CrowdSpirit

CrowdSpirit is a company with a Crowdsourcing -based business model.

URL = http://www.Crowdspirit.org

"This French startup plans to use crowds to develop and bring to market tangible, inexpensive, electronic devices such as CD players, joysticks for video games, and Web cams. The community will handle all aspects of the product cycle—its design, features, technical specifications, even post-purchase customer support." (http://www.businessweek.com/innovate/content/jan2007/id20070118_768179.htm)

What is the business model of CrowdSpirit?

From http://www.openbusiness.cc/2007/01/22/crowdspirit-introduction/

"Our strategy is to tap the world-shaping potential of “You” for higher value tasks than just sharing videos! Our business model is simply to design innovative electronic products by “you” for “you” and to reward the best “you” based on the products sales revenues& in practice “you” will be made by a community. CrowdSpirit will provide the means for this community to design, invest, produce, market, distribute and support the products that make business sense. To conclude, the community will assist and participate in every step of the product cycle and will earn money from these products based on each person’s contribution.

For our first tranche of products, we shall scope the product as described here (c.f hyperlink) and are aiming for a street price between €150 / $190. This is to minimize the financial exposure for both the community and CrowdSpirit. This very aggressive market, already with many major corporate players, is the ideal market sector to prove that Crowdsourcing will work for consumer electronics. Of course, based on the results of this first stage, we plan to replicate our business model out to an extended market, in line with the actual products proposed by the community members.

Community members will have the opportunity to have several roles depending on their ideas, their experience, or simply their willingness to participate in this adventure. All those roles will provide the required resources for CrowdSpirit to realize the products. CrowdSpirit is outsourcing some roles to the community and this allows these people to be financially rewarded for their contribution.

Let’s start the review of all the roles:

• The inventors are the people who will send in product ideas. These ideas can vary from the simple concept to the totally patented product ready to be produced and sold. Based on which stage of development the idea is at (as a reminder, it is impossible to patent an idea, only an original technical solution to an existing problem) the inventor will get a revenue proposal from the expected product profits. It is up to the inventor to decide to release any Intellectual Property to the CrowdSpirit community at this stage.

• Next, the contributors will perform several different tasks. Firstly, they check if the idea already exists or not (including patent research). They will also vote on the idea’s potential and they will also help to further define and refine the product specification. The best contributors will be then selected to work closely with our design experts and with our manufacturers in order to design the first prototypes.

• Once the functional specification of the product is frozen, the investors start financing the product design and the development of prototypes. A market study will be performed with both the help of the community and our distributors, using the distributors’ market knowledge to research the likely product revenue. Based on the required development costs, a share of the overall revenue will be allocated to the investors to guarantee a proper Return on Investment, even if there is a potential risk of the product failing to meet expected returns. Those inventors will effectively be venture capitalists on a product by product basis. Please note that a product which has not enough investment will be not produced.

• Once the first prototype is produced, the testers will help to finalize and fine-tune the product to assure market quality. The testers can include the contributors, however it is important to gain feedback from as varied and representative audience as possible, not just technophiles and geeks. Also at this stage, if a product cannot be improved to a standard which will meet the needs of customers, then it will be put on hold.

• Once the community, CrowdSpirit and CrowdSpirit’s partner decide a “GO” for the products, the community will help in making the linkage between retailers around the world and our distributors. These ambassadors of the CrowdSpirit concept will help to increase the retailer installed base. CrowdSpirit will provide all the required materials and training to those ambassadors to ensure the best “evangelization campaign”. Then the retailer just gets in touch with our distributor to be ready to sell the product to everybody and so to YOU.

• We expect, as with any new product, to encounter problems in bringing products to market. As a result, the community will assist users that have problems with their products. These problems could be either software or hardware related. The supporter will ensure a kind of 1st level support to the user and in case of more complex issues; CrowdSpirit will exchange the product if necessary, similar to the warranties of more traditionally developed products.

Finally, when the first product revenues are generated, the agreed benefits will be shared with the best contributors in order to close the loop and reward the supply chain."

More Information

What is this concept of “customer-centric product” or “customer-manufactured ”

Reply at http://www.openbusiness.cc/2007/01/23/discover-a-crowdsourcing-initiative-crowdspirit-part-ii/

How is it possible to Crowdsource electronic products and to produce good quality products for a small company like CrowdSpirit ?

Reply at http://www.openbusiness.cc/2007/01/24/discover-a-crowdsourcing-initiative-crowdspirit-part-iii/