time of writing, the challenge is due to close in just under an hour. The page on the BootB site with details of the challenge shows that it has a budget of US$10,000 and 118 submissions. According to a comment from EMI, submissions could relate to an idea or a product solution, and not just a marketing idea.

At the other end of the scale, TechCrunch recently reported on Denmark-based startup Minimum Noise, which is planning to introduce crowdsourcing to music production, by “connecting musicians around the world in an open marketplace where like-minded artists can get together to create music tracks”.

According to the TechCrunch article:

..users can submit a project, describe what they’re looking for and what they’re prepared to pay for it. This can be anything from vocals to a bassline or the main instrumental riff, but the bottom line is that someone from the Minimum Noise community is supposed to run with the project and add a layer to whatever exists already. Typically, this would be something the project creator(s) or any of his musically gifted friends or family members are unable to accomplish without looking online for help. Project creators can accept submissions from other community members, pay him / her if they’re happy with the results and obtain the necessary material and rights of usage.

Comments to the TechCrunch article offered mixed views as to the prospects for Minimum Noise. Its prospects may be helped or hindered by how well it enables the process of co-operation between members.

These developments are reflective of a recognition, by both the large incumbents and small players in the music industry, that the closed models of the past are now history. The process of innovation can shift the ground under existing players in a very short space of time. How many of today’s major labels will still exist in ten year’s time? Will major labels exist at all by then? What business model will dominate in the future?

In the case of EMI, the BootB initiative signals, on some level, a willingness to change and innovate. In five years time, the majors may, by adapting to the changing nature of the sector, continue to dominate the world market for music. Alternatively, the market may shift completely to one where artists, serviced by innovative companies like Minimum Noise, sell directly to music consumers, with extensive use of a ‘freemium‘ business model, where some music is given away free to entice consumers to purchase premium music and related products.

In some cases, the crowdsourcing model used involved a reward of some kind for contributors, on other occasions there is not. I’ve previously expressed my own opinions on this, so won’t repeat them here. Other writers have recently looked at this variation in approaches to crowdsourcing. Firstly, Scott Klososky in Technology Story has described a classification for the different types of crowdsourcing:

Voluntary vs. Involuntary – Wikipedia asks for voluntary contributions to its online encyclopedia. By contrast, Google’s image indexing game is an involuntary crowdsourcing scheme to index images by leveraging the brain power of the people playing the game.

Social vs. Commercial – Yahoo Answers is an example of a social crowdsourcing operation where the community of users is crowdsourced to provide the underlying product – which is advice.  On the commercial side of this same model is Name This, which pays contributors to offer advice to companies trying to develop brand and company names.

Rewarded vs. Unrewarded – Innocentive is a site that allows companies to post problems that they need solved with a specific bounty that can be earned if someone has a solution. By contrast Dell’s Ideastorm, and Starbucks mystarbucksidea, provide a place for customers to give product advice with no reward other than maybe getting these large organizations to improve their products. Or, as Scott Klososky says “In other words, free market resource leveraging the herd.”

The potential for business to exploit a pool of free labour through crowdsourcing initiatives may not be the bonanza envisaged. Writing in CRM Buyer, Erika Morphy notes that:

“The crowd is beginning to look like an incredibly large, wise, cheap labor pool. Fortunately, it’s also unwieldy, which may be the crowd’s saving grace”.

The article describes a number of examples in the crowdsourcing sphere. LiveOps uses a form of crowdsourcing, which it calls “crowdsourcing BPO” – to schedule the 20,000 home agents that support its call centre operations. Essentially, it sources complex calls to agents that have the expertise to handle the topic. An interesting comment is made by Eckart Walther, SVP of marketplace at LiveOps:

“Almost all crowdsourcing plays I have seen so far use an oversupply of people,” he noted. “That doesn’t work in the real world because it is not practical.” For starters, he said, a company cannot pay all those people — and expecting consistently high-quality work from volunteers is not realistic.

Should crowdsourcing initiatives limit the potential population of contributors to those most likely to make valuable contributions? It depends on the nature of the initiative. Innocentive, an online community where companies can post problems they need solved, is theoretically open to anyone to contribute. However, the complex nature of the problems posted will, in themselves, filter the quality of responses to some degree.

By contrast, a crowdsourcing initiative for technical support may attract contributors whose confidence in offering solutions is not matched by their abilities. The possibility of incorrect solutions being offered is relatively high in such cases. Perhaps in this circumstance, some process for filtering of applicant contributors is appropriate to ensure the integrity of the initiative.

The dream of ‘free labour’ (or ‘free labor’ in U.S. English) envisaged by some businesses may turn out to be a double-edged sword, as a business wishing to leverage the contributions of the masses may have to minimise the difficulty of the challenge, which may have the undesired and paradoxical consequence of lowering the quality of contributions.

A third category of crowdsourcing is where ‘solutions’ are not offered in response to a technical challenge, but to an invitation to contribute visual design or other non-technical contribution. Obvious examples include the crowdsourced clothing enterprise Threadless.com. In this case, there is no need to raise barriers to entry, as the community will collectively vote on the contributors effort, based on their tastes rather than any specific knowledge base.

In all of the above scenarios, the idea of paying all contributors is clearly nonsensical. It is the successful contributors whose efforts should be rewarded. To achieve the objective of leveraging the knowledge of the masses, business must realise that to get the best answers, it is necessary to attract those who can give them, and these are the people who also best know the value of the knowledge they hold.

