Board of Innovation » experience

Kickstarter.com – community funding of extraordinary projects

Nick — Tue, 09 Feb 2010 23:52:24 +0000

You might be one of those people that walks around with a marvelous idea but never found an incentive (or pile of money) to start your project. But what if you could find a small crowd of people that could back your idea. A crowd that doesn’t only give you the needed support but that will actually co-found your dream. That’s exactly what Kickstarter has to offer. First, submit your idea and set a target goal. (e.g. 10.000 dollar). Next you need to convince people to donate a part of your funding. To do this you make a few promises. For instance: You wish to roll out a scarcely-dressed-ladies-sketch-club and you need 3000 dollar. Those who donate 10 dollar will receive a handwritten postcard. But those that donate 1000 dollar will get life-time access to all sketch events. And so on. Make the experience as personal and exclusive as possible. But be careful. If you don’t offer enough value for money to those who pledge, you might not reach your goal within the 1-90 day time limit. Once reached, Kickstarter will pay out the funding and will take 5% commission. Secondly they will ~~earn on the cash that’s been in their possession for a few months~~*. If the target isn’t reached, the project will be canceled ~~and people will get their money back~~*. Interesting revenue model isn’t it?
Kickstarter democratizes the funding business. Instead of strolling between friends, family and fools you can now reach out to the masses. Secondly the business model of Kickstarter truly embraces the business building blocks ‘experience’ and ‘exposure’. Paying backers with personalized products and services is a remarkable strategy. A third important aspect is the fact that Kickstarter helps their members to fully reach the different segments within a crowd of funders. Many people will pledge a few dollars while only few want to donate a large sum. This optimization of funding is what makes Kickstarter truly unique. Keep an eye on this start-up because they could really boom in 2010.

* update Feb 10: Andy Baio (CTO Kickstarter) points out in the comments that Amazon takes care of the payments. Thereby nobody is charged upfront so Kickstarter won’t earn on the few month of cash as mentioned above. It’s worth noting that some other companies that focus on selling voucher do strongly rely on these upfront payments. The Belgian company Bongo is such an example.

EtenPerMeter.nl sells vegetables (commodities) as an experience

Nick — Thu, 27 Aug 2009 07:49:00 +0000

A Dutch farmer took a different approach for selling his vegetables with his concept EtenPerMeter.nl (Dutch) (English). He tries to sell his commodities (because that is what potatoes are) as an experience. You as a consumer come over the farmer and for one day you may feel what it’s like to dig in the mud, looking for your potatoes and onions. At least that is the positive feeling he tries to sell. Back to nature! You then pay for your vegetables per meter you’ve worked. (€ 0,75/mtr). Since you do all the work, you pay significantly less than in a normal store.
Although the transaction here is rather straight forward, the approach is quite innovative. In a normal situation where commodities are being sold as an experience it is by creating an exceptional good service around it. Think of selling coffee in such a pleasant environment as Starbucks. The creating of such a warm atmosphere with all the branding and so on, is more expensive for a company. To earn back all this efforts, Starbucks asks significantly more for his coffee. And if you do it right you can ask even more what leads to large profits margins. This Dutch farmer did manage to take away a service and sell that as an experience. He enlarged his profit margins, not by first making more costs, but by cutting down on labor expenses. As for now, Etenpermeter seems to be a big success.

Rancho Bernardo Inn, an un-experience in practice

Nick — Wed, 29 Jul 2009 19:59:06 +0000

In a sector where everybody is fighting to offer the most positive experience as possible, the Rancho Bernardo Inn in San Diego tries to compete by offering just the opposite. Instead of luxury retreats, customers can choose the ‘survivor package‘. For only 19 dollar a night one can sleep in a room without a bed. By doing this they offer some type of un-experience where a company just tries to solve a customers problem without extras. Hereby they strip the normal hotel experience down to a basic service. Many companies already showed that there is money to make on bad or negative experiences. Recently we gave 10 other examples of initiatives that are doing just that. Ryanair for instance tries to focus solely on getting you from A to B without the expectation of any positive experience. Often a business model can arise out the inversion of the so called differentiating aspects or USP’s of a competitor. What could you invert of your competition to boost your own business?

My Starbucks Idea, Free Crowdsourcing Of Product Ideas

Philippe — Sat, 11 Jul 2009 10:36:06 +0000

“What would make your Starbucks experience perfect?” On MyStarbucksIdea.com people can post their ideas and see how Starbucks puts those ideas to work. Ideas range from Birthday drinks, a punch card system, locally baked goods to Coffee ice cubes. On top of being a simple Suggestion Box 2.0, the community can vote to select the best ideas. Or as the company puts it: “Together, we will shape the future of Starbucks.”

Corporate crowdsourcing of product and service ideas is not unique, as Dell’s IdeaStorm, Innovate with Kraft and a list of other examples illustrate. While My Starbucks Idea is fully company branded (powered by the Force.com platform of Salesforce), other companies opt for a specific idea challenge on intermediary platforms like Fellowforce.com, Atizo, IdeaConnection, InnovationExchange, or IdeaMagnet. In contrast to challenges on those platforms, My Starbucks Idea does not reward customers for their ideas. Apparently the experience Starbucks offers its customers is strong enough for people to want to contribute by offering free product ideas. Underlining again the importance for companies to create unique experiences, it sparks the question whether it will be sustainable to ask for free advice. Would you be able to gather free contribution and involvement from your customers?

