Poptent Hits $1 Million in Video Ad Payouts

by Mark Walsh, Monday, December 20, 2010, 7:00 AM

The buzz around harnessing user-generated video to boost brands may have peaked a few years ago, but startup Poptent has managed to find a profitable niche as a platform for crowdsourcing video ads.

Started in 2007, the company matches its social network of 20,000 independent videographers and filmmakers with assignments for mostly online video (but also TV) spots from major brands including Anheuser-Busch, Nokia and American Express. Think LinkedIn for freelance video producers complete with member profiles, work samples and a discussion board.

Each assignment is in effect a contest where brands select two or three commercials from the roughly 35 to 100 submissions each project attracts. Advertisers typically pay $7,500 per winning ad, although that figure is lately starting to climb to $10,000 as marketers compete to draw the most talented videographers, according to Poptent President Neil Perry, a former senior marketing executive at McDonald's Corporation and Monster.com.

The Philadephia-based company today announced crossing the $1 million mark in cash payments for contributors' completed assignments, with $10,000 awarded to New York City-based video maker Sean Cunningham for one of four winning ads for GE's user-generated "Tag Your Green" effort as part of its ecomagination campaign. Poptent.net usually has eight to 10 active assignments posted at any time.

A current project from Frito-Lay, for example, asks members to create videos inspired by its tagline, "We Make it Natural. You Make it Fun." "Since our traditional media will focus on the 'We Make it Natural' piece, we would like for the focus of this Poptent ad to lean more heavily on the 'You Make it Fun' portion of this tagline knowing that natural is another reason to believe that mom can have fun," reads the creative brief.

Frito-Lay is paying $10,000 apiece for three ads, and possibly more based on the quality of submissions. Poptent gets about 25% to 30% repeat business from advertisers, according to Perry, with Anheuser-Busch and Procter & Gamble each sending seven campaigns to the site so far. FedEx ended up buying nine ads this year at $5,000 after starting with just three for its "Think FedEx First" campaign aimed at small businesses.

The spots are clever, quirky and professional-looking, if not the product of lavish production values (although one circus-themed spot does feature a live elephant).

Unlike its video contributors, Poptent itself doesn't work on spec. It gets paid $25,000 up front for each assignment to help manage the process and screen submissions for any inappropriate or copyright-infringing material. Even with the video freelancer's fee added in, the cost is still considerably less than paying six figures or more for creation of a tradtional 30-second spot.

But Poptent isn't always leaving agencies out of the loop -- about 20% of its work comes from agencies rather than directly from brands. Chicago-based marketing firm Robinson Maites, for example, which works with FedEx, handled the ad buys via Poptent for the shipping giant. And Poptent worked with OMD on campaign strategy related to the GE "Tag Your Green" assignment. Boutique creative shops may also be among those submitting prospective ads.

Poptent's steady growth and profitability haven't been lost on investors. In October, the company received $3 million in first-round funding from MK Capital. That financing will help the company expand its 25-persoff staff, including sales and marketing employees, as well as grow beyond the U.S. market through its network of video makers in 80 countries.

Poptent is not alone in pursuing the "crowdsourced creativity" model, however, with other startups such as GeniusRocket and Tongal also vying for talented contributors and brand and investor dollars. GeniusRocket, for instance, touts a "curated crowsourcing" approach in which any member that produces for content for a project gets compensated whether the client buys their work or not.

Perhaps most crucial for Poptent's success so far is that advertiser expectations haven't been set too high. If a video spot goes viral, that's gravy -- but it's not something brands are counting on due to the fickle nature of the Web video audience, according to Perry. As many brands have found to their dismay, manufacturing a viral video hit is a dicey proposition no matter how big the production budget.
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Facebook for farmers and Wokai which means I start

Meanwhile, in two other Chinese counties, a social networking site is linking donors as far afield as London and California with farmers who seek micro-finance to develop small rural businesses.

Enter the web platform, Wokai, which means "I start".

It has profiles of borrowers from Sichuan and Inner Mongolia, and profiles of contributors from 47 countries who select online which projects they want to support. In many ways, it is a Facebook for farmers.

"You have the second largest micro-credit demand in the world and almost no supply of micro-credit," says Casey Wilson, CEO and co-founder of Wokai.

"And the reason for that is that the practitioners that are doing micro-finance on the ground don't have access to capital. And so given that context, the internet is one of the only ways that you can mobilise a global community to reverse that cycle and to get micro-finance in China on the map."

In two years, Wokai has raised over $370,000 and financed 500 projects - from small pig farms to roadside noodle stands.

Registered micro-finance partners administer the loans locally - and earn from the interest. Wokai doesn't take a penny from the money pledged, relying instead on donations and sponsorship to cover its running costs.

Crowdfunding: Business startups use tactic as alternative to investors

By: Marino Eccher, INFORUM

For three years, Minneapolis-based comic publisher Raighne Hogan paid to produce his company’s annual anthology of comics by local artists – the Good Minnesotan – out of his own pocket. That was getting pricey. So when it came time this year to put out the Good Minnesotan 4, Hogan tried a different tactic: passing around a digital collection plate to seek support from the public.

What is crowdfunding?
Crowdfunding is the latest trend for artists, startups and small businesses: raising money from the public via online pledge drives, a few dollars at a time. A handful of regional projects have used the tactic to jump-start their efforts, and one Fargo company is banking on it to launch a brewery.

For three years, Minneapolis-based comic publisher Raighne Hogan paid to produce his company’s annual anthology of comics by local artists – the Good Minnesotan – out of his own pocket.

That was getting pricey. So when it came time this year to put out the Good Minnesotan 4, Hogan tried a different tactic: passing around a digital collection plate to seek support from the public. It’s a tactic known as crowdfunding, and it has taken root among a handful of regional business projects in recent years.

Those range from small artistic ventures like Hogan’s, which sought and raised $1,000 over the summer from online backers, to ambitious business ideas like the Fargo Brewing Company, which will seek $55,000 in early 2011 to start what would be the state’s only homegrown brewery. They dangle perks, swag and goodwill to coax contributions out of friends, family and strangers in amounts ranging from $1 to $10,000-plus.

Crowdfunded projects are powered by websites that feature a wide range of projects for public consideration. Hogan used New York-based Kickstarter, which features a handful of other Minnesota projects, while the Fargo Brewing Company is using Los Angeles-based ProFounder.

The specifics vary from site to site, but the basic model stays the same: Users post a project with a funding goal and a time limit, typically a month, and solicit pledges from backers with a short pitch. Many Kickstarter projects also include videos. If the goal is met on time, the pledges are locked in and the site takes a few percentage points of the money raised as a fee. If not, no money changes hands.

To call such sites investment vehicles would be a misnomer: Backers don’t own a piece of the projects they support or turn a profit (indeed, any such arrangements would entangle the sites in considerable regulatory oversight). Support a successful ProFounder project, and you’ll do no better than break even; support a Kickstarter project, and you won’t get your money back at all.

To bring in backers without the prospect of financial gain, crowdfunding projects usually turn to creative incentives. A $500 Kickstarter donation to a Minnesota Fringe Festival play might get you dinner with the actors. A $100 investment in the Fargo Brewing Company will get you a company T-shirt; $1,000 will get you on the guest list of exclusive company events, including tastings.

Dana Mauriello, president and co-founder of ProFounder, said getting that kind of reward for investing in a company “is almost like being a member of a cool club.”

In ProFounder’s case, there’s also a philanthropic incentive to give. Backers are repaid with a percentage of the company’s revenue over a set number of years. Once they recoup their investment, any revenue that would have gone toward repaying them goes instead to a nonprofit of the company’s choosing for the duration of the agreement.

“You believe in the person, you believe in the business, you believe in the business mission, you just want to see this business exist in the world,” Mauriello said.

But getting a crowdfunded project to catch on amid a sea of other offerings isn’t easy. ProFounder, which launched in December, has dozens of projects, while Kickstarter has hundreds. Hogan said standing out on Kickstarter meant working aggressively to start his project. He started a blog and “bothered friends and family” throughout the process.

“A lot of it was just trying to create some noise on the Web,” he said.

It doesn’t always work. Rip Smith, a West Virginia-based photographer, tried to raise $3,500 via Kickstarter this summer for a photography project to document abandoned places in rural North Dakota. He secured just $432 in pledges.

Smith said he thinks his fundraising goal was too ambitious. He also said he never seemed to garner much momentum on Kickstarter – he was never highlighted on the home page or chosen as the featured project of the week.

“If I had to guess, success in that medium requires either someone who already has a large constituency to whom to appeal, or the project needs to capture people’s imagination in some way,” he said. Smith said he did the North Dakota project anyway, and might try crowdfunding again for future projects.