Company head Jay Rogers and his staff of nine have built a system that:

“so far is 50 percent Web 2.0 social community and 50 percent rapid-prototyping workshop. The first half of Rogers’ big idea is tospeed up the design process—and, in theory at least, tap directly into consumers’ own ideas about what they want from their next car—by staging online design competitions. Hobbyists and professionals alike are invited to join Local Motors’ online studio and submit their 2-D sketches and renderings for periodic contests focused on cars for different geographic areas. Community members vote on the designs, and the winners get not only cash prizes ($2,000 for first place, $550 for second, $300 for third) but a shot at having their design turned into a production vehicle. The company pays the final selectees $10,000 for the right to the production-bound designs.”

The company will then take the selected designs into full-scale, 3-D engineering plans, designed to use as many off-the-shelf parts as possible.

Many of the recent rounds of the design competition have asked participants for designs that are inspired by various locations within the U.S., for example the tagline for the current ‘Chicago’ competition is “Driven by Humanism, Gangster by Design”.

Local Motors Chicago competition poster

Local Motors wants to build a network of 50 small assembly plants around the United States, where engineers would essentially hand-craft vehicles, with help from the buyers themselves, at least in the beginning. The company will limit production to runs of between 1,000 and 2,000 cars per year per factory, miniscule figures by comparison with the mainstream auto industry. However, the company’s target market is not regular car buyers but rather those from the auto enthusiast sector, who may well be involved in motorsport or kit-car building.

In the XConomy article, Jay Rogers focuses on the ‘green’ credentials of the Local Motors concept, referring to the goal of making the cars lighter than mainstream equivalents, therefore improving fuel economy. From his experience of the Iraq war, he is also interested in reducing the U.S. dependency on imported oil.

Separately, he makes an interesting comment on the inability of large manufacturers to respond to changing consumer preferences:

“I looked at the supply chain and I saw that there are people who make great engines, great batteries, great lightweight materials—but the people who make cars can’t use them, because they’ve gotten stuck in their enormous apparatus.”

He notes that this will delay the large U.S. automakers in particular from responding to the fall in demand for SUV’s and other larger vehicles. I made similar observations in a post titled ‘Car Trouble‘ two years ago. This difficulty in responding to changing customer demand had been foreseen by many commentators in the automotive media. There is also a certain amount of overlap between some of the ideas in my Car Trouble – Part 2 post, and Local Motors strategy of using ‘off-the-shelf’ components wherever possible.

Local Motors is admirable for offering winning contributors to their crowdsourcing project rewards in cold, hard cash, compared with the ‘free labour‘ view held by some.

As the XConomy article notes, the history of the auto sector is littered with stories of companies that started promisingly but fizzled out after a few years.  However, many of those companies were trying to emulate the mainstream manufacturers in the way they organised themselves.  Because Local Motors is starting from a ‘blank page’ in terms of so many aspects, from design to supply chain, it may at least have a better chance of success than many of those other small manufacturers that came (and went) before.

Members will discuss, debate and collaborate on all aspects of the vehicle’s design through the Splitwheel.com website.  Key design decisions will be decided by a regular vote, covering everything from the chassis layout and engine choice to hundreds of more detailed decisions on the suspension, interior, body and all other aspects of the car. The project managers will provide users with in‐depth analysis on the key issues around the car.

The website will use a combination of forum discussion, a Wikipedia-style user-edited knowledge base and a comprehensive voting system to turn user input into a workable vehicle design.  Along with acting as a liaison with Caterham’s engineering team, Project Splitwheel will also provide guidance and input from other automotive suppliers and experts as required.

Caterham will work with Splitwheel members on translating our specification and designs into a real world prototype vehicle over the next 2-3 years. Providing that Project Splitwheel provides a realistic specification and business case for the car, Caterham will commence build of the prototype in 2010.

While some petrolheads may be dreaming of designing a rival to the Bugatti Veyron, the design to come out of this process must also be a viable, saleable product for the real world that Caterham can realise.  The most important factor is that the car must be enjoyable for an enthusiast to own and drive in its own right.

While the objective of the project is to put the completed design into full production, this will inevitably depend on many factors, including production and material costs, economic conditions and market demand.

The project is open to ordinary car enthusiasts, and not just trained engineers.  The Splitwheel website states that:

Whilst expert technical input will be welcomed and sometimes necessary, first and foremost we want to recruit ‘ordinary’ car enthusiasts. Anybody with a passion for cars is welcomed. Any technically complex issues will always be broken down and explained in plain English.

The Splitwheel.com website currently has explanations of the project and other related information, but the crowdsourcing element is not yet active. It is expected that the full site will be launched before the end of 2008 , with the project starting in earnest in the New Year.

Members who contribute a worthwhile idea or suggestion to the Project will have their efforts “recognised by the team”, although it is not yet specified what form this recognition will take.

For those who are unfamiliar with Caterham, it is a British sports car manufacturer that originally bought the rights to the Lotus Seven when the Lotus company discontinued that particular model. Caterham continued to develop the car, with a wide variety of engines used over the years. However, today’s Caterhams retain the distinctive ‘cigar-shaped’ bodywork of their Lotus forebear. The company’s products are generally highly rated by the motoring press. The Caterham is designed to be a lightweight, well-handling car, rather than a massively powerful one. Its agility and lack of weight means that it is often quicker on a track than many more powerful cars.

I recall a television documentary during the 1990′s which followed Caterham’s efforts to move away from the ‘cigar shape’ to a more modern design. The result of that process was the Caterham 21, which was not a commercial success. The 21 was expensive, but what really killed it off was the re-appearance of other lightweight sportscars such as the Lotus Elise, with which it could not compete.

In view of its past experiences, Caterham will probably be hoping that the Splitwheel project produces a design that is in line with the spirit of the existing Seven.

Make Your Own Jeans, which provides made-to-measure denim fashions at affordable prices, has announced a new add-on service that allows clients to customize their jeans beyond the fabric, style, and cut and extends the customer’s level of control down to the thread color, trims, belt loops, pockets, rips, patches, and even allows the customer to “brand” their jeans with hand embroidered labels.

