Tuesday, August 24, 2010

Crowd Sourcing Disaster Relief

This article was written by Lukas Biewald, CEO of CrowdFlower and Leila Janah, CEO of Samasource.
On Thursday July 8, 2010, residents of Oakland took to the streets after a jury convicted police officer Johannes Mehserle of involuntary manslaughter of Oscar Grant, a 22-year-old unarmed black youth. Race-related riots are not new to California. But this time, the first people to learn about violent incidents tied to the protests weren’t riot cops — they were the Oakland residents behindOscarGrantProtests.com, a website that allowed people near the action to map incidents of violence and view reports from others. Established in a few days, OscarGrantProtests employs crisis mapping technology from a group of open-source developers called Ushahidi, who built the software to report violence in the aftermath of the 2008 disputed Kenyan presidential election.
Ushahidi has radically altered the way we respond to disasters by placing reporting power in the hands of people who might otherwise be victims. Virtually every disaster affecting large groups of people presents the same problem: in the absence of real-time data, emergency responders don’t know where to go and when. Technology can solve this problem quickly and cheaply, but governments and relief agencies don’t often use it.
Telecommunications infrastructure is now ubiquitous — even in sub-Saharan Africa, eight out of 10 adults have access to a mobile phone. The four billion cell phones in use around the world create massive amounts of data and demand for crowdsourcing technology to aggregate, categorize, and otherwise make sense of it.
Mission 4636 provides a good example of how we can use data from mobile phones to make relief efforts more effective. In the aftermath of the January earthquake that shook the Haitian capital of Port-au-Prince, millions of Haitians lacked food, water and shelter. Aid workers flooded the capital, but lacked information about who needed help, and where. Voila and Digicel, Haiti’s two major telecommunications carriers, had their cell towers up and running immediately following the quake, but huge call volumes exceeded their capacity and resulted in service outages. Text messages offered a solution — texts take up less bandwidth than calls, and are much less affected by network delays.
A group of companies, including Ushahidi, FrontlineSMS, CrowdFlower and Samasource, collaborated to set up a text message hotline – “Mission 4636” – supported by the U.S. Department of State. The Haitian government collaborated with radio stations to advertise the hotline, and a few days after the disaster, anyone in Port-au-Prince could send an SMS to a toll-free number, 4636, to request help. The messages were routed to relief crews at the U.S. Coast Guard and the International Red Cross on the ground.
In the first month, Haitians sent more than 40,000 texts to 4636. But Mission 4636 ran into a problem: the messages were in Haitian Creole, but the aid workers designated to respond spoke English. Worse still, many of the texts contained location information that only Haitians familiar with the geography of Port-au-Prince could comprehend, such as references to neighborhoods or popular landmarks. Without a translation service that could operate in real-time, Mission 4636 provided little value to victims of the earthquake.
Traditionally, governments solve problems like these by hiring contractors — after major disasters, it’s not uncommon for relief agencies to spend millions of dollars building temporary call centers to handle the flood of new calls. Outsourced translation firms abound, but charge large premiums to deliver translation on a 24/7 basis. In Haiti, crowdsourcing provided an answer: we customized Ushahidi and CrowdFlower’s technology to allow hundreds of thousands of Haitians living outside the country to translate texts from Port-au-Prince in real time, and for free, via a public website. News of the site spread quickly through the Haitian Diaspora living abroad, who heard of our efforts through a grassroots media campaign The results were immediate. In the first day, Mission 4636 got a message from an overcrowded hospital that was running out of fuel. Within minutes the message was translated and desperately needed fuel was deployed.
Mass collaboration accomplished more than Creole-English translations — armchair disaster relief agents around the world also collaboratively edited maps and information about Haiti to assist aid workers. A few days after the disaster, Openstreetmap.com, a Wikipedia-like site for amateur map makers, had more accurate maps of Haiti than the U.S. Department of Defense.
Perhaps most critically, crowdsourcing provided hundreds of thousands of data points on what Haitians most needed after the earthquake. Surprisingly, after immediate needs were met, text messages sent to 4636expressed unprompted demand for something other food, water or shelter — people started asking for travay, or work. It became clear that short-form translation could create needed jobs in parts of Haiti flooded with refugees from the disaster. Samasource trained 50 people in Mirebalais, a small rural community in Haiti’s Central Plateau, to translate the 4636 messages on the web after Ushahidi volunteers categorized them by priority level. Using netbooks (small, cheap laptops) powered by a generator and a satellite Internet connection, these workers translated tens of thousands of messages, forming a kind of “virtual assembly line” with the Ushahidi volunteers.
The rapid proliferation of broadband, wireless and cell phones, coupled with new crowdsourcing technology, is completely changing the face of disaster relief. Everyone with a computer can provide crucial assistance, sifting through satellite photos, translating messages or updating maps, and most people are happy to do this free of charge — contributing to life-saving relief efforts is a powerful motivator. Mission 4636 cost less than $500,000 to design, build and deploy. At a fraction of the cost of most relief budgets, crowdsourcing can solve coordination problems on the ground. Governments and aid agencies should make it a central part of future disaster response efforts.