Jared Hardy, one of the partners in the Fargo Brewing Company, said the importance of building an engaged audience is one of the reasons the company decided to launch next year rather than this month. He said the brewery wanted to make sure it was on the radar before starting the clock on its lofty fundraising goal.

“We wanted to give them a little more notice ahead of time,” he said. The company is also seeking about $150,000 through a private round of investing – another area in which ProFounder will help start-ups navigate regulatory challenges.

The brewery is dangling a unique prize for high-rolling backers: Give $10,000 or more, and they’ll create a themed seasonal brew in your honor. But the real payoff, he says, is getting a beer company up and running.

“You actually get to help start it and be a part of that,” he said. “We think that’s pretty cool.”

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Crowdsourced Philanthropy: How Do We Measure The Impact of the Crowd?

Beth KanterAuthor and blogger
Posted: December 17, 2010 02:44 PM

I read George Weiner's excellent post about some of the pitfalls with crowdsourced philanthropy. I agree with him on many points, but I think there are different models and designs out there beyond the Vote for Me crowdsourcing approaches he describes.

Over the past two years, as part of my work as Visiting Scholar for nonprofits and social media at the David and Lucile Packard Foundation, I have had the opportunity to participate in (NNF), a community of practice for funders who are intentionally investing in and working through networks. The focus has been to develop practice and share insights on networked effectiveness. I've had the pleasure working with Diana Scearce, from Monitor Institute, who has been facilitating and weaving this network.

There are several learning cohort groups, including one on better understanding network impact. Recently, I presented a high level overview of crowdsourcing, including examples from the lens of funding and doing. It was good opportunity for me to look back at the crowdsourcing chapter in our book,
The Networked Nonprofit, and update the examples and thinking. The presentation was followed by a discussion about how one might evaluate efforts to engage crowds.

Crowdsourcing is defined broadly as the process of organizing many people to participate in a joint project, often in small ways. The results are greater than an individual or organization could accomplish alone. There are four different models of crowdsourcing, There's isn't one best way to do it -- and many organizations use a combination of these models to meet their objectives.


(1) Creating Collective Knowledge or Wisdom

A group of individuals has more knowledge for solving a problem than any single individual. Collective intelligence creates a quilt of knowledge that many people can distribute.

Public Insight Network in Minnesota is a network of 75,000 people who help make Minnesota Public Radio News by sharing their observations, insights, and experiences with reporters and editors who may share these insights through a story or on the website. The measures of impact for this project include diversity, deeper and more relevant reporting, and better connection with listeners.

Maine Health Access Foundation did an experiment on Facebook, including it in its channel to promote a funding opportunity but also posted the initial letters of inquiry on their Facebook page to get feedback. The measure of impact is to determine whether the comments and feedback strengthened or improved the final proposal.

Crowdsourcing for knowledge creation can include "mashups of data."
Ushahidi is an open source platform that facilitates crowdsourcing through the use of SMS/cellphones and online mapping. It has been used in disaster relief, for example, in Pakistan, and other scenarios from London Tube strike to election monitoring to mapping crime incidents Atlanta.

(2) Crowd Creation

Crowds create original works of knowledge or art.
The Royal Opera used Twitter to crowdsource a new opera. They encouraged Twitter users to send suggestions for the plot. The opera staff collected the suggestions and summarized them on their blog. Opera is not the only art form, there's been crowdsourced choreography And, a symphony orchestra, made headlines when they crowdsourced musician auditions for the Youtube Symphony orchestra.

How do you measure the impact of the crowd here? Does being engaged in the creation of the work spur more appreciation for the art form and hopefully attention and participation? Does crowdsourced creativity reach a different (younger) and new audience segment? While it is probably difficult to absolutely prove cause and effect, implementing a crowd artistic creation requires a discussion about letting go of control or at least being explicit about how creative contributions will be accepted or curated or added to the work. Do you accept everything or is there curation?

(3) Crowd Voting

The crowd votes, rates, or gives feedback and tips on ideas, products, places, and even people. Internet platforms make it is easy for crowds to vote, rate, and provide feedback. Think Yelp, eBay, or Amazon.

Crowd voting and choosing based on popular vote has been used in Cause Marketing. There has been an explosion of "Vote for Me" contests that have become contests in techniques for vote getting and inspired cause fatigue at worst. At their best, they spread the awareness of a commercial brand and provide an opportunity for small nonprofits that don't typically receive large amounts of funding to win dollars.

Crowd sourced philanthropy, on the other hand, does not typically select the best idea or project to fund by popular vote. Many foundations have taken a hybrid approach, acknowledging a role and place for expertise in addressing a "wicked problem" or spurring innovation. Hybrids include a mix of openness and curated decision-making by experts.

How to structure crowd sourced philanthropy based on voting or feedback depends on the outcomes of the project, a theory of change. The Knight Foundation's News Challenge, Case Foundation's Make It Your Own awards, and Island Collaboration Fund are examples of the hybrid process and linked to a clear theory of change. Key in the implementation is being clear and transparent about how funding decisions will be awarded. An impact question is -- "How innovative are the ideas as a result of using a crowdsourcing process?"

Voting, rating, and feedback crowdsourcing projects have applications beyond philanthropy and marketing. It can help organizations make a traditionally closed process more transparent and ultimately improve the level of feedback. Conferences have taken this approach to shaping their agenda. NTEN used a hybrid crowdsourcing approach to solicit panel proposals for its NTC 2011, similar in design and approach to the method SXSW has used. Looking at impact is a question of how the crowdsourcing broadened the diversity panelists and topics as well as how this approach increase awareness and registrations for the conference. And, reaping that value also depends on using an efficient way to crowdsource the decision.

Brooklyn Museum implemented a crowdsourced photography exhibit experiment called " Click! A Crowd-Curated Exhibition." Using a hybrid approach, there was an open call for photographs that attracted 389 entries. The entries were ranked by 3,444 people, including both general public, museum goers, and expert curators. You can compare the ratings by level of expertise. One of the surprises, was that the average amount of time that people looked at the online images was 22 seconds -- compared to in-person in exhibit studies that found 6 seconds. Measuring impact is how did the crowdsourcing process attract a more diverse selection of art works, but also how it might have encouraged more people to appreciate the works.

Next Step Design is an experiment in "Crowdsourcing Public Participation in Transit Planning." Traditionally, government agencies ask for public input on planning projects by holding open meetings and workshops. The purpose of this project was to get this public input in a different way: online. Did the use of crowdsourcing enable them to get more and more in-depth feedback compared to the traditional method? Was it more efficient?

(4) Crowd Funding

This category taps the collective purse, encouraging groups to fund an effort that benefits many people. The idea is to leverage the funds of the crowd to complete a project they support. For the funders side, we looked at the America's Giving Challenge from the Case Foundation. Impact measures not only looking at the total amount raised, but also the adoption of new online social fundraising tools which was a key objective.

There are a variety of platforms for crowd funding, including Causes, Crowdrise,
Razoo, GiveZooks and
others.

A big takeaway for me was that you have to very clear and intentional about what you want the crowd to do and your design has to facilitate the crowd's work as efficiently as possible. A lot has to do with the technology platforms and how well it automates some of the crowdsourcing work flow. If you're crowdsourcing funding decisions, you have to be very clear and intentional about funding decisions are made and ensure that your design is really leveraging your intended your outcomes.

What you think?


Follow Beth Kanter on Twitter: www.twitter.com/kanter


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Join the crowd to give your business a helping hand

Written by Michell Rodger

Publisher: Scotland on Sunday - The Scotsman Date: 12 December 2010

"Small gifts from many are just as powerful as large gifts from a few."

It has never been tougher to start a new business or grow an existing one. There might be ideas aplenty, but there certainly isn't money aplenty. No matter what anyone says, securing a working capital loan from a bank or an equity investment stake from an angel is incredibly tough.
But there is an alternative. Have you considered raising the money you need from non-profit foundations set-up to provide financial support to business start-ups, disaster relief, cultural events and suchlike?

So-called "crowd funding" has grown out of crowd sourcing. According to Wikipedia - possibly one of the best examples of both - it is the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the internet, to support efforts initiated by other people or organisations.

It looks like a financial model spawned and supported by online communities, but in fact crowd funding is not new. The Statue of Liberty was funded by donors, inventor Thomas Edison benefited from patronage to develop some of his more "outlandish" ideas, and Barcelona Football Club is owned by its members.

It is also a game-changing model that allows the most innovative businesses to steal a march on their rivals.

When Naked Wines was launched two years ago, founder Rowan Gormley knew the business would only survive if it could deliver better wines for less money than its competitors. Crowd funding enabled him to do that.