The most interesting extract from my viewpoint is from Chapter 6, which describes ‘characteristics of the new business model’. The characteristics on the list reflect in particular the evolution of the computer games sector in recent years, but read like a manifesto for a culture of customer-empowerment in any sector of economic activity.

I’ve reproduced an abbrevated version of these characteristics below:

1. The lines between producer and consumer are blurred.
2. The company moves from being the producer or distributor of goods or the provider of services to the aggregator of products, services, tools and experiences to allow the customer to meet the needs of their personal agenda, or in bizbuzz, their personal value chain.
3. The users and producers are engaged in the co-creation of value.
4. The users have the tools to configure and/or customize their personal experience with the product.
5. The users and the producers encourage each other and mutually define the future directions of the specific products.
6. Even though the users are working on the product changes for their own experience, the changes to the product have universal and commercial value and drive the sales of the product.
7. The producer is not just the publisher/manufacturer but operates as an aggregator for the user’s creative interactivity.
8. The user is not just a purchaser but also an advocate of the experience around the product and by extension, the company.
9. There is a collaborative customer experience that provides transparency for the customer into the inner workings of the companies themselves.
10. The companies encourage the customization and personalization of the experience of the customer.
11. The companies and the customers jointly create and provide the tools to make this collaboration successful.
12. In fact, the customization effort itself, not just the result, is part of the experience, thus enhancing the producer/consumer collaboration all the more.
13. The overall effort involves a corporate culture that is defined by the voice of the customer first.
14. The model uses and provides the most advanced technological tools that exist vis a vis the use of the Internet for these globally matriced communities that are interactive and real time.
15. The company and the customer each get value in ways that are appropriate and satisfying to them.
16. The company’s revenues increase accordingly, as does their profitability, given that their customers are doing something freely – and for free.

The full version of the list above, with the context from the games sector, was published by Paul Greenberg last August but only came to my attention very recently. The full version is in his blog post Chapter 6: New Business Models.

The list is a something of a reminder of the 1999 Cluetrain Manifesto written by Rick Levine, Christopher Locke, Doc Searls, and David Weinberger, consisting of a set of 95 theses organized and put forward as a call to action, for all businesses operating within what is suggested to be a newly-connected marketplace. The ideas put forward within the Cluetrain Manifesto aimed to examine the impact of the Internet on both markets (consumers) and organizations.

Paul Greenberg’s ‘Characteristics of the New Business Model’ are the best and most comprehensive description I have seen of the trend towards growing customer/user involvement in the activities of the enterprise.

While the Characteristics were written as a description, they may also turn out to become a set of principles – a goal to be achieved by any enterprise that hopes to thrive in the new reality of an customer-empowered environment. However, while the list is an accurate and comprehensive assessment of the current state of the games sector, it has one omission if it were to be employed as a set of principles for a new business model – it does not foresee a business relationship where the customer benefits in a financial or other tangible way for their contribution towards the increased revenues and profitability referred to in point number 16.

I trust that Paul Greenberg will not object if, in the context of using the list as a set of principles rather than a description of the trend as it currently exists, I would propose dropping the last three words (“and for free”) from point number 16 add a seventeenth point:

17. “The company, in a desire to maintain the long term strength of the relationship, will provide a structure by which the customers whose contributions most significantly benefit its revenues and profitability will receive tangible benefit for their efforts in recognition of their contributions, or where the contributions are of a suitable form, facilitate and encourage their free trade directly between customers.”

I have to declare a point of view here – I am strongly of the opinion that customers, who may contribute significant effort towards the development of a product or service, should have something to show for their effort in addition to the intrinsic benefits that flow from their participation in user creativity.

Yerzies has been founded by Scott Killian and Tim Brule. The press release announcing the launch of Yerzies refers to the founders also having “helped pioneer online apparel mass customization with FanBuzz in 1996″.

Beyond printed tee shirts, Yerzies enables the creation of stitched sweatshirts and mixed-media designs that include metallic foils, glitters and other processes to create apparel which more closely resembles the design trends seen at retail. This includes printing on dark garments, metallic foils, flocks, glitters, glow-in-the-dark materials and stitched processes.

When they’re finished, users can purchase a single piece or set-up shop at Yerzies and sell their creations to other users. Where Yerzies, to my knowledge, has gone one step beyond the other players in this marketplace, is through a feature called “Make it Yerz”, that allows users to mix and match product options and in some cases, even make modifications to the content created by other users. This is very much a reflection of the ‘remix’ culture that has been present for some years in the area of user-generated content in areas such as music and film. It is probably a natural progression for this culture to migrate to the apparel sector, which is already characterised by a high level of creativity.

A quick road test of the Yerzies website shows that they even refer to designs which can be modified as a “Mashable design”, meaning that the original designer has decided to allow other users to modify their original design to create something entirely new.  However, mashed up designs cannot be re-sold by the person who uses this facility.

The configurator uses the concept of ‘layers’, which will be familiar to anyone that has worked with photo editing software. Users can upload their own images to a new layer, or use layers to add extra features from Yerzies range of options. Each design element can be saved as a separate layer within the Yerzies configurator and modified independently of the others. Therefore, if the user wants to go back and modify some part of a design, they can select the layer in question and work on it without disturbing the other aspects of the overall design. It’s a very clever adaptation of the layers concept,

While users can re-size or re-position the original design, and add additional elements to it in new layers, it appears however that there is not the option to actually change the ‘core’ of the original design. For example, I experimented with one design called ‘Rock God’, and found that it was not possible to change the colouring of the text or vary the text itself.

Yerzies says that it is also rolling out a series of robust tools for users to share and market the content they create including widgets that can be placed on their website, blog or favorite social networking site without any programming expertise. In the press release, Scott Killian is quoted as saying: “We allow anybody to create and sell their own designs. Each user decides how much they want to mark them up and they keep the profits.”