Saturday, August 14, 2010

Hipster Fashion Line Rides Crowd Sourcing To Business Success

Jake Nickell, founder of Chicago-based Threadless.com t-shirts, had no intention of turning his hobby into a career. But after three years of running an Internet-based clothing company, Nickell soon realized that he had the chance to transform something he loved doing into his job, He hasn’t looked back since.

Over the last decade, Threadless has grown from an art school project run out of Nickell’s home in Chicago into a crowd sourcing pioneer, with 75 employees and a brand that has become an iconic name in casual fashion.

“It was initially a hobby. It was never intended to be a business,” Nickell said. “We just want to be the awesomest [sic] place for people to hang out. We don’t think of it so much as selling t-shirts, but as a place to hang out and make art.”

Unlike old-school art “happenings” that took places in artists’ studios, warehouse space or industrial districts, this one, until recently, resided exclusively on the Internet.

Art and commerce

From day one, Nickell established a business model that encouraged artistic expression. Designers post their t-shirt concepts to the Threadless website, where an active and critical community rates the picture. Threadless then prints the highest rated designs onto t-shirts available for purchase on the website.

Despite the system leading to millions of shirts sold every year, Nickell didn’t initially intend to make money from his project. Since it’s inception, Nickell has had only two goals for the business: Provide artists with an outlet where they can simultaneously distribute their work and make money, and give wearers a voice in which designs get produced..

“I think my lack of understanding of traditional business stuff has actually helped us. It has been really helpful for our corporate culture,” Nickell said. “Even today, a lot of our decisions about doing stuff are based on how cool it would be.”

The artists receive $2,500 if their design makes it onto a shirt and another $500 if popular demand leads to a reprint of the shirt after the initial run. In recent years, Threadless has moved beyond t-shirts, printing the designs on everything from water bottles to iPod cases. If an artist makes it onto one of those other items, they also receive $500.

That high fee comes from Nickell’s respect for the artists, and many designs never make the company any profit at all.

“Because our award is so generous, many designs never recoup their costs,” Nickell said. “However, we strongly believe in a model that equally rewards all printed artists for the first printing of a tee. This contributes strongly to the ‘all for one and one for all’ spirit of our community.”

Crowd sourced success

By tapping into a community of artists to design the products, and a community of fans to vet them, Threadless became one of the first companies to take advantage of an Internet business model now called crowd sourcing. However, Threadless’ model predates the coining of that phrase by four years, and Nickell hates the term.

“I don’t like [the term] crowd sourcing. It seems sterile and one sided, like a company needs something and goes to the crowd to do it for them,” Nickell said. “We’re more passion-based. We see people doing these awesome things, and we want to help them with it.”

To emphasize that connection with its artists and its customers, Threadless is going on tour this summer. Nickell has transformed a camper trailer into a mobile store that will drive across the U.S., giving customers and artists a chance to meet each other and the company’s employees.

Similarly, in 2007, Threadless opened a brick-and-mortar store in Chicago. Even though the store is far less profitable than the website, it grows the brand as a community center and venue for t-shirt and art classes, Nickell said.

Deliberately opening a store destined to be less successful than a profitable website might seem like a step backward to most business owners, but that move is yet another example of how Threadless has succeeded by putting art first and money second.

“If I had to give up one thing, it would be the money I made from this, because the relationships I’ve made with artists is so valuable,” Nickell said.
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Monday, August 9, 2010

Microfinancing to solve academic poverty?

By Leila Sattary

With budget cuts starting to bite and a fresh wave of bad news expected in the Comprehensive Spending Review in October 2010, UK scientists are looking for new ways to finance their research. One funding method gaining momentum in the US is 'microfinancing', where many members of the public donate small sums of money, usually online, to research projects they feel are worthwhile.

Microfinancing is a term most commonly used to describe the financial services provided to help people out of poverty. Now the term is being applied to research projects funded by numerous small contributions of money. Over the last 3 years, a number of microfinancing initiatives for science research have emerged in the US.

The Open Source Science Project allows researchers to propose projects and pitch for funding from the broader online community. Priyan Weerappuli, the project's executive director, believes it is successful in helping researchers find alternative funding sources.

Could lots of small donations be the future of research funding?
'The project started in a time of funding cuts in the US and intended to give researchers a different funding model and also increase scientific literacy in the public,' he says.

'Initially most projects were "pop-science" - subjects that were already in the public eye - but now many projects that are funded are in niche disciplines.'

Although the way projects are financed differs greatly from the traditional funding routes through government, charity or industry, there are many familiar features.

The public can choose to fund individual projects and work by indivual researchers
Projects are peer reviewed by experts in their field before they are placed online for funding, a research log must be kept to update the donors on progress and researchers are expected to publish an informal paper on completion. There are also some unique positive aspects to the scheme - researchers retain complete ownership and intellectual property rights and are free to publish as they wish. Although anyone can apply, about 70 per cent of projects on the Open Source Science Project were proposed by university academics.

Fund Science, SciFiles and EurekaFund are all similar US initiatives where donors can choose from a list of public abstracts. If this trend for 'crowd-funding' science continues to grow, it could be one means to alleviate the low application success rates at federal funding agencies.

