Wednesday, March 3, 2010

Venture capitalist seeks to tap wisdom of the crowd

A Minnesotan who started a landscaping company as a teen, worked in his family’s construction company and ran a commercial real estate holding company is hoping to transform how technology companies get financed.

Traditionally, entrepreneurs pitch their ideas/products to venture capitalists who decide whether the idea is worth its salt. But Matthew Crowe’s startup — Huckleberry Ventures — is attempting to turn that model on its head. His venture will fund companies based on what average Joe/Jane wants.

The idea is to build a crowd-sourcing technology platform where people can submit ideas about what they would like to see in consumer goods or say what they don’t like about something. That will form the crux of the yet-to-be-launched website — What’ And as more people submit entries, trends will emerge, or at least that is the hope.

Trends that will say X number of people really want Y problem to be solved. And then Crowe can reach out to the entrepreneur community nationwide to alert them of this need — if he finds entrepreneurs that already have a solution, he will ask them to submit their ideas. The crowd will vote on which ideas they like, thereby refining the pool of ideas and identifying the companies that Crowe can fund.

“If this works correctly, the crowd would de-risk our investment because we are providing something that people told us they want versus what we think they want,” Crowe said, in an interview last week.

Sounds logical enough. But it’s a tall order given that Crowe’s background is in commercial real estate — though he has dabbled in high-tech companies ever since he shut down his commercial real estate holding company a few years ago. He won’t name any because some of those high-tech startups no longer exist, but more important, none of them were actively building a brand. That is something Crowe hopes will change when he launches What’s your Huckleberry? by May.
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