In addition to providing a platform for user-generated content, Yerzies has also licensed content from third-parties including typefaces from designers such as Ray Larabie which users can incorporate into their designs. “Helvetica and Times Roman might work nicely for writing a novel” said Killian, “but they don’t necessarily look great on a hooded sweatshirt. We’ve licensed trend-right typefaces that will actually look cool on a tee shirt or hoodie.”

Last year, Yerzies also engaged The Wildlfower Group, a New York-based licensing agency to assist the company with securing licenses with various entertainment and lifestyle properties. In addition to creating their own apparel, users will also have the option to purchase licensed apparel bearing the trademarks of various brands. “Over 20 properties have granted licenses to Yerzies including lifestyle brands David & Goliath, Ripple Junction, ODM and Changes, entertainment and media brands Pink Panther, Planet Earth and Speed Racer and consumer products brands such as Dubble Bubble and Jolt Cola.

The facility to re-use and modify existing designs certainly gives Yerzies an unique selling point compared with other online marketplaces for custom clothing.  Although very new, the website seems to have no difficulty in attracting members.  One to watch.

Custom furniture maker Context Furniture has launched a new website called Design Democracy ’08 – Power to the People, which they describe as a grass roots event aimed at raiseing awareness about mass customization.

This website offers curriculum for DD08 ‘citizens’ (members) to learn about mass customization processes, philosophies, materials, design elements and software/hardware applications.  Most interestingly, to prove that mass customization is a viable alternative to mass manufacturing, Context Furniture will produce and display designs chosen from this website at the 2008 International Contemporary Furniture Fair in New York.

DD08 is a symposium and not a competition – the designs chosen for display at ICFF will not be put into production by Context Furniture.  The initial focus of DD08 is in attempting to prove that there is a demand for Mass Customization.  While there is currently not a feature on the site that allows for a user to get a quote and initiate production, Context Furniture’s goal moving forward is to incorporate features such as cost analysis and quoting, as well as production times for those parties interested in the realization of their products.
Each entry will be posted on the www.designdemocracy08.com website where participants can discuss ideas, rate each others designs and read articles pertaining to mass-customization, product design, manufacturing, and related software technologies.

A panel of industry professionals will review all entries and decide upon designs to be produced and debuted at the 2008 ICFF.  In addition to being viewed on the website each entry will be visually represented at the 2008 ICFF Context Furniture booth in New York City.  A “people’s choice” design will also be produced as ratings from the website and on-site ICFF voting are tallied.

Context Furniture encourages everyone and anyone to participate. The design districts will include, design enthusiast consumers, students, and design professionals.  Any image, from a scanned napkin sketch drawing to a 3-D model can be entered for submission, and a Design Democracy Citizen may contribute as many designs as they choose to.

Designs to be produced for the ICFF will be selected from submissions posted before March 21, 2008.  Context will be giving the manufactured pieces to the individuals whose designs are chosen for display at ICFF as a thank you for their efforts and participation.

An interesting trend which is growing among mass customizing enterprises is a new focus on the environmental benefits of mass customization.  Context Furniture is excited about the prospect of changing from a mass manufactured model to a mass customized one partly because they find it environmentally friendly.  Mass manufacturing concepts are based upon producing and item for as cheap as possible.  Mass customization, though not the cheapest, does compete on price point, but has environmental advantages.  “We consider making a product that we know has a specific demand a more responsible way to produce, says Bryce Moore, co-owner of Context.  Kerry Moore adds, “This event is about addressing the idea of how the world interacts with the goods it creates. Mass manufacturing has been the standard for over 100-years.  Isn’t there a better way, a new way?”

Kerry and Bryce Moore wrote a number of interesting articles on mass customization in the furniture sector in 2007, which were referenced on a previous MadeForOne.com post.  Their articles have been re-published on the Design Democracy website here.

Context Furniture’s design process began by drawing simple outlines in graphics software applications, then translating those graphics into furniture by using laminated plywood panels, digital technologies, and CNC routers.  Context has produced three collections using these processes, from solid pieces, to component based designs, to flat-pack RTA furniture.  The versatility of the process allows for limitless design possibilities.
Designs can be uploaded to the DD08 website in a wide variety of file types.  By providing for non-digital drawings, Context Furniture has allow users who do not have access or choose not to use digital programs for designing an acceptable way to participate; these users can upload a text file to describe in accurate detail the sizes, dimensions, etc within their designs.

Of particular note is the equitable terms under which members’ designs are submitted:

“We will absolutely not sell your design to a third party, because it and its copyright belong to you.  However, there is the future possibility of licensing your design for sale, if mutually desirable. That process would involve setting the terms of an arrangement with royalties and fees payable to you, the owner. You can sell your design, manufacture on your own, etc. at any time you choose with whomever you choose however you choose.”

As customer-design for manufactured products is generally at a very early stage of development, comparisons between the IP terms of DD08 and other customer design sites is not realistic.  However, in the wider context of user-generated intellectual property, the DD08 IP terms are in stark contrast to the massively one-sided terms imposed by many websites that rely on user-generated content for their existence.

Presently, the DD08 contains a handful of designs across a variety of categories.  The uploading of designs is a very simple process.  Critical to the success of the initiative will be its ability to attract a critical mass of participants that will enable a momentum or ‘buzz’ to develop around the DD08 site and the design symposium.  Context Furniture are to be complimented on their efforts to publicise and advocate the mass customization model through the DD08 project.