The company now has 100,000-plus customers who between them invest £1 million every month. The crowd-sourced capital has helped 22 winemakers set up in business and export to the UK for the first time (they previously didn't have the funds to do so) and helped them produce 85 exclusive new wines, which have won 37 international wine medals and gongs.

Crowd funding is the key to survival for independent winemakers. According to Gormley, the traditional route to market is killing independents because the costs you can't taste make original wines too expensive for normal consumers. The solution? Get thousands of people together to buy the wine before it is made.

The end result is a "virtuous circle", where winemakers get to do what they love and make a living. And wine drinkers get authentic wines for less than they cost at the cellar door.

One couple to benefit from the Naked Wine Angels' crowd-sourced fund is husband and wife Felipe and Constanza Garcia of Bravado Wines in Chile.

The pair raised the funds to go it alone when more than 1,000 Naked Angels pre-ordered 18,000 bottles of their first solo vintage in one afternoon. The entrepreneurial duo went on to win the Best Sauvignon Blanc trophy at this year's Wines of Chile Awards.

Serial entrepreneur Amanda Boyle is launching the first Scottish crowd funding venture, Bloom VC, in the new year. She got the idea from the music and film industries, where crowd funding has an established record of pulling together support from a variety of sources to bring a project to completion.

Boyle sees crowd-sourced capital as a paradigm shift for business start-ups. It's not classed as an investment, simply lots of people supporting lots of other people. The challenge, as she sees it, is in developing the system to introduce the business ideas, collect the donations and connect them in a safe and secure way.
"Everyone wins," says Boyle. "More new businesses mean more jobs and better quality of life. It sounds like a crusade, but it actually makes a lot of economic and business sense."

Scotland has a history of making things happen regardless of the hurdles and, when people feel that they are part of something, it's amazing what they achieve, says Boyle. Look around any town and you'll find examples of where local people have chipped in to finance a building, memorial, or event.

"Think about the neighbour's daughter making handbags, or the man at the end of the road who was made redundant and then started a delivery service. We all want to support the people around us when it contributes to the community around us," says Boyle.

In the words of Steve Case of AOL: "Small gifts from many are just as powerful as large gifts from a few."

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Will TikTok+LunaTik Multi-Touch Watch Kits - a Kickstarter Project reach a $1,000,000 in pledges?

by James de Rin

If ever there was a project to reach a million dollars in crowdfunded pledges TikTok+LunaTik Multi-Touch Watch Kits is the project to do it. With only a $15,000 goal the funding pledges have rolled in to the tune of $880,529 as of today. There are eleven hours to go. That's quite an endorsement of Kickstarter and this project. Not so long ago a $5,000 funding requirement was seen as ambitious, now a select few projects are achieving venture capital levels of crowdfunding. Congratulations to Kickstarter for their vision but it is the projects that are the true stars and this one was created by a real professional as you can see from the pitch video.

TikTok and LunaTik simply transform the iPod Nano into the world's coolest multi-touch watches. The idea to use the Nano as a watch was an obvious one ever since the product was announced. But we wanted to create a collection that was well designed, engineered and manufactured from premium materials and that complemented the impeccable quality of Apple products. Not just clipped on a cheap strap as an afterthought. We wanted to create a product that your friends and strangers would stop you and ask "WTF is that??? And where can I get one?!"

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Can You Spare a Quarter? Crowdfunding Sites Turn Fans into Patrons of the Arts

Published: December 14, 2010 in Knowledge@Australian School of Business

Susan Lee looks intently at the camera and launches into her story. She left an emotionally abusive marriage of 16 years to find herself in a mid-life crisis that is not at all like the exciting adventures detailed in Elizabeth Gilbert's memoir Eat Pray Love: There is no journey to an ashram and she didn't fall into a romantic relationship. Instead, Lee's life in her 40s is a harsh yet touching journey of self-discovery and acceptance. She is chronicling her experiences in a play she wrote called "Diary of a Mid-Life Crisis," and asking people who see her video on the IndieGoGo website to support her production. The play is about going through a real, not fantasy, mid-life crisis and eventually emerging "a little smarter and a little wiser, but hopefully whole in our own incredibly beautiful way," she says. Lee's plea worked. Six people gave her a total of $581, exceeding her $500 goal, with 10 days left for the fundraiser.

Welcome to the world of crowdfunding -- a style of fundraising that taps support from fans and other interested parties. While politicians and charities have used this method for ages, the adoption of social networking makes crowdfunding feasible even for the average citizen with a dream and some creative talent. The Internet age has made distribution easy; these days, anyone can upload a video to YouTube or otherwise post their work online. But getting paid for that work is another matter. Crowdfunding is one solution to the problem and several websites have sprung up in response to the trend, such as IndieGoGo, Spot.Us, Pledge Music, ArtistShare, Kickstarter and others. These sites have democratized support for creative endeavors that had been dominated by large companies -- record labels and movie studios, for example -- by letting fans finance the work of artists directly.

This is how it works: An individual or group requests funding for a specific project at one of the crowdfunding websites. Supporters can donate varying amounts -- often starting with as little as $1 -- to the project within a specified amount of time, usually a few months. Some sites wait until the goal amount has been reached and only charge supporters if the project is successful, while others take the contributions from donors even if the campaign doesn't hit its stated goal. The crowdfunding sites earn money by taking a percentage of the funds raised, ranging from 4% at IndieGoGo to as much as 30% at ArtistShare. Kickstarter reportedly collects 5% of the total and has reaped an estimated $2 million in revenue this year, according to Business Insider. Artists usually interact with their supporters in hopes of strengthening their fan base.

"The idea is to get your fans to support your work," says Kendall Whitehouse, Wharton's director of new media. "In some ways, it's back to the future; it's history repeating itself. This was how most art was funded in the 17th and 18th centuries. A wealthy patron would pay to have music composed, for example." The difference now, of course, is that instead of receiving the entire sum from one wealthy individual, the artist gets a little bit of money from a lot of (often non-wealthy) contributors. In return, donors get something in kind, such as a signed CD, a T-shirt, or -- for a larger donation -- credit as a producer on a film or the thrill of having a song composed especially for them. Such deals are easier to do in the digital age. Adds Whitehouse: "It's the web's ability to communicate to a large fan base and then aggregate a significant number of small donations" that makes this work well online.

A Decade in the Making

Crowdfunding sites in the U.S., at least for music, go back a decade with the creation of ArtistShare. Founder and CEO Brian Camelio remembers being surrounded by skeptics when he started his website in 2001. "Napster was a big issue at that point with file-sharing," he notes. "I was starting to worry about the future of music -- how music is paid for and how artists are compensated." A musician himself, Camelio thought the best solution to fight the "destructive technology" of music file-sharing would be to give fans a more engaged relationship with the artist -- in hopes they would be willing to finance the music. He bet fans would pay to watch their favorite musician work or get a chance to be online inside the studio during a recording session. People scoffed, he says. "The reaction was mostly dismissive." But he had the last laugh: ArtistShare musicians have won four Grammys and snagged 11 nominations.

In recent years, several other crowdfunding sites of a more general nature have popped up on the web. Slava Rubin co-founded IndieGoGo in 2008 with Danae Ringelmann and Eric Schell after discovering there was no efficient way to raise money for bone marrow cancer research, which had killed Rubin's father. In two years, San Francisco-based IndieGoGo has launched 12,500 campaigns -- including films, charities, businesses and recordings -- and funded millions of dollars of projects in 139 countries. "Everybody in the world is passionate about something," Rubin points out. "We make it easier [for them] to raise money."

Libbie Schrader, an alternative pop rock musician in New York, has raised $8,000 to finance her fifth album through Pledge Music. Including another $2,000 she will pitch in herself, the sum is enough to bankroll five songs and will be used to find a producer, rent a recording studio, hire backing musicians, and pay for other production costs. She tapped her 2,500 fans for support -- people who saw her perform at colleges or as opening acts for other groups. Schrader turned to crowdfunding because it's difficult to sign with a label even though she had a demo deal with Atlantic Records at one point. "It's the most impossible thing to do on the entire planet," Schrader says. "It's crazy."

Paul King shelled out about $1,000 to support Schrader so she could keep recording even without a label. "I was worried she wasn't going to reach her goal" and that she would abandon her album, notes the Nashville, Tenn., computer technician. "I'm very selfish. I want my music. There are very few artists I like and she's one of them." For his support, Schrader will compose a song just for King and his wife based on their life together. "This is where the Internet is taking us, to where a fan will say, 'I will give you money to write a song about me and my wife'," Schrader says. "Some people want to Skype into the recording session or watch while the producer talks to the guitarist.... It's becoming more and more mainstream."

