Wednesday, March 10, 2010

Spigit offers social media platform for company contests

Spigit, the maker of a social networking platform that lets businesses use crowdsourcing to solve internal problems, is launching a new platform today that will allow external crowdsourcing as well.

ContestSpigit is a $5,000 a month software-as-a-service offering for businesses that want to interact with an external audience of customers, partners or the community at large, said Richard Tso, head of marketing for the Pleasanton, Calif.-based firm. “It’s like the next generation of crowdsourcing, if you will.”

The three year old company has raised $14 million in venture capital, most recently a $10 million round from Warburg Pincus in October 2009. It’s also undertaken efforts to fold itself into the Microsoft SharePoint collaboration platform.

Spigit’s existing platform, EnterpriseSpigit, lets companies solicit feedback from its employees on how to solve a problem. Pharmaceuticals giant Pfizer, for example, used EnterpriseSpigit to get suggestions from employees on how to lower costs, create new products and pursue innovation.

ContestSpigit is a platform for creating contests designed to invite people to interact with a company. Cisco Systems already uses ContestSpigit for its iPrize initiative, a competition to help create Cisco’s next $1 billion business.

Pepsi and Chase bank use social networking to guide their charitable giving, although not on Spigit.

ContestSpigit gives companies four basic models for holding contests, said Hutch Carpenter, the company’s vice president of products:

* The “You Vote, We Decide” model invites participants to vote on an idea and provide feedback, but the ultimate decision rests with the company. A public company like Cisco or Pfizer would have to consider shareholder issues, for instance, not just the consensus of the crowd.

* The “Crowd Decision” gives all authority to the crowd. The highest vote getter wins. This model is not likely to be used for strategic decisions, Carpenter said, “but this concept is great for engaging your audience … and for letting them communicate to you what they think is the meaning of your brand.”

* The “Expert Decision” model is reserved for highly specialized or technical decisions made by a smaller crowd of experts. Netflix, not a Spigit customer, used this model to conduct a contest that awarded $1 million to the first person to improve the accuracy of its movie recommendations for subscribers by at least 10 percent.

* The fourth model is the “We Vote, You Decide” model, which Carpenter also affectionately calls the “American Idol” model. In this case, the company solicits all sorts of suggestions, but narrows down the choices over time, just as Simon, Randy, Ellen and Kara do on the reality TV show, then turn the process over to the fans to pick the winner via phone call or text message. “The experts make a selection and kind of filter out the worst of the crop … guiding the process toward a certain area,” said Carpenter.

Spigit compares its service to’s Salesforce Chatter offering, which was released in beta form Feb. 17. Chatter is described as a “real-time enterprise collaboration application and platform” that also includes some of the features of consumer social networking apps such as Facebook, Twitter and Google Buzz.

But Spigit goes Chatter and the others one better with what Tso calls “idea trading,” in which one person’s idea is commented on by others and builds support among members of the crowd.

“You can buy and sell the idea on an open market within the organization … based on the likely outcome that it will be adopted by the organization,” Tso said. “We aren’t just a ‘post and vote’ type of platform. Our algorithms surface the best ideas.”

Spigit’s next effort is to deliver ContestSpigit on mobile devices from Apple and RIM. Salesforce Chatter is already available on mobile devices.
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