The book opens by telling the story of Goldcorp Inc., a mining company that was on a downward slope due to strikes, lingering debts, and an exceedingly high cost of production. The company’s fifty year old mine in Ontario was presumed to be nearly exhausted. Goldcorp CEO Rob McEwen, a newcomer to the mining sector, approved $10M of investment in additional exploration. Results were positive, with test drilling suggesting large new deposits of gold, but pinpointing the exact locations of the gold was proving to be an insurmountable challenge for Goldcorp’s employees. By coincidence, McEwen attended a conference where the subject of Linux, the open source computer operating system, came up for discussion. McEwen had an epiphany – why not adopt the open source model for Goldcorp’s mining activities? This is exactly what he did. In March 2000, the “Goldcorp Challenge” was launched with $575,000 in prize money. All of Goldcorp’s geological data was published on the company website, with an invitation for anyone to contribute their knowledge on how the gold might be located within the 55,000 acre property.

By the time the process was completed, entries arrived from geologists, graduate students, consultants, mathematicians and military officers. The contestants had identified 110 possible targets on the property, of which over 80% proved correct. Since the challenge was inititated, eight million ounces of new gold deposits have been found, and Goldcorp has moved from being a $100M company to being a $9Bn company.

Goldcorp is perhaps one of the best examples of how a business can benefit from breaking down the walls which exist between it and the outside world. The traditional thinking has always been that research is secret, and only trusted employees should be involved. However, the success of community-based activity for non-commercial projects like Linux and Mozilla has presented new possibilities and a new outlook for many companies, who are re-thinking their traditional viewpoints on how they interact with customers, competitors, and the world at large.

Don Tapscott and Anthony D. Williams, the authors of Wikinomics, build a convincing case for the benefits of breaking down barriers between business and potential outside sources of competitive advantage. They highlight the growth of new movements that are both a cause and a reflection of this new thinking. Firstly, the Peer Pioneers, most typically associated with free software projects such as Linux, but who have applied open source principles to create a multitude of products made of bits – in other words, information products. These include the many millions of contributors to open encyclopedia Wikipedia, and collaborative projects in many different areas of software development and scientific research.

Another development gathering pace is the ‘Ideagora’ – a marketplace for ideas, where questions can find solutions and solutions can find questions. Williams and Tapscott suggest that it is comparable to a classifieds site like craigslist.com, except rather than job ads and personals it posts a list of ideas and inventions that are ‘for sale’ or ‘wanted’. Examples of ideagoras are Yet2.com (which was new to me) and Fellowforce.com (featured on this site here recently (and again).

The next trend highlighted in Wikinomics is the growth of ‘Prosumers’. This term will be familiar to anyone who has studied mass customization. Originally the term was coined by Alvin Toffler in his book ‘The First Wave’, and referred to the ‘producer and consumer acting in concert’. It was sometimes used to label those customers who sought out mass customized products. However, Williams and Tapscott use the term differently, to describe the growing number of customers who are prepared to ‘hack’ products and adapt them in ways never envisaged by the producers. Wikinomics notes that the idea of amateur innovation goes back many years.  A perfect example is the story of how hot-rodding of cars developed in the late 1940′s and 1950′s.  Today’s amateur innovators have the advantage of the web where, instead of just sharing an idea with their neighbour, they can share it with thousands of fellow product hackers through online communities.

Examples of prosumerism today include communities that have grown around platforms such as Lego Mindstorms, the Apple iPod, and the Toyota Prius.  In many cases, after initial reluctance, the producer has engaged with these communities and involved them in the official innovation process.

Next up in this gallery of trends are a group of people called ‘The New Alexandrians’.  The original Great Library of Alexandria is reputed to have contained volumes on all the scientific knowledge then known.  Now, in the period of the fastest and broadest accumulation of human knowledge ever known, there is a new generation of Alexandrians who are again collating all the knowledge that exists.  These Alexandrians range from Google to librarians at institutions such as Harvard, Oxford and Stanford, who are scanning thousands of books and turning them into bits.  Along with media of all varieties, these digitized books will be sewn together into a universal library of knowledge and human culture.

This Alexandrian culture is also giving rise to a new age of collaborative science.  As Tapscott and Williams state:

“The emergence of open-access publishing and new Web services will place infinite reams of knowledge in the hands of individuals and help weave globally distributed communities of peers.  The rise of large-scale collaborations in domains such as earth sciences and biology, meanwhile, will help scientific communities launch an uprecedented attack on problems such as global warming and HIV/AIDS.  All considered, leading scientific observers expect more change in the next fifty years of science than in the last four hundred years of enquiry.”

Many different examples of scientific collaboration projects are described in the book.  Projects like the Human Genome Project, and Bioinformatics.org all use collaborative open source techniques to advance biological and medical research.  In  documenting this trend for a wider audience, Tapscott and Williams are providing a very effective rebuttal to those who have suggested that participants in open source initiatives are only interested in electronic gadgets.

Wikinomics also examines the ‘Platforms for Participation’ – the technical environments that have been developed to facilitate user innovation and interaction.  In many cases, these are application programming interfaces (API’s), developed by the likes of Google, Amazon and eBay, that enable small businesses and individuals to build innovative applications never envisaged by the companies themselves.  Such platforms do not just exist in the commercial sector.  Many not-for-profit organisations have built systems that examine publicly available data (in the U.S. at least) on pollution, crime and social cohesion.

The book also looks at what the authors call ‘The Global Plant Floor’.  This examines the possibilities for digital fabrication.  It also examines the possibilities for open architectures (i.e. an open basic design to which components of various kinds can be added, such as that used in personal computers) to be used in many other industries.  The book profiles the Lifan motorcycle company, that uses an open basic architecture on its motorcycles, which means that components from many different sources can be used without changing the basic design.  Tapscott and Williams use the example of Lifan to dismiss the idea that peer production is only suited to creating information-based goods.  They note that if physical products are designed to be modular, then, theoretically at least, large numbers of lightly co-ordinated supplies can engage in designing and building components for the product, much like the thousands of Wikipedians add to and modify Wikipedia’s entries.