Such artist-fan bonds are key to the success of crowdfunding sites. "Personal relationships are very powerful," notes Jonah Berger, a marketing professor at Wharton. "Seeing someone on stage and knowing you had something to do with it is exciting." There is also a certain caché to spotting the next big act before the masses, and crowdfunding lets people do that, Berger points out, adding that proletarian funding of projects and causes can be applied to many things, even building projects. Internet trends that harness the power of the collective, whether it's Wikipedia or crowdfunding, are here to stay, he adds, but whether all the current sites will last is another matter.

Mainstream Hits or Niche Players?

The challenge for crowdfunding sites is to make sure fans come back to support an artist's subsequent projects. Camelio says he has learned what works when it comes to nurturing the musician-fan relationship. For example, he encouraged Maria Schneider, a jazz musician with ArtistShare who had been nominated for a Grammy, to invite a top supporter to the award ceremonies. She ended up winning, and the fan got the memory of a lifetime. IndieGoGo's Rubin, on the other hand, uses technology to boost giving. He found out, for instance, that posting the average contribution of a campaign prompts people to give more than that amount.

David Cohn, founder and CEO of Spot.Us, is taking a different approach to keeping his nonprofit viable in the long run. The site, which funds journalists to allow them to pursue news stories missed by the mainstream media, is signing up sponsors like Hewlett-Packard in addition to receiving foundation grants. Spot.Us also is planning to embed its fundraising technology in media websites so that local newspapers, TV and radio stations can ask consumers to support certain articles. "We really are a technology platform and not a news organization," Cohn notes. "In that respect, we scale really well."

Yet Peter Fader, Wharton marketing professor and co-director of the Wharton Interactive Media Initiative, does not see crowdfunding sites becoming much more than niche players. "They have been around a long time under different guises," he points out. While it's alluring to think that the masses will be able to spot the next Justin Bieber, the truth is that professionals have a leg up in identifying the next big star and, as such, they will never be completely replaced. "They are very, very good at identifying talent, much better than the crowd," Fader says. "If you put two musicians next to each other, they both seem fine, but one of them will do well. It's much easier for a professional music person to make that judgment than a bunch of random people."

Big recording labels and major studios also know how to groom, refine and market the performer to appeal to a large audience. It's that sheen of sophistication that artists on a small budget can't replicate. "Who would have ever identified Lady Gaga [as the next big music star]?" Fader asks. "Studios knew if she dressed a certain way and sang certain songs, people will respond. She's an extreme artist." After all, many artists flock to crowdfunded sites because they are not visible enough to be noticed by the big players. The most popular videos on YouTube are those of famous groups, not homemade movies, Fader adds. "For every YouTube sensation, there are 100,000 who aren't," he says.

But once in a while, a crowdfunded project breaks through. Emily Hagins, an 18-year-old film director, raised nearly $6,000 in three days at a comic book convention after airing a trailer of her movie, "My Sucky Teen Romance." Hagins will use that money, raised through IndieGoGo in November, for post-production of her film. During the summer, she raised $9,250 in a month to make the movie, which is about vampires crashing a science fiction convention. The romance comes in when one of the bloodsuckers falls for a human. "It's really silly," the Austin, Tex., high school senior says about the movie. Still, the response has been so positive that "we're hoping to send it out to the [film] festivals, the biggest ones. We just want to aim high."
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Earn $10,000 if you can find prior art in NTP's patent worth US$612.5 million in 2006

Crowdsourcing Group Targets NTP Mobile E-mail Patents

By Grant Gross, IDG News

A company using crowdsourcing methods to challenge patents has targeted three mobile e-mail patents held by NTP, a Virginia company that has filed more than a dozen infringement lawsuits in the past four years.

Article One Partners has offered rewards to patent researchers who find so-called prior art for three patents held by NTP, a patent holding company best known for winning a US$612.5 million patent settlement in 2006 from Research in Motion (RIM). Since 2006, NTP has filed patent infringement lawsuits, all related to mobile e-mail, against 13 other vendors, including Motorola, Verizon Wireless and AT&T.

NTP filed patent lawsuits against six of those companies, including Google, Apple and Microsoft, in July. NTP has filed lawsuits based on eight mobile e-mail patents.

Article One gives money to researchers who find legitimate prior art for the patents the company targets. In this case, researchers can earn $10,000 or more if they find evidence that the mobile e-mail technologies existed before the original patent holders applied for the patents.

"Prior art is evidence of publicly available information predating a patent's invention, which teaches, or renders obvious, the patent claims," Article One said in a press release. "Prior art knowledge and evidence may come from published content anywhere in the world and in any language. Prior art is often found in documents tucked away in a file cabinet years ago, or in the back corner of a library."

Cheryl Milone, CEO and founder of Article One, declined to name the sponsor of the studies challenging the NTP patents, saying the company kept the sponsor names confidential. Article One has more than 100 corporate clients, she said.

"In many cases, multiple sponsors are involved," she said. "And for studies related to active litigation, clients are often prohibited from making public statements."

In the three patents being challenged, all related to electronic mail systems by radio frequency communications, researchers must find prior art before May 19, 1991.

NTP has no comment on the Article One studies, a lawyer for the company said. RIM also declined to comment.

Since Article One launched two years ago, it has awarded about $780,000 to patent researchers who have found prior art, Milone said.
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Amazon.com Invests $175 Million in LivingSocial Site

Dec. 2 (Bloomberg) --By Joseph Galante

Amazon.com Inc. invested $175 million in LivingSocial.com, a daily coupon website, to benefit from surging demand for online discounts on products and services.

Venture capital firm Lightspeed Venture Partners invested $8 million in the site, which will use the funds to expand globally, Washington-based LivingSocial said today in a statement.
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Amazon.com Is Said to Be Near LivingSocial Investment

By Joseph Galante - Dec 2, 2010 2:44 PM PT Bloomberg

Amazon.com Inc. plans to make an investment in LivingSocial.com, a website that offers daily coupons to users, a person familiar with the matter said.

The investment may be announced as soon as today, said the person, who requested anonymity because the discussions are private.

Chief Executive Jeff Bezos is using part of Amazon’s $5.89 billion in cash to capitalize on the surging demand for online services that provide steep discounts on everything from hotel stays to spa visits. Google offered to buy Groupon.com, the biggest daily deal site, for $6 billion, two people familiar with the matter said Nov. 30. The approach has heightened interest in rivals such as LivingSocial.

“We see a tie-up between Amazon and LivingSocial as a smart strategic and financial move,” Marianne Wolk, an analyst at Susquehanna Financial Group in New York, said today in a note to clients.

LivingSocial, a startup based in Washington, is likely to generate sales of more than $500 million next year, Chief Executive Officer Tim O’Shaughnessy said in an interview last month. Groupon, also privately held, may reach that milestone this year, two people familiar with the matter have said.

Daily-deal sites offer discounts -- typically 50 percent -- from businesses such as restaurants and nail salons, then keep a portion of the sales. The promotions activate once enough people sign up for them. The barriers to start such a site are few; just about anyone with an e-mail list and a deal can do it.

They’re trying to get a piece of the local advertising market, which is set to reach $133 billion this year and is moving online and away from print, radio and direct mail, according to consulting firm BIA/Kelsey in Chantilly, Virginia.

Amazon, based in Seattle, slipped 2 cents to $176.53 at 4 p.m. New York time in Nasdaq Stock Market trading.

To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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Crowdsourced Computer Game Transforms Players Into Genetic Scientists

You've got the brain power to become a genetic scientist? Even if you don't have a degree in the sciences, Phylo, a computer game, hopes to crowdsource the power of idle brains from people like you and me to solve genetic problems. The way the game is played is that players move colored tiles--each tile represents one of four nucleotides of DNA--to find the best alignment from two different species.

These particular sections of DNA, called promoter regions, determine which parts of the genome end up as traits in the organism, whether it be blue eyes or heart disease. Seeing where the genes line up across species can help biologists pinpoint the sources of genetic disorders.
"If some region is conserved across all species after alignment, it probably was conserved for some very specific reason," Waldispuhl said. "We should be able to provide better understanding of the reason for which mutation potentially will create a disease, or why this disease appears." Scientists say that human brains are better adapted at solving puzzles and at pattern recognition than computers. The game can be played by anyone in their free time--not just people in science and geeks.
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Find Customers and Fund Your Startup — Before You Even Have a Product

By Shonali Burke | November 16, 2010

Typically, most startups begin like this: They have a business idea, they raise the money to build their product or service, and then they launch a marketing strategy to gain visibility and awareness.

Web company Eat Your Serial isn’t operating like most startups. In fact, it’s doing all of the above backwards, or more accurately, all at once.

Aimed at digital-savvy writers and readers, Eat Your Serial, when launched, will feature serialized stories online from up-and-coming writers, putting a 21st-century twist on the long-standing story-telling tradition.

