The Board Of Innovation » charity

Reputation auction: Pay to work

Nick — Thu, 27 May 2010 10:14:28 +0000

What is a good reputation worth to you? In a professional context, a lot seems like a good answer. CharityBuzz illustrates the power of a good reputation selling platform. In return for some valuable company names on a CV, people participate in auctions for jobs. They pay to work. Companies that have a few spots available for interns, can put their positions on the Charity buzz auction platform. And with success! It seems that interns pay thousands of dollars. The winner will work for ‘free’ in return for a kick-start of his or her career. The companies that participate don’t receive the money themselves. The collected money will be donated to charity.
Charity for buzz is not the first platform that sells reputation, but it is remarkable due to the high prices that get payed for it. In the end this action is not different from buying virtual gold with real dollars to get a better equipped avatar in an online game. It’s all about earning respect from your peers. Although the context (gaming vs professional) differs, the transactions stays the same. More and more variations on this concept arise. Therefore we can conclude that the business of reputation and respect selling will probably flourish in the coming years. Something to keep an eye on!

Special note to our Dutch and Belgian friends:
We are running an innovation battle at BelgieVsNederland.be and NederlandVsBelgie.nl. Get your inspiring reward with just 6 questions to answer.

Thanks! @nickdemey & @philderidder

Yes, We Are Fans Of Kiva’s Business Model!

Philippe — Fri, 21 May 2010 06:52:14 +0000

As many other entrepreneurs these days, we feel that sustainable development is an integral part of being an entrepreneur. Our aim in this is to support simple but effective initiatives; in the mindset that many small intiatives can make a big impact. In that perspective, Board Of Innovation started to support women entrepreneurs in Asia and Oceania through Kiva loans – Sina Pele from Samoa, and Jocelyn Melanio from the Philippines. We wish them all the best with their plans, and invite all our readers and fellow-entrepreneurs to support entrepreneurs through Kiva as well. Also, special thanks to our business partner Christian De Neef of Fast Track to remind us about Kiva recently. When using the system, I was again surprised about the strenght of Kiva’s business model, and couldn’t resist to visualize it. The 1st flow of transactions shows how loans are given to entrepreneurs, through Kiva’s Field Partners. The Field Partners are in-country based microfinance institutions that approve and disburse loans, and then upload the loan and entrepreneur’s profile on Kiva’s platform.

Lenders like you and me can browse those entrepreneurs’ profiles and choose someone to lend to, using credit cards or PayPal. Unlike other broker platforms, Kiva doesn’t charge a fixed commission on transactions (100% of the loan goes to the entrepreneurs). Kiva lenders choose an additional percentage that want to give to fund Kiva’s costs. The 2nd flow of transactions shows how entrepreneurs repay their loans, and what options lenders have when they get repaid.

The total value of loans made through Kiva amounts to $134,575,785 now. Also interesting to note is that PayPal provides Kiva with free payment processing. Kiva’s is actually the first account at PayPal with a free payment processing agreement. Have you used Kiva or similar funding systems before?

Pay-what-you-want for gaming & charity

Nick — Mon, 10 May 2010 13:59:58 +0000

In the growing series of pay-what-you-want concepts we can now add the Wolfire Indie gaming bundle. Gamers come to their webshop and decide for themselves what the bundle of 6 indie games is worth to them. Not only do they decide how much they are willing to pay, they also decide where their money goes to. By using simple sliders they divide their payment between three parties: Electronic Frontier Foundation, the actual game developers, and the Child’s Play charity organization. It’s by the creation of such a personal connection between buyer and seller that the perceived value of products can be increased. And it works, at least in this case.
Being transparent is another way to add value. Wolfire’s revenue communication for instance is very open. Looking at their figures we can learn that an average user today is willing to pay $8,41. Linux users pay remarkably more ($13,96) than their Windows counterparts ($7,21). A Linux user probably feels a closer connection with software developers, resulting in higher payments. Wolfire even communicates the total revenue ($621.112). I personally bought the bundle a few days ago and looking at the pace of their revenue growth since then, it seems that it can’t take long before they will breach the 1 million dollar barrier. This is again another good example that people can make money without a traditional, fixed pricing strategy.