The book rounds off with an examination of the ‘Wiki Workplace’.  This, as you can imagine, is a working environment which places far greater levels of reliance on staff to contribute towards organisational development and innovation in business process.  It is very hard to argue with the ideas put forward, especially when one reads the the account of how Geek Squad, an IT home-assistance service, has applied them to its business.

Personally, I have found books that deal with the trend towards peer production and open collaboration models to be interesting, but sometimes lacking in flow and not always easy to read.  Wikinomics is both informative and entertaining – it’s actually enjoyable to read.  I must admit that I got a little bit of satisfaction from the account of Lifan’s use of open architectures on motorcycles, as I had suggested something similar for the auto industry a few months ago.  Of course, few would believe me when I say I hadn’t read the book first.

Business books tend to go out of date quickly.  However, I expect that Wikinomics will be read for generations to come as a chronicle of how many of the existing assumptions about business fell away to be replaced by a new, distributed and collaborative approach  in the early 21st Century.
The authors and publishers of Wikinomics have adopted the open collaborative strategy themselves:  An addition to the book, called the Wikinomics Playbook, has been compiled using peer production techniques and is expected to be published shortly.

Jeff Crites, Fellowforce.com Director in North America, explained: “We started our platform for Open Innovation two months ago, and since then we’ve received ideas and suggestions for leading brands worldwide. The idea for this new service is due in large part to a submission in our own innovation box. A Fellowforce ‘Fellow’, Marcel Heinkens of the Netherlands, suggested we offer an Open Innovation widget for websites. Today, four weeks later, we’re introducing the ‘Innovate Us’ button, enabling any business to welcome ideas from a global force of innovators”.

FellowForce describes the ‘Innovate Us’ button as being like a ‘Digg-this’ application for innovation, empowering and encouraging consumers to submit ideas to company controlled (Fellowforce enabled) innovation boxes. “We prefer to call them Innovation Boxes because consumer participation is more than just a feedback tool”, adds Crites, “it’s a driver for innovation. And for companies, this is like having a souped-up RSS aggregator to manage idea feeds.”

The basic ‘Innovate Us’ button is free of charge, but companies can also upgrade for full facilitation, customization and complete open innovation box solutions. Consumers can see status reports on their submissions, so the process is transparent between parties. Fellowforce says it will soon launch an Innovation Forum, giving companies the option to take ‘Innovate Us’ ideas into the open for feedback from Fellows – adding an important social networking element to the innovation process.

Among the early adopters of the widget are FloorWindo International, the Mindtrek Conference, Telme Clothing and BizzFlip, described as a niche Craigslist for business.

Companies can post ‘innovation challenges’ on the FellowForce Challenge Board, and the  ‘Innovate Us’ button will be connected to their ‘Innovation Box’.  This means that users of the companies’ websites, who might never otherwise be aware of open innovation, have a means to propose innovations to the company in question through the FellowForce system.

With this new widget, FellowForce can bring open innovation to a potentially huge audience of visitors to the websites of other companies.  It reduces somewhat the need to spend large resources on publicising the FellowForce website.  The marketing focus is likely to shift towards persuading as many companies as possible to adopt their service and use the FellowForce widget on their websites.

Springwise reports that, over the last year, fans have invested over USD 1,000,000 in various bands through Sellaband. Seven bands have so far raised the US$50,000 required (by having 5,000 parts sold at $10 each) to get to the recording studio. Three of these have already produced and launched their first album, and the other four are currently in the recording studio. In total, 4,806 artists signed up to SellaBand. The first band to raise USD 50,000 was Nemesea, which did so in 83 days.

A second crowdfinancing project called VIPbandmanager is recruiting 50,000 band managers to propel a band to stardom. VIPbandmanager is somewhat different in its approach, concentrating on the creation and management of a single group. For a STG£20 lifetime fee, which is collected after 50,000 people have signed up, managers get to vote on every aspect of the new group. According to Springwise:

“After the band has been formed, members will continue to make all the behind-the-scenes decisions and plans that artist managers and record labels make: choosing producers, helping pick tracks, deciding on the band’s image and promotion, organizing a UK tour and, of course, reaching the top of the charts. The latter will be aided by the viral marketing clout of 50,000 fervent fans.”

The 50,000 particpants gain perks including “entrance to exclusive parties” (which could be less exclusive if they all come to the same one!), goody bags and backstage access.

The principals of VIPbandmanager are founder Mark James Bowness and manager Sam Bush, himself a former participant of the UK reality TV show Shipwrecked.

These two projects take different approaches to the crowdsourcing model. Sellaband is fits more closely within the conventional undrstanding of crowdsourcing, whereas VIPbandmanager is probably closer to a reality TV show in its format. The returns for the participants in each case might, at first glance, seem to be paltry. However, it must be taken into account that the users do not contribute intellectually to the projects (e.g. no-one is asked to contribute guitar riffs or lyrics). So while the projects are using participants contributions of €10 or £20, they still have to put in the work themselves.

Project Red Stripe was established in September 2006, and consisted of a six-member core group comprised of The Economist Group’s employees that had been brought together with the task of creating an innovative and web-based product, service or business model by July 2007. The core team consisted of Ludwig Siegele, German correspondent for The Economist, Joanna Slykerman, formerly Marketing Manager across all EMEA territories of the Economist Intelligence Unit, Steven Chiu of the Economist Intelligence Unit, and Mike Seery, CIO of The Economist Group.

In addition to the research which the core group conducted in-house, they solicited ideas from the outside world in an effort to attract submissions from a diverse group of people.

Following the initial launch of the project, the Red Stripe team held webcasts to further explain how individuals could participate, and took questions online during the webcasts. These questions and answers formed the basis for the projects FAQ.