The company will post chapters weekly, with multiple stories running every week. Readers will be able to engage writers in comment sections and through social media. While content will be offered for free online, says founder Shawn Abraham, when the serials reach completion, readers will be encouraged to purchase the completed work in printed or e-book form. The company plans to make most of its revenue through paid mobile subscriptions that will allow readers to access the content on their phones, and through bundling subscriptions as extras on mobile devices. ”We keep hearing that people don’t read anymore, and that’s not true,” says Abraham. “What’s changed is that people are reading more online, and on their mobile devices. It’s just the ‘what’ and ‘how’ that have changed.”

Before his product had even moved past the conceptual stage, Abraham decided to crowdfund it via Kickstarter to get his company off the ground. His goal was to get enough supporters to kick in small amounts of money, which would collectively reach $7,000 or more; if he couldn’t attract that amount in committed funds, he would be back to square one. (Update: He made it.)

But it wasn’t just about raising money for the project — after all, it wasn’t much money. The Kickstarter experiment let Abraham simultaneously start growing his community as well as build his target market.

What is interesting about Abraham’s approach to outreach is that it is all online and through social platforms. In addition, it adheres to several PR best practices, but in quite a unique way.

Consider adopting (and adapting, if necessary) these backwards public relations tactics for your own outreach:

1. Build your presence first on the social platforms that matter to you.

Since the EYS team already knows its target audience uses Twitter and Facebook actively, that’s where they have been focusing their efforts on building fans. “Since Eat Your Serial, once launched, will be Web-based, we decided to build our community by reaching directly to the kind of people who’ll use the service,” says Jenn Pedde, the company’s “brand & marketing nutritionist.” And they’re using video as well, as you can see.
What they’re doing smartly here is that they are really “talking” to their community by saying “thank you” to those who have funded them. Pedde says Twitter and Facebook will continue to be forums for interaction with readers, writers, fans, and supporters.

2. Listen and participate in the relevant conversations.

In the old days, we called this “media monitoring,” i.e. keeping tabs on relevant media outlets for reporters and stories relevant to our clients and organizations, and then pitching them.

It’s the same principle, but now it’s called “listening,” and I wrote about listening vs. shouting in social media recently. The EYS team has been doing this in a very smart way; on Twitter they picked up on the #nanowrimo hashtag (short for National Novel Writing Month) and have been engaging with folks they identify as potential users there. In short, they’re not pitching all and sundry; they’re focusing their efforts on the narrow audience niche that is most likely to spread the Eat Your Serial story.

3. Create a 21st century press kit.

If you don’t have a media kit on your website, create one. Make sure it has your FAQ (this is part of laying a good PR foundation), and anything else that will tell both the media as well as your target audience what they will want to know about you.

The EYS team took this one step further. They uploaded an electronic press kit onto SlideShare and direct people there to get official info on Eat Your Serial.

Why is this smart? Because in one fell swoop, the company makes its information accessible via a downloadable press kit on what is currently one of the world’s largest document and presentation-sharing social platforms. While the company did not track true conversions from Slideshare to funding, it says it saw a spike in backers after the media kit went up, and received anecdotal feedback on how helpful the kit was to outsiders understanding the project.

With no monetary investment in outreach, except for Web design fees, Eat Your Serial has bypassed conventional wisdom with creativity and through social media to do what public relations has always been meant to do: build relationships that will benefit its business.

Eat Your Serial logo © Eat Your Serial, used with permission

Shonali Burke is Principal of Shonali Burke Consulting where she helps turn businesses’ communication conundrums into community cool. She opines on PR and social media at Waxing UnLyrical and is considered one of 25 women that rock social media.

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SEC Regulations Barricade The Crowdfunding Floodgates

Kevin Lawton Entrepreneur & Author, The Crowdfunding Revolution
Posted: November 30, 2010 11:21 AM

Joseph Pulitzer used a form of crowdfunding to finance the Statue of Liberty. Obama used crowdfunding to bankroll his presidential campaign in 2008.

Crowdfunding is such a pervasive concept that today more than 175 crowdfunding sites exist online. Seemingly, a new crowdfunding site pops up every other day. So it may be surprising to learn that none of them allow entrepreneurs to raise money in exchange for equity in their business. That's because regulatory organizations like the SEC ban it.

SEC regulations that date back to the 1930's usurped entrepreneurs' ability to pitch their business ideas to the general public with the aim of securing funding. Ostensibly, this was done to protect unsophisticated investors from fraudsters, but in any case effectively handed the role of financing new companies over to the wealthy. These days, the regulations don't make sense given the Internet's ability to add transparency to the opaque venture capital model.

In the same way that social networking changed how we allocate time, crowdfunding will change how we allocate capital. Crowdfunding, generally speaking, is the merger of group funding and social networking. While group funding dates back millennia, the social networking aspects of crowdfunding are quite new, and are a major driving force behind this revolutionary form of financing.

Building on social networking, crowdfunding creates a vehicle for people to invest or pledge money to projects for which they have an interest, a passion and an attachment. In doing so, it creates a marketplace opportunity for a diversity of players. Whether financing an indie movie, a fashion line, an around-the-world sailing adventure, or the next Lance Armstrong, crowdfunding is being applied everywhere.

Still, the human race hasn't even come close to integrating the collective wisdom of our multi-billion person crowd with ways to allocate capital. 2 billion people already use the Internet, and that number is increasing rapidly. Until recently, capital allocation was largely the province of a small and entrenched minority. But with the explosive growth of connectivity and technological complexity, the classical models of capital allocation are folding and becoming dysfunctional. What are the weaknesses of old methods, especially the sheer scale of information and ideas, are the strengths of a new model of funding which has the potential to tap an almost unfathomable collective intelligence. Therein lies the immense future of the crowdfunding revolution.

Ironically, while nearly every other market sector has incurred disruption by new technologies, venture finance, which funds many of these new technologies, has innovated little itself. That shows in the downward-trending performance of venture capital, now negative across the industry.

In many ways, the financing of new ventures has shared ailments that we've seen in the banking industry: centralization and intermediation. The solution to these issues is decentralization and disintermediation -- exactly what crowdfunding offers. Whereas classic financing places a premium focus on relatively few financiers, crowdfunding derives its value from the ability to coalesce the collective IQ of many.

But that's not to say crowdfunding is a replacement for classic financing. It's actually something much bigger, and something new. In fact, nimble players, hailing from classic business financing, will use it as a signaling mechanism to access hot new deals they would have never seen. As exciting is the fact that the value of a person's social networks is undergoing an enormous upside transformation. That's because, as David Geertz of the SoKap crowdfunding platform says, "Influencers drive crowdfunding campaigns. These curators of cool ideas are poised to become the new power brokers." With crowdfunding, zero network equates to zero funding, so it follows that those with networking influence enjoy a new form of value.

Efforts are afoot in other countries to enable the massive potential of crowdfunding, recognizing that small businesses are the job-creation engine of the economy. In fact, crowdfunding looks to be one of the most important socio-economic forces of our time. The question is: Which nations will be held back by their unwillingness to change regulations?
I discuss a much deeper and broader look at the crowdfunding phenomena in my book, The
Crowdfunding Revolution, and will continue with a series of related posts on The Huffington Post
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Crowdsource Is Not Open Source

by Simon Phipps Computerworlduk.com

Open source is not the same as crowdsourcing because open source community members are stakeholders whereas crowdsourcers get less than sharecroppers.

I've heard a few conversations in the last week treating open source interchangeably with crowdsourcing. Despite sounding the same they are very different, and the key difference is the ownership of the outcome.

Open source describes a pragmatic projection of the four software freedoms - to use, study, modify and distribute software for any purpose. As I have explained before, people who find value from the software synchronise the fragment of their activities which relates to the software in question in a community of others with related fragmentary needs (but without a necessarily related motivation behind it). The community is of equal peers, with no one participant necessarily benefiting more than any other. True open source communities are "open-by-rule" - they have a governance that ensures no single community member can exploit the others.

Crowdsourcing describes the leveraging of the marginal interest and free time of a large group of people to complete a task that otherwise could not be economically completed. The result typically benefits the initiator hugely, without significantly compensating the participants. It's one of the examples of crowd behaviour James Surowiecki cites in his very interesting book The Wisdom of Crowds.
The new US web phenomenon Kickstarter is a modern example of crowdsourcing. It allows entrepreneurs to pitch their wild idea on the web site, and then offer token rewards in return for donating money to pay for bootstrapping - or in some cases fully executing - the business in question. The web site's denizens pledge relatively small amounts of money and in return get token items - in some cases samples of the product to be created, in others just mementos - in the event that the project is fully funded. Importantly, they get no stake in the business that's created. They are not "investors" - they are instead crowdsourced donors, not even benefitting as much as sharecroppers.

