Crowd-funding and social media

In class, we've heard about facebook translating its pages to different languages in a super fast manner … and for free by using crowd translation.

Crowd is hot! Its fast and less expensive, making it a lucrative approach for firms wanting to do anything from translation, OCRing, to recently, FUNDING!

Unbound, a british firm seeking to "crowd-fund" books, emerged as a response to the decline in bookselling business. The idea is simple, visitors to the site see portions of unfinished books and pay a small amount (say $15) in return to getting the finished book.

Will social media ride the bandwagon? They clearly have a massive advantage. Tons of users, targeting capability and the ripple effects make social media the best platform to take this idea forward. Anyone from funds to entrepreneurs can benefit from this value proposition as it links the investors directly to investment projects.

Regulation will need to step-in, but I think this will eventually happen. It’s a natural extension.

Article about Unbound:

http://www.economist.com/node/18988946

Crowds & Barter

Kiva's Flamingo Group

So, a lot of different forms of crowdfunding sites have been appearing all over the board recently. Some sites, such as Kiva.org, do microfunding for developing countries, while others such as Kickstarter.com bring crowds together in financing art, film, inventions and all sorts of projects. People interested in supporting a project may receive a certificate, print, tickets, or other related rewards for their cash.

But can this keep going in terms of barter trade? Increasingly, the crowds participating in this venture capital model may want both to monetize these issuances and investors will demand their invested equity come back in cash flows rather than signed photographs.

But this is a cloud far from SEC regulation. What kind of legal framework would be needed to ensure that these trade systems are both efficient sources of funding and profitable and (risk-adjusted) safe investments? New equity and debt issuance instruments may need be developed.

And, what does this mean for new start-ups? Well, that at the same time that any kind of job can be outsourced, funding options for projects are opening up from all over.

Crowdsourcing for Social Good

I recently came across a really interesting use of crowdsourcing by way of an iPhone app. Through "The Extraordinaires" app you can perform tasks that have been parsed into small elements for not-for-profits. These small individual efforts then accumulate to produce a larger result.

An example of the work that is being done on The Extraordinaires is shown at left where iPhone users can help scan pictures of individuals that are missing in Haiti. You can check out this and other similar apps on mashable and read up on other uses that The Extraordinaires are finding for crowdsourcing on their blog.

“Crowdsourced feedback” (like it or not)

Tropicana is changing their package back to its previous incarnation after six short weeks. The strength of digital media and social networks may have fanned these winds of change.

Those of who know me well have heard my "gentle rants" about the Tropicana Orange Juice repackaging launched earlier this year. Why the vertical logo placement (I have never had a single piece of research support vertical logo placement, as efficient as it can be for big branding of primary panels)? Why on EARTH would you walk away from the strong visual equity of the straw-in-orange conveying freshness? Why a generic sans serif font... are you trying to make it look like a TESCO or Sainsbury's package ? They changed the cap to a half-orange which, while cute, smacks of premium packaging on a consumable which is a no-no in this conservationist age. And completely, utterly, unshoppable as all differentiation was buried no doubt for the sake of art.

I wasn't the only one thinking this way, the blogosphere agreed. This article in the NYT from earlier this week acknowledged the massive backlash Pepsico encountered acknowledged massive direct feedback via phone and email, but I have seen numerous blogs with innumerable comments all addressing the topic which I imagine carried equal sway as I imagine they no doubt helped create the 'push' needed to get consumers more vocal.

Kudos to Pepsi for listening to the consumer (doing so prior to launch would have been way cheaper) and moving swiftly to backtrack. And if anyone would like a little schadenfreude (Thank you John Gapper for that one) tune here to see Peter Arnett waxing poetic about all the psychological mumbo-jumbo reasons why this packaging is a winner at its launch. Next time you hear marketers speak like this about ANYthing, short the stock.