Freeset, an eco and people-friendly business model

Nick — Sat, 26 Dec 2009 13:50:58 +0000

The busy holiday period is a good time to highlight one of the many charity based business models. The revenue model that is being used by these organizations is often not that complex. Many of them simply ask for a donation while others will give a commodity in return. A pencil, a plant, a newspaper and so on. But asking thousands of families for donations is labor intensive so when you’re trying to do something valuable, a B2B charity business model might be a better option. Freeset is such a company. They realize they are not in the product business, but in the reputation business. So when you’re selling the value ‘doing good’ the focus of your branding will not be the functionality of the product. Freeset sells Jute bags so they won’t last forever. But even this lack of quality is being used as positive feature. Using Jute makes Freeset bags biodegradable so that makes them (more) eco-friendly. Not only the product is focused on ‘doing good’. The business model of Freeset is build on top of a revenue model where the profits are being used to fight sex trafficking. Thereby the fair-trade business of Freeset is being perceived as People-friendly as well. So when clients are buying these event bags, they are ‘doing good’ and receive a platform (the bags) to show this to the world. Events itself are generally build to give companies opportunities to get exposure. And sadly it is exposure what you need when you are selling charity to businesses. Doing good, without anybody noticing, is economically not interesting.

Large companies that are trying to be eco-friendly, people-friendly and thereby claiming to do good are having a hard time online. When done right a profitable revenue model can be the result. Freeset is therefor a good example. But brands that are using charity or good causes as a marketing gimmick will be publicly crucified. See how even Apple is trying to coop with bad publicity on their green efforts. They make attractive products but being green is currently not their focus. Consumers have more power than ever. This forces companies like Apple to be more transparent on their efforts. But when you’re active in the ‘charity business’ you better do this over the top like Freeset. Eco-friendly, Fair-trade, People-friendly and so on. Do it and show it to your clients.

A Free Disney experience in exchange for volunteer work

Nick — Sat, 10 Oct 2009 12:07:37 +0000

Many free business models are based upon advertising while others are based on direct exchange of services. You do something for me and in return I’ll do something for you. Everybody happy! This new approach by Disney combines both methods. In order to get free publicity they are encouraging people to do volunteer work with the Handson Network. When someone gives a few hours of his precious time to such a good cause, Disney will give that volunteer a free visit at on of its theme parks. Visitors of Disney Land or Walt Disney World will admit that this is truly a unique experience. The return Disney receives is off course a better reputation and that without the need to spend big advertising budgets.While more and more charity based business concepts do pop-up, we see that only few of them use it in this fundamental new way. Most of the time a company only promises to donate a part of the profit to charity. By doing this they hope to convince people to buy more goods. All the ‘RED’ products use this method: Charity as a sticker. But in this Disney case there is no direct money involved and that is not a problem at all! Disney is a marketing company, one that sells brand reputation. So anything that can strengthen their reputation will be directly linked to higher profits elsewhere. If you’re a simple product seller you can’t rely directly on such a concept since you don’t have other revenue streams. Maybe in that case a ‘Buy one, give one’-concept will be a more sustainable way of using ‘charity’.

Charity upgrading in Telecom… Ello Mobile, TOMMY Telecom, Call4Care

Philippe — Fri, 17 Jul 2009 08:26:52 +0000

Ello Mobile gives 100% of its profits to charity. A “profit for non-profit” business model. The Belgian mobile operator is purely web-based and aims to attract 1% of the Belgian market by 2014, thereby gathering minimum 6.2M euro per annum for charity. Projects are selected by an independant jury, and support initiatives in Sumatra’s rainforest and Mobile schools in South-America. Similar, the Dutch Call4Care donates 10% of your phone costs to charity. TOMMY Telecom used to reward customers for sponsoring causes, but it is unclear if this is still the case after integrating with Nederland Mobiel. Ello Mobile and Call4Care’s “profit for non-profit” model offers people a convenient opportunity to support a good cause without any complexity or price premium attached to it; charity without a hassle or price tag.

Charity Upgrading – upgrading your product or service by systematic donation to charity – is applied outside the telecom sector as well, for example in gambling and waste handling. Bet2Give is a real-money prediction market where participants invest in predictions about the future, and give their winnings away to non-profit organizations of their choice. College Hunks Hauling Junk donates a portion of its revenue to College Bound, a non-profit scholarship program. Do you know other examples? Can you upgrade your product or service by supporting charity? Or can you link your good cause to a “no hassle” product or service offer?