This is not to say I think crowdsourcing in general is a bad thing. I am for example rooting for Mike Salmon to get fully funded today for his proposal to create an animated version of Neil Gaiman's "The Price", and have pledged a small amount towards it because I'd like to see it exist. But it's not the same thing as open source, where a community comes together for their collective mutual benefit and remain co-equal stakeholders.

As Henrik Ingo explains more colourfully, there are some businesses that don't understand this, and exploit community for their sole benefit in the name of open source. But you may by now have figured I don't have a high opinion of that approach!

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Taken from the book Accelerated Disruption by Eric Lefkofsky who invested $1,000,000 in crowdsourcing's Groupon (formally the point)

Accelerated Disruption by Eric Lefkofsky who invested $1,000,000 in the point which became Groupon.com which is about to be sold for $6 billion to Google and which was developed by Andrew Mason out of an altruistic idea called the point

“Disruptive businesses are born every day. Someone has a great idea that offers a better choice in terms of price, convenience, service or functionality, and for a moment, they hold the keys to the remaking of an entire industry.
Yet many of these businesses let advantage slip through their hands over time because they fail to realize that the fast pace of technology allows a challenge to come from anywhere - large competitors or startups -- and overtake them in an instant.
This is Accelerated Disruption. It is business development moving at the speed of the next technological advancement. Businesses that can understand and control the forces of technology will thrive in the coming years. Those that cannot will find themselves displaced.
Accelerated Disruption deals with the following critical startup concepts and more:

* Choosing the right industries to innovate

* Understanding the concept of pain in an industry and turning it to competitive advantage

* Using the strength of conventional wisdom to investigate a disruptive idea and test it under the radar

* Getting the best out of your people through smart automation

* Turning your customer base into a sophisticated R&D team

* Mastering the art of quick-release product improvements

* Promoting your idea in the face of industry and investor resistance

* Developing a capital strategy that supports your business during critical stages of development."

Author Eric Lefkofsky, a Chicago entrepreneur who helped found five technology startups worth more than a billion dollars, explains how

amazon - Accelerated Disrpution

Book review by Harry Gorden

If you aspire be an entrepreneur, or transform your company, this book is for you. If you feel passion alone will succeed or are risk averse, save your money, though all proceeds go to Chicago's Children's Hospital.

Accelerated Disruption is a blueprint on creating a business that delivers unique value and carves profits from large, deeply fragmented markets. The author presents 18 key Laws, how to manage and implement them, steeped with his experiences of successful start ups, as well as ventures gone awry. The opening chapter sets the tone with the Law of Accelerated Disruption, a map on how to disrupt a market by leveraging spend savings, transparent technology and a hybrid of automation and human processes that deliver value customers crave.

AD presents why you must anticipate customer needs, rather than react to customer pain with current processes/providers. Driven by sophisticated mining of customer data, the creation of customized technology solutions delivers value for optimal decision making, eliminating the pain of previous processes. Illustrating lessons learned from start-ups Innerworkings, Echo and MediaBank, AD shows how to discover client pain by asking naive questions. Innovators are a dedicated breed, embracing intentional ignorance to ferret out where pain resides, then create technology applications to address solutions that industry insiders usually miss.

The author's experience is buyers feel no pain while bosses have significant pain. Buyers make their world easier to manage by limiting suppliers, value loyalty over results and predictability over risk for buying criteria. Embracing changing market landscapes, an appreciation of limited asset provider options, leveraging spend are benchmarks senior leadership must seek. In other words if your company has been buying the same way for years, there is great opportunity to outsource this function to companies who utilize technology that leverage buying power, and customized technology for measurable value.

Large corporations are often paralyzed by the weight of their own infrastructure, hierarchies, politics, lack of respect for clients/employees, resisting change or have stopped listening for honest feedback. Of the many success stories illustrated, the newest venture, ThePoint (rewriting the webs high content but lack of discipline into a new space for activism) is very different than previous ventures and yet incorporates the same open mindset, guts, and passion that could dwarf the author's +$1 billion dollars in profit equity generated to date.

AD details why soliciting candid feedback, internally as well as externally, will honor logic in your organization. Learning from criticism rather than discouraging will engage the intellectual capital needed to continuously improve. The pathway for the right information must be build by management with a culture that is sensitive to the business environment. Arrogance, a key indicator of being out of touch with employees, markets and your future must be watched for. The author takes a hard line on the end result of a business venture must make the market better than it was before, fueling customer addiction to your service, with true technology innovations. Indifference leads to commoditized markets whereas engaged passions deliver value for a lifetime of customer equity.

The author believes in developing technology rapidly, sacrificing perfection for speed...a new innovation paradigm. Insightful warnings abound like "If you are not disrupting you are being disrupted." He shows what organized chaos looks like, maintaining key business drivers and appreciates that leadership taking learning into action rapidly is the ultimate competitive advantage.

The case for embracing risk, going hand in hand with innovation, is made to overcome fear. Entrenched businesses embrace conventional wisdom and therefore are risk averse. The author appreciates that humans are great rationalizers, often lacking the courage to face personal weaknesses, fragile egos, criticism, fearing wrong answers, instead of embracing the quest for the right questions.

Though entrepreneurialism a very broad concept, the author presents in a very tight message, simplified with graphic representations, easy to read, understand and act upon.
"Accelerated Disruption" delivers more than any current best seller in the business category. Unlike others, this book demonstrates what you must do to be a success in your own business.
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Google May Acquire Groupon for $6 Billion, and It Would Be Worth Every Penny

Forget the rumor that Google acquired Groupon for $2.5 billion; the search giant is about to close a deal for the group-buying service for a whopping $5.3 to $6 billion, according to multiple reports.

It would be worth every overpriced penny.

The deal is worth $5.3 billion with an additional $700 million earnout based on performance, according to All Things D. The New York Times reports that a deal could be completed as soon as this week. With a price tag almost double that of DoubleClick, Google’sbiggest acquisition to date, there are still plenty of ways for this deal to fall apart.

Earlier this year, Yahoo tried to snag the group-buying company, but failed. Google, with its $30+ billion cash reserve, reportedly then offered Groupon $3 billion to $4 billion. However, it was rebuffed, so the tech giant upped its offer.

Groupon pioneered the group-buying model through its deal-of-the-day business model. Launched in November 2008, the company has grown from an offshoot of ThePoint to a multi-billion dollar empire with thousands of employees worldwide. In April 2010, Groupon raised $135 million from Digital Sky Technologies, setting its value at over $1 billion.

If the Google deal does go through at a $6 billion valuation, that would mean that Groupon’s value has grown by more than $625 million per month or over $20.8 million per day. That skyrocketing value is simply mindboggling.

Acquiring Groupon: Overpriced or a Genius Move?

There are many reasons to think that Google would be overpaying to get its hands on Groupon. Any company whose value rises by $20 million per day risks a flameout at the level of Pets.com. $6 billion is a stretch almost any way you slice it.

Still, Groupon has an asset that Google covets so highly that it’s willing to pay billions: local advertisers. Through its massive sales team, Groupon has built an impressive array of relationships with thousands of restaurants, spas and local businesses in hundreds of metropolitan areas. It’s a market that Foursquare, Facebook and Yelp all target, but none of them has figured out the formula like Groupon.

The group-buying website’s value isn’t in its technology — the flood of Groupon clones proves that — but in its unparalleled distribution. No other company in the world has the attention of local businesses that Groupon commands. And no other company has the expertise to turn that attention into a steady and consistent firehose of cash.

It’s that attention and expertise Google wants. This is about taking Google’s ad platform to the next level. It also doesn’t hurt that Groupon is set to exceed $500 million in revenue this year. It’s a multi-billion dollar business in the making.

If Google goes through with the biggest purchase in the company’s history, it will have the upper hand in local business advertising. That advantage could be so great that the courts stop this acquisition from ever happening. That’s why Google wants Groupon so badly that it’s willing to overpay by billions; if all goes according to plan, the search giant will be flooded with so much local advertising revenue that it will be able to buy a dozen Groupons
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Talk of Google Buying Groupon for a Cool $2.5 Billion

Author: Stevie Ray Gilbert
Published: November 29, 2010 at 2:54 pm

Cyber Monday, and apparently Google has its sites on Groupon. As yet unconfirmed, the word is Google will purchase Groupon, the two-year-old worldwide local deals website that already boasts 20 million subscribers and estimated monthly revenues in excess $50 million. The figure for the price tag has settled at around $2.5 billion for the time being, making it a sweet deal for Google, seeing as how earlier this year Groupon was reported to raise funds, enough to make the company worth a nice, round $3 billion.

Business gurus labeled Groupon’s success “unprecedented” early on. Labels aside, any company that has only been around for two years is still “early on.”