Nexicon, turning fear into cash

Nick — Mon, 29 Jun 2009 21:37:10 +0000

The business concept of Nexicon is quite exceptional. Their monitoring service tracks down IP’s of illegal content distributors on bittorent and other peer-to-peer networks. I suppose that this service towards copyright owners like movie studies and record labels can be bought with a some form of subscription. Once identified Nexicon’s system will automatically send out a settlement agreement to the ISP who has to forward it to his own client. In such a letter Nexicon threats with legal action if this distributor doesn’t choose to settle within 10 days by paying 10 dollar per illegally shared item. Nexicon will take a commission on each transaction. Although 10 dollar is far less then normally asked in settlement agreements it can generate an reasonable profit for Nexicon if they are able to track down these p2p-users in large amounts.

‘Experiences’ as we use it in our business model framework are characterized by the emotional impact on a user. Contrary to other ‘experience’ sellers Nexicons tries to offer such a negative experience (fear) that will convince a user to pay a small amount of money. An example of the opposite would be a pay-what-you-want restaurant that tries to offer such a pleasant experience in order to receive a reasonable payment from each client. In the end this shows that you as company should take control over the experience of your customer, even when this is a negative one.

WantsForSale.com Begs For Broker Platform

Philippe — Sun, 14 Jun 2009 18:02:07 +0000

A trip to Las Vegas for a painting! New York artists Christine Santora and Justin Gignac are painting portraits of all the things they wish to get on WantsForSale.com. Wants For Sale is not new yet interesting to look into further. It is a nice variation on the Intention Economy in which the buyer’s intent shapes the production and delivery of a product or service, as in “I would like to have this” (similar to Igglo, Zillow, Eventful; yet offering a painting instead of money now). Each painting represents things like a new bikini, a month’s rent, gambling money, a customized Adidas shoe, and special experiences on a trip to Las Vegas. People buy the paintings by paying the value of the painted item or by delivering the item or experience itself.

Wants For Sale also follows along the lines of The Million Dollar Homepage and One thousand paintings – selling paintings of all numbers from 1 to 1000. Once featured on BBC, WIRED, boingboing and others, they create enough buzz for companies and individuals to be interested in the exposure and reputation – like iRobot for example. Wants For Sale brings an interesting concept which almost begs to be developed in a broker platform where everyone can post a painting, a song, a performance… for something they want to get! I am sure companies/brands would be interested in their fan’s productions.

Online Auctions: From Products (eBay) to Experiences (Sweemo)

Philippe — Sat, 02 May 2009 14:14:38 +0000

eBay has pioneered the concept of online auctions where people buy and sell goods from and to each other. As discussed in How to build any business model with only 10 blocks, companies can change a business model by moving from products to services or experiences – keeping all other transactions the same. The evolution of online (peer-to-peer) auctions is an excellent example:

Online product auctions: eBay.com

Online product auctions like on eBay.com bring together buyers and sellers, and take a listing fee or commission on successful transactions. This is a straightforward example of the broker business model, which in principle does not change when moving to transacting services or experiences.

Online service auctions: Zilok.com

On Zilok.com people can rent anything from anyone, from a nice heater to party cooking gear. The transaction is not the ownership of a product, it is the service to use it for a period in time. Myngle.com is another example of online service auctions, bringing together teachers and students on a global language marketplace.

Online experience auctions: Sweemo.com

As a next step, Sweemo.com enables people to buy, sell or swap special experiences or “sweet moments” (after which the UK-based start-up is named). In their own words: “Sweemo is the live auction community where people come to trade real-life experiences”. The auctioned experiences range from a role on a soap opera to an exclusive safari, a backstage pass or a look behind the scenes of a reality show. Experience sellers pay a commission on the final selling price.

Brick-and-mortar Stores Counter Webshops With Experience

Philippe — Wed, 15 Apr 2009 17:17:13 +0000

Especially in the current economic climate, brick-and-mortar retailers are losing ground (+2.5% in 2008) compared to webshops (+24% in 2008). Online shops can offer better prices and have the advantage of time convenience on their side. In addition, mobile and payment technologies are maturing, and more and more people get comfortable with e-commerce (both e-tailers like Amazon and online brokers like eBay).

Brick-and-mortar merchants like BCC try to counter by playing the card of Experience. The Dutch electronics retailer has just launched its new store format in Utrecht, Netherlands. The new store is completely built around creating a (trade fair) experience with elements ranging from drying laundry, a central kitchen with live demonstrations, ironing male models, to an interactive Green Wall. Eric Jansen of BCC is proud of the new store: “It should become a pleasant experience again to buy electronics”. On the other hand it is interesting to see that online merchants try to grow into experience as well by creating online shopping environments in which you can browse through books or walk through a 3D environment; or open brick-and-mortar stores as well. Trying to combine the best of both worlds – online and offline, MyGofer lets its customers browse and order products online, and pick them up outside or inside their brick-and-mortar stores.

We will see more of this blend of online and offline in times in which traditional stores need to react on their changing environment. Create unique shopping experiences, integrate with online interfaces, establish try-out stores, adopt free concepts…