One of the core team said at the time: “Being able to tap into (and maybe even pay for) outside knowledge and experience to help with the development of our idea will be especially useful if we can make it a collaborative experience.”

The outside participants chosen to take part in the project were selected during December 2006/January 2007. At the end of January, the new team members were introduced and some broad principles were scoped to guide the project.

With the team established, the task was divided into four basic items: setting up a framework for developing new ideas; brainstorming and choosing the best ideas; developing the ideas; and then writing the business plan and presenting the finished product.

At this stage the question of whether the project would conflict with the overall objectives of the Economist Group. However, it was noted that, while other publications were suffering from ads and readers moving online, the Economist’s advertising revenues were increasing and the group has never been more profitable. This gave the Economist Group the confidence to be more experimental about what it does on the Internet.

Around the same time that Project Red Stripe was gathering momentum, the concept of companies gathering ideas from the outside world was becoming more commonplace. In the space of a week, Yahoo! and Dell launched idea-gathering sites. A this point the core team had to consider the tricky issue of intellectual property – who would own the ideas that were to be submitted to Project Red Stripe? As one of the team noted on the Project Red Stripe blog, “If we don’t deal with this issue from the start, it could come back to haunt us later – particularly if we dream up a money maker.”

In the end, the terms of Project Red Stripe stated that The Economist Group would own whatever ideas were submitted. This was seen as the only practical way of dealing with the matter. However, it was less restrictive that the terms on Dell’s Ideastorm which prevented users from otherwise marketing their idea.

One practical incentive on offer was that the core team would further involve those making significant contributions in Project Red Stripe.

Many of the submissions received related to user-generated content such as wikis, blogs, and social networks.

Wikis were the most popular suggestion topic. The consensus from Project Red Stripe submitters was that the conventional wiki needs to be improved with some form of moderation. While many alternatives suggestions were mentioned in the Project Red Stripe Blog, my personal view was that perhaps the most obvious solution was missed – create a conventional wiki but limit editing to current subscribers to The Economist. While this would not solve all issues, it would certainly cut down on vandalism of content, as few potential vandals would be willing to spend on a subscription to The Economist before doing their worst on a wiki page.

There were also suggestions relating to prediction, information or decision markets.

From the Project Red Stripe Blog:

Prediction markets are are speculative markets set up to make predictions on the outcome of a particular event, for example the US presidential election. People can bet on one candidate by buying a “contract”, essentially a promise of the seller to pay, say, a dollar if the candidate wins and nothing if he or she loses. Those certain of the candidate’s victory should be willing to pay up to a dollar for this contract (they’ll pocket one dollar minus the price they paid). Those confident of a loss should want to sell such a contract, expecting to be able to keep the money they got for it (and not having to pay the one dollar to the buyer). Given enough buyers and sellers, this market should establish a price for the contract – which represents the probability of the candidate’s victory.

Most contributors in this area wished The Economist to launch an online service allowing subscribers to participate and even create such prediction markets. Some added a special twist to the concept, for example a system for “truth claim markets”, which amounts to using markets not to predict future outcomes, but to evaluate current truths. Another proposal was for an index for worldwide memes, ideas, and trends that rates their popularity and value much like a stock index.

Some even suggested that The Economist should create its own private currency, which subscribers could use to make bets on prediction or other markets. One suggestion was that every Economist subscriber receive one thousand Economist dollars per year to trade. This triggered another thought within the Red Stripe Team: Why not let subscribers earn some money (by contributing to a wiki, for instance) and spend it (by donating it to a charity of their choice)? i.e. turning The Economist into a real economy.

Other ideas related to The Economist Group’s own publications and products, such as an expansion of the scope of its Big Mac index (which uses the price of a McDonald’s Big Mac in different countries to calculate the relative buying power of individuals in each country).

Many parcipants stated that The Economist provided for them an aggregation of the most important issues of that week plus analysis and opinion. May contributors suggested expanding The Economist’s service of “trusted advisor and overseer” and applying it to information available online.There was strong support among idea contributors for The Economist to become the “gateway” or “sorter” of a wider body of information beyond that purely generated by itself. While this may be an attractive idea from the reader’s viewpoint, the workload that it would bring would be immense if undertaken by staff. However, an alternative would be for the work to be undertaken by readers, a sort of highbrow Digg, where items are rated, or a type of tagging service such as Del.icio.us. The team also considered using implicit pesonalization, by somehow collecting data on subscribers’ surfing behaviour to compile lists, such as “The Economist’s reader’s favorite websites” and “what other readers of this article have read”, in a simliar style to the likes of StumbleUpon and Last.fm.

Another possibility was to combine Economist data and analysis with Google Earth, allowing the reader to scan the globe and zero in on a location of interest to access the relevant country and regional data. It was also suggested that The Economist partner with Google Earth to provide Economist analysis within the Google Earth environment, and that this economic and political analysis would work well with traditional travel guides about countries and cities.

These various suggestions led the team to consider if

“the traditional role of publisher could move from their managing their own-produced content to managing a ‘standard’… a respected source like The Economist could present for its readers the dominant viewpoints, showcase the various views for debate and even link to wider related event coverage, including multi-lingual reporting.”

Other ideas focused on using the Economist for educational needs, (even providing a version of The Economist for kids). Junior versions of other ‘high brow’ publications of this type exist in various countries. The challenge would be in creating something that young people would want to read rather than something that they would have to read as part of their coursework or that is aimed at their teachers.

One approach to this would be to use a community of teachers to create a curriculum plus teaching materials.

It was noted that the Economist website has been slow to take up the principles of Web 2.0, such as comments, mash-ups and tagging. One contributor felt that “many people discuss Economist articles on other web sites and in other discussion forums and that by not allowing our readers to comment on articles we are losing our community and potential ad dollars.” (The publication, is in fact, involved in blogs called Democracy in America and Free Exchange where it engages readers in discussion.)