VatorNews credits an unnamed insider from one of the companies, but Google isn’t talking and neither is Groupon. Vator insists, however, their source is reliable and says the story is consistent with “the recent string of Groupon acquisition rumors.”

“The rumors may have some merit,” said Vator’s Faith Merino in a November 19 article where she pointed to a recent Groupon tweet: "Hang in there, everyone: big things are afoot at Groupon.com today and we apologize for the site being so slow. We're on it. Updates soon..."

In that same article Merino quotes Groupon’s Julie Mossler, “Any rumors are way more interesting than us saying 'no comment.”

A Google takeover of Groupon would have interesting implications for Groupon’s partnerships with Yahoo and Ebay, two relationships that were preceded with glorious fanfare and rumor as dazzling as today’s.

Groupon and eBay seems like a natural fit. The two entities joining forces meant eBay shoppers could get the same kind of local deals using Groupon’s geo-targeting technology without being one of the 20 million Groupon subscribers. Talk about incentive; if you bought Groupon merchandise via eBay, you would receive five-percent of the purchase price back if you subscribed to the eBay Bucks Rewards Program.

This is the kind of acquisition that keeps the Google Campus stimulated. One can almost sense the collective rolling up of sleeves and rubbing together of palms while the nerds figure out how to integrate Groupon’s non-stop cyber machine, a globally aware consciousness that keeps track of all the best deals (in 29 countries) all over the world right down to your neighborhood.
Read more: http://technorati.com/business/article/talk-of-google-buying-groupon-for/#ixzz16lm5rz49

Read more: http://technorati.com/business/article/talk-of-google-buying-groupon-for/#ixzz16llz3dwD
Read more: http://technorati.com/business/article/talk-of-google-buying-groupon-for/#ixzz16llt5moX
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Evly.com first look: Will this new crowdsourcing social network work?

By Martin Carstens

Sometimes it just so happens that a new technology service really speaks to you. The first time I saw Groupon, I thought that it was one of the most compelling services seen in quite some time. Clearly I was not the only one. Google is rumoured to have made an offer to acquire Groupon for US$3-billion. My first look at Evly however did not elicit quite the same initial reaction.The crowdsourcing social network had a soft launch this month. Its founder, Eran Eyal, of Springleap fame, touted their efforts as cutting-edge and having the potential to revolutionise the internet. Based on mathematical models for businesses with viral loops, he ambitiously described a scenario that could see Evly amass “over 36-million users in its first 18 months”. If this came true, it would easily make it the fastest growing website on the African continent. Some have rightly pointed out that Eyal and his business partner Eric Edelstein have had local success over the last three years via their T-Shirt crowdsourcing startup, Springleap. Based on the popular Threadless, Springleap’s local focus sees the company using 3 500 artists who form a part of a community of about 25 000 subscribers. That’s great, but its a rather long way off from 36-million users. It may not be wise to take the success of Springleap to predict Evly’s fate. There is no doubt that Eyal and Edelstein are savvy entrepreneurs, but can taking the Springleap crowdsourcing model and handing the keys to the public really produce similar success stories? With Evly, the idea is to give anyone the ability to create initiatives based on crowdsourcing. I wouldn’t be surprised if someone attempted to create another version of Springleap using Evly, but success depends largely on the people driving the initiatives and not necessarily the tools they use to build them.
Hands-on with Evly’s site building tool Evly’s site-building tool is at the heart of the service, allowing businesses and individuals to source input from the members that become part of their social network. Very simply put, you can think of the tool as a Ning social network, with a Q&A element added to it. You start by choosing from a list of pre-defined themes. Next is the most critical part: You are presented with a list of templates. Depending on the template you choose, your Evly social network will have a certain design to facilitate the particular crowdsourcing input you are looking for. The templates currently available are “Ideas”, “Answers”, “Solutions”, “Designs”, “Advice”, and “People”, with “Money” shortly to follow.
If none of these templates are useful, you are also free to create your own using the “Custom” option — for example, if you’d like to source friends for a party you’re having.
Each of the templates have more fine-grained setup options. If you choose the “People” template you can select to source people for business, projects or research. If you choose the “Designs” template, you can select to source designs for business, projects or products.
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The 10 Most Successful Crowd-Funded Projects From Kickstarter

Posted by Jay Yarow

New York startup Kickstarter is one of the most interesting startups out there.
It provides a platform for people to raise money for projects. If people hit the target they set, then Kickstarter gets 5% of the money raised.

Over $20 million has been raised through Kickstarter so far. We estimate Kickstarter will generate approximately $2 million in revenue this year alone.

What makes for a good Kickstarter project? We've skimmed through Kickstarter's many projects and picked out 10 biggest successes and tried to figure out what works.

The number one thing we see: Make sure you're actually giving something to people. Especially a physical object. The number two thing: Make sure you're targeting a passionate crowd at the right time.


1. "Save Blue Like Jazz" raised more money than any other project

"Save Blue Like Jazz" raised $345,992 to save a movie project that was going to be canceled. The book "Blue like Jazz," was turned into a film, but ran out of funding before it could hit the big screen. Supporters started a Kickstarter project to get it going and created what they call, "the largest crowd-sourced creative project ever."
What was the key? It appears the key here was that it was a project with millions of fans already built in.
Incentives? The minimal donation landed you some goodies like posters, and script pages. The director of the movie is calling people to personally thank them for donating.
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Help Make the Rap Guide to Evolution DVD More Awesome Posted by David Bruggeman on November 22, 2010

Baba Brinkman just announced a crowdfunding challenge for the upcoming DVD for his Rap Guide to Evolution. The videos for the songs are being filmed – a grant from the Wellcome Trust is enough to support basic production costs. But to be an effective educational (and entertainment) tool, the videos could use more in the way of animations, multimedia, and other material.

Given the groundswell of support for Brinkman and his science-themed projects, he is appealing for folks to essentially pre-purchase the DVD. But it’s a bit more involved than that. His crowdfunding challenge is to raise 10 thousand pounds in 60 days (by January 21). Donors can contribute at different levels, and will get the following depending on their donation:
As of this posting, Brinkman’s challenge has already gathered nearly fifteen hundred pounds (it’ll go over that amount once my investment clears), with an average donation just south of thirty pounds. Since both the Rap Guide to Evolution and the Rap Guide to Human Nature are available for free, a healthy donation to this project seems a reasonable course of action to support a talented fellow seeking to support science.

To donate you’ll have to register with Crowdfunder, and for those outside the U.K., Paypal can handle the currency differences. There will be a small Paypal fee. Should Brinkman not make the goal, all money will be refunded. Since the videos are shot and edited with the Wellcome Trust grant, all that will be lost is what will boost the videos from cool to awesome.

About Baba Brinkman
Baba Brinkman is a former tree-planter who worked in the Rocky Mountains of Canada every summer for more than ten years, personally planting over one million trees. He is also a scholar with a Masters in Medieval and Renaissance English Literature. His thesis drew parallels between the worlds of hip-hop music and literary poetry. After graduating in 2003, Baba began his career as a rap troubadour.

Since 2004 Baba has toured his award-winning hip-hop theatre shows, “The Rap Canterbury Tales”, “The Rap Guide to Evolution” and “The Rebel Cell” (with MC Dizraeli) to dozens of cities around the world. “The Rap Guide to Evolution” won the Scotsman Fringe First Award in Edinburgh 2009, and is set to transfer to New York in the Spring of 2011. Baba is also the founder and president of the independent music label, Lit Fuse Records. When he is not on tour, he resides in his hometown of Vancouver.

More information about Baba can be found at www.babasword.com
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Crowdfunding: Charles Armstrong from Trampoline Systems on the practicalities of crowdfunding.

Reprinted from http://www.nicksmith.co.uk/blog/2010/02/01/crowdfunding/


On Friday I went to Minibar, the first to present was Charles Armstrong from Trampoline Systems on the practicalities of crowdfunding. These are my notes, they may not make complete sense, although they are reworked somewhat from what I took at the time. My advice: there may be inaccuracies and typos here, so if it’s important check, as always be especially careful with legal info. Enjoy :)

Crowdfunding works in a variety of ways but is difficult to set up legally. A research project for the Open Society Institute couldn’t come up with a way for it to work.

Charles describes himself as a ‘corrupted social scientist’. His talk was designed to cover how to finance ventures. There are four conventional ways: venture capital, angel investors, family loans and loan finance.

Loan finance is under used. There’s a fixation on venture capital (VC) in the tech world. VC is problematic. Venture capitalists insist on preference stock, different from ordinary stock. They usually want extra rights and extra protections, they’re taking a risk yes, but anyone else investing in your business do to, for example friends and family. Why should venture capitalist’s be different?

Venture capitalists will lure you with high valuations for your business. But they completely screw with your corporate governance and articles. For Trampoline their articles became 12 times longer once venture capitalists became involved. You also suddenly have to hire lawyers, of course there are bills associated. Venture capitalists also use stealth control.

There are all kinds of agendas that are connected with VC fund life-cycles. You’re tied into the life-cycle of the VC fund. He’s not saying venture capitalists are bad, but there’s not enough discussion of their drawbacks. The recession and what’s happened over the last couple of years has had affects that some people think means VC funding won’t exist in the same format in five years time. They’re investing in fewer and larger deals. They’re focussing on seed and post-breakeven businesses. This leaves a large swathe of businesses not covered by VC.

What is crowdfunding?

The name comes by applying the concept of ‘crowdsourcing’ to that of money. It’s based around using the internet to build a much larger group of private investors. It’s a shift to a much more transparent form of investment (normal VC is very secretive). With crowdfunding everything goes into the public domain.

The concept of crowdfunding came from the early years of the 90s. The first wave started with the music industry. Sellaband.com and BandStocks.com are examples of crowdfunding. An artist puts themselves on the site and fans get a share of the proceeds if they make money. This works well in the film and music sectors where fan bases already exist.

The second wave (of which KickStarter.com in New York is one) was in the non-profit world.

The third wave was based on journalism. Conventional journalism was in decline. Spot.us is a site where journalists pitch ideas.

Trampoline started with VC funding and raised $6m in 2007. They realised it wasn’t a good time to bring in VC funding so they looked for alternative ways to do it. They spoke to their solicitors about crowdfunding, but lawyers don’t like innovation. The legal sector is based on precedent, their solicitors simply said crowdfunding is illegal.

Instead, they found a lawyer who wasn’t dismissive. Francis Irvine does work with the Open Rights Group, he likes innovation. After two months of scratching their heads, they found a legal way to do crowdfunding. They set themselves a £1m target to raise within a year. They’re doing it in a few tranches, they’ve closed their first and the second will close in the Spring.

This method of funding is not mainstream yet, but it will be. However it’s not for the faint hearted.

Benefits

They’re not victims to the VC fund life-cycle. They have a much bigger pool of influential people (investors) that will make them successful (Trampoline is only just seeing the benefits of this). Some would think having so many investors/voices would be a nightmare? However, arguing with investors is good, it challenges your ideas.

It’s not widely known, but the UK Government runs an Enterprise Investment Scheme which is unbelievably good. Wealthy people get 20% written off their tax bill and are covered for 60% of ther investment if the company goes bust.

The FSA is a nightmare though. If you get it wrong you are personally liable (not the company). It’s not easy to get started, you need to work your networks hard, do due diligence and speak to a lot of people. The Trampoline website has a few case studies. However you won’t find any content inviting people to invest on their site, they have to stay within the law.

Questions

Q. There seems to be a bias towards rich people. In the FSA regulations, if you’re seeking investment you can’t advertise it to the world (this protects the grannys). The FSA says you need to be a high-net-worth individual or a sophisticated investor to do it, but Charles how do you do it?

A. It’s illegal with a private company to incite people to invest. However, journalists can say anything they want. Journalists are your friends. You still need a website, but Trampoline’s is full of case studies. There are still exclusions: high-net-worth means £300,000 in net assets not including their main residence. You can tell these people or someone who works in the finance industry (a ‘sophisticated’ investor) that you’re looking for investment. But even if you tell them, you still can’t give them a business plan. You have to set up a labyrinthine system to get them to the next step towards investment. Sellaband and BandStocks are not selling equity, trampoline are the first to do this.

Q. What type of person are we talking about as an investor? Who invests in you?

A. There are two categories. Either 3rd or 4th levels down in their network or friends (friends of friends). Also, people who’ve read about them in TechCrunch or some other publication, they’re often semi professional tech investors.

We traditionally assume that PLCs float their shares on the stock exchange, really they can give their shares to anyone, Charles is looking at ways to reverse engineer a public company to be crowdfunded.

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Using Social Influence And Crowdsourcing To Elevate The Sesame Street Brand

Taking a page from Betty White, Sesame Street is turning to its fans to help land Cookie Monster a gig hosting SNL. A YouTube video and Facebook page feature 4 minutes of Cookie Monster auditioning for SNL, and have already garnered nearly 200,000 views on YouTube, and nearly 40,000 Facebook fans. Even a kid-targeted property like Sesame Street has also turned to social influence and crowdsourcing to help elevate the brand.

The purpose? We’re guessing it has more to do with re-igniting interest in the property among the adults that actually watch SNL and grew up with the show (unlikely many of Sesame Street’s core pint-sized audience know what SNL or who Lorne Michaels is).
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How Threadless plugged into Facebook with 190,563 fans

Threadless Weaves its Awesome Customer Support Experience Directly into Facebook, Providing a Smoother and More Interactive Customer Experience

New Support Access Powered by Parature for Facebook™, the Industry’s First and Only Social Support Application for Directly Engaging Customers and Fans through Facebook

Chicago, IL and Vienna, VA (Vocus) November 18, 2010

Threadless.com, a community-driven online design platform for retail, and Parature, a global leader in Web-based customer service software, today announced Threadless has extended its customer support and service experience by directly integrating support into the world’s most popular social network, Facebook. The new support service can be accessed at Threadless’s Facebook Page, and is powered by the first and only social support application for directly engaging customers and fans through Facebook, Parature for Facebook™.

Customers and Threadless’s more than 180,000 Facebook Fans are now able to rapidly resolve support issues by simply clicking on a Support Tab from the Threadless Facebook Page. Fans and Customers can now:

Search a knowledgebase of frequently encountered issues and resolve support issues quickly and independently;

Submit a trouble ticket if unable to resolve a support issue; and,
Post comments on the Threadless.com Facebook Page and receive an individualized response rapidly.

Threadless is known globally for its pioneering approach to crowdsourcing and social media innovation, focusing its business on helping customers build social art and design communities that make the creative and fashion design experience more collaborative, fun and enjoyable. Providing integrated support with Facebook is another crucial step in Threadless’s evolution as a social media innovator.

"We are really excited to extend our support experience to our growing community of fans and customers through Parature for Facebook,” said Brianne Hattaway, Director of Customer Support for Threadless. "Threadless's approach to support is shaped by our online community and their need for transparency and immediacy. We can reach out to our customers on Facebook even more than before and give them a fluid support experience across different channels with the same rich FAQs and personalized support that Parature enables on our site."

“In today’s increasingly social and collaborative world, customers demand support when and how they want it,” said Parature Founder and Chief Strategy Officer, Duke Chung. “With over 500 million members at last count, and recently surpassing Google as the most visited site in the United States, according to HitWise, companies are compelled to provide direct and real-time support, sales and service through Facebook. Parature for Facebook enables them to do just that.”

Parature for Facebook is the industry’s first and only customer support application for directly engaging customers and fans through Facebook and is delivered through the cloud and charged by subscription. Customers can monitor Facebook Wall conversations, posts and comments in real time, appropriately route, respond and report on social interactions, gaining an enhanced view of customer engagement and support effectiveness. With Parature for Facebook, corporate Facebook fans can search knowledgebases, submit tickets and chat directly with customer success agents without leaving Facebook. Demos are available for viewing at http://www.parature.com/res_demos.aspx

Parature for Facebook can be purchased as a stand-alone application or as part of the Parature Customer Service software suite.

Threadless.com
Founded in 2000 by entrepreneur Jake Nickell, Threadless has evolved from an online t-shirt design company into an international community-driven design platform featuring merchandise designed by and for its fan-base of nearly one million users. Considered the "poster child" of crowdsourcing, Threadless boasts a diverse community of designers, artists and general consumers from around the world who submit and vote on designs for ongoing competitions. Winning designs are produced and available for sale at Threadless retail locations and online store, and the winning designers receive $2,000 plus a $500 gift certificate. Threadless integrates its passionate, authentic and highly active community into every aspect of its business and continues to offer them new design opportunities through strategic partnerships with major brands including Disney, Dell, Griffin and Havaianas.

Parature, Inc.
Parature enables organizations to better serve, support, engage with and retain their customers via the Web. Industry-leading, Web-based Parature Customer Service™ software provides customer service organizations with a comprehensive, multi-channel way to meet the growing expectations of their customers. With more than 10 years experience, Parature serves organizations in a wide variety of industries worldwide and helps support nearly 20 million end users. Parature is among Inc. Magazine’s Top 100 Fastest Growing Private Software Companies and is the recipient of numerous product, technology, and leadership awards. Today, the Parature name is synonymous with innovation and value in Web-based customer service software, strategies and best practices. Parature is headquartered in Vienna, Virginia with offices in San Francisco and the U.K. For more information, visit http://www.parature.com or follow @parature on Twitter.

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