Many other suggestions were received dealing with various aspects of how The Economist interacts with its readers and the World at large. Some contributors zoned in specifically on the data held by the Economist Intelligence Unit (EIU). Most of these related to making the data more accessible, in both the the financial and technical sense (for example through an Application Programming Interface (API)).

However, the EIU currently charges for its data, so making it free would damage the Group’s revenue. One possibility would be to liberate some of the data or, more radically, by turning a business with a few subscribers into one with many more monetised customers.In the end, after much deliberation, the one idea which was chosen to be implemented was perhaps the least expected – The Economist would start a social enterprise.

At the end of June 2007, it was decided to start a web service that harnesses the collective intelligence of The Economist Group’s community, enabling them to contribute their skills and knowledge to international and local development organisations. These business minds will help find solutions to the world’s most important development problems.

It would be a global platform that helps to offset the brain drain, by making expertise flow back into the developing world. They called it “Lughenjo”, an Tuvetan word meaning gift.

Non-governmental organisations (NGOs), charities and other organisations – as well as entrepreneurs active in developing countries – would be able to post tasks on Lughenjo asking for help in solving problems. Qualified individuals could then provide such help by donating their knowledge and skills. By connecting these two groups Lughenjo would “create a marketplace for good and a new channel for skills and knowledge transfer”.

It was decided that Lughenjo would be a social business enterprise – a business that does good, and returns a profit. It would be financed by online advertising.

Almost immediately, Lughenjo ran into difficulties. There was much internal debate among the team as to whether it was correct to make money from a website on which people would donate their time to solve development problems. Initially, the Project Red Stripe team wanted Lughenjo to be not-for-profit, with revenues to finance the programme coming from The Economist Group as well as long-term sponsors and grants.However, a business model mainly based on the financial support of others would have limited Lughenjo’s growth and sustainability. Also, not-for-profits do not always raise enough funds, and thus cannot fully achieve their mission. From a purely financial viewpoint, by making its brand and readers available to the site, The Economist Group would be taking a considerable risk, which should be compensated. This would give the Group a strong interest in making Lughenjo a success – which, in turn, would help achieve the site’s mission.

Many variations of the social enterprise model already exist. Perhaps the most famous is the Grameen Bank. However, Lughenjo would push this idea further, by not reinvesting the profit. It was hoped that Lughenjo would reflect a larger trend that would spawn many hybrid organisations that will both do good and make money at the same time.

The Project Red Stripe Team believed that a site to exchange skills and knowledge to solve development problems could make a significant difference. They noted that, while international and local development organisations need money, skills and knowledge are often the true bottleneck. Even if both are available locally, the networks to spread them are often missing. While Lughenjo would not only be a partial substitute for such networks, but would also help build them.

The team was reasonably confident of gaining enough volunteers to give Lughenjo a critical mass. However, it was noted that research on volunteering showed that “the biggest obstacle in online volunteering is the lack of an organisation’s capacity to involve any volunteers effectively.”

So, the real challenge was to find ways of stimulating demand for the service, for example by making it as easy as possible to post “help” requests. Another method used to create demand for the Lughenjo project was to work with major international and local NGOs to get them to serve as a kind of aggregator of such requests. However, the most important aspect of making Lughenjo a success would be to identify a “killer application” for it to gather momentum. In the end, these goals were not achieved.

After a month, it was decided to move on from Lughenjo. While the feedback was very favourable towards the idea, there were, however, two problems. Firstly, it was not obviously something that The Economist Group should do. Secondly, and more importantly, it became clear that there was not an immediate demand for a knowledge network from NGOs and social entrepreneurs.

A posting on the Project Red Stripe blog explained:

“The upshot was that we would have had to force the creation of the network from a demand point of view as well as marketing it to potential donors. This would have put a barrier in the way of us being able to grow the community quickly and therefore monetising it. And the one thing that pretty much all the people in the NGO community that we spoke to said, was that they expected us to run Lughenjo as a profitable business, because that would be our motivation to stick with it.”

Lughenjo had already gone through several iterations before being made public, each time being refined into a simpler proposition. It had its roots in us wanting to make a ‘major difference’ and originally deciding to help achieve one of the UN’s millennium development goals – that of universal primary education by 2015. The original idea was to create a platform for digital donations with a novel map interface. It then became a skills exchange to help achieve universal primary education, before ultimately seeing the light of day as Lughenjo, aimed at helping anyone working on projects involving international development.

It was noted that, with Lughenjo, The Project Red Stripe team had always thought that after philanthropy they would be able to roll out other “verticals” that would be of value to The Economist Group’s high-end audience. However, they hadn’t focused on that wider goal. The feedback received made them re-focus on the need to put the wider goal of a knowledge network at the front of their idea. So they came full circle to a type of social network, a type of Facebook for the Economist Group’s audience (provisionally called HiSpace). It’s focus would most likely be on knowledge generation and sharing rather than contact generation and maintenance – members of HiSpace would not just consume information but they would also be the principal generators of such information. It is expected that HiSpace will surface in some form around November 2007.

One of the principal issues that the Project Red Stripe team has identified as a result of the Lughenjo process is the question as to what extent innovators need to experience a problem before coming up with a solution. The Economist Group was in an unusual situation, in that it is reliant on revenues from a print product which are increasing, whereas the overall print media market is declining. The issue for the team was therefore how to get a high-end audience in the tens of millions to interact online.

Perhaps Lughenjo did not succeed because it was thought of as a solution first and a problem had to be found to fit it. However, the one advantage to this type of ‘wildcat innovation’ is that it is easier to move on to the next idea, because lack of success does not leave an unsolved problem behind.