The closest example of microfinancing for science on this side of the Atlantic is Cancer Research UK's MyProjects scheme. Launched in October 2008, MyProjects allows Cancer Research UK donors to search projects by type of cancer and location to find a specific research project to donate money. Samantha Collen, senior project leader at Cancer Research UK, believes that giving supporters greater choice in how they give money makes the process more valuable and allows people to see the impact of their donation.

'We also wanted to take advantage of the viral potential of the web. MyProjects has broadened the reach of Cancer Research UK and targeted a younger audience, a higher proportion of men and more people who have not supported the charity previously.'

While microfinanced projects are usually peer reviewed, ultimately the public decide on whether a project is convincing enough for them to part with their money. Letting the public choose does reduce bureaucracy but risks concentrating funding in areas that are more publicly understandable. The serendipitous nature of research makes it difficult to solve specific societal problems, like climate change or cancer, by simply concentrating effort in those areas.

Microfinancing for science remains a very small fraction of the funding portfolio in the US, and it is yet to take off in the UK. However, as more researchers slip into academic poverty in these times of severe budget cuts, microfinancing could be a potential way of sustaining scientific research in the UK. Interesting? Spread the word using the 'tools' menu on the left.
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Saturday, August 7, 2010

Cloud Funding Offers More than Pennies from Heaven

by Tom Harnish

In the age of social networking, if you need money for an art project or for a new business, friending could also mean funding.

Chris Young wanted to shoot a feature film presentation. The plot: dude's car breaks down in the desert, no mobile signal, not a soul in sight. Parched, our hero stumbles into a lonely gas station where he makes a disturbing discovery. Someone, or something, is chained to a backroom wall.

Bankers didn't get it, but people on Twitter, Facebook, and LinkedIn did. Within eight weeks people donated $11,350 (more than his goal) so Young could shoot the 3D live-action short. What did those 92 people receive in return? Depending on how much they contributed, Young's collaborators were given special mention in the credits, invited to the first screening and party, or announced in the main titles as Executive Producer.

Welcome to the world of cloud funding, also known as crowd source capital or social funding, where entrepreneurs combine social networking with project fundraising.

How it Works

Unlike peer-to-peer microlending, which was introduced to the U.S. in 2005 by Kiva, social funds aren't paid back. Unlike debt funding from banks, social funding doesn't require you to pledge collateral or offer personal guarantees. Unlike equity funding from venture investors, you don't have to give up equity or control.

Young used IndieGoGo to raise the money for his project, but other cloud funding websites exist. Kickstarter, Pledge Music and SellaBand focus on the arts, and Spot.Us helps support investigative journalists. IndieGoGo and Invested.in help a wide range of entrepreneurial effort from musicians, to writers, filmmakers, game or application developers, designers, inventors, non-profits and charities.

IndiGoGo was launched in 2008 to leverage social marketing with view that it would democratize lending. And it has. Contributors from 120 countries have participated in more than 5,000 projects on IndieGoGo. The average fund raising goal is about $5,000, but projects range from $500 to $25,000.

The process is straightforward. You create an account, and website forms help you build a project description, establish fund-raising goals, and explain "perks" designed to entice people to contribute at various levels.

Some people will contribute simply because they like what you're doing, and projects with a video description raise 122 percent more, according to IndieGoGo. Other people will be attracted if you offer desirable perks. Contributions tend to be in the $50-$75 and $300-$400 range.

IndieGoGo makes money the old fashioned way; they get 9 percent of whatever you raise. But they add an innovative twist: If you meet your fundraising goal in the time you've set, they pay you back 5 percent. This offers you an incentive to market your project aggressively so the site has a better chance of making money. 4 percent of something is better than 9 percent of nothing, after all.

What if You Don't Make Your Goal?

Nevertheless, not all projects meet their fundraising goals. In any event, if your project is underfunded, you've still learned a valuable lesson. If you can't attract people to your project you know that either your project isn't attractive or your marketing isn't working. Good ideas are a dime a dozen, and most people will politely give you their two cents worth when asked for an opinion. But when it comes to dollars for dancers, say, they may not be as enthusiastic.

Surprisingly, if you don't reach your goal, you still keep the money you raise, less the websites' take. Even more surprisingly, according to Danae Ringelmann, President and co-founder of IndieGoGo, contributors understand they won't get their money back if the project isn't fully funded.

But if you get to keep the money, even if your project isn't fully funded, doesn't that attract people who dishonestly claim they have a project so they can to run off with the money? No, says Ringelmann, "People inherently don't have an itch to fund the unknown. (But) if a friend, blogger you like, or organization you're a part of funds a project and tells you about it, you're much more likely to fund it than if you stumbled upon it on your own."

According to Ringelmann, "The transparent and open nature of cloud funding gives project champions the opportunity to showcase their growing community and the traction on their project — two key elements that not only build trust and spark a movement, but also provide validation that the project is legit. So projects that don't reveal who's behind them, don't have a core community, and don't do outreach to showcase the community building around it are very poor candidates for success. A person who wanted to commit fraud by raising money and running would have to be willing to destroy their reputation and social graph connections across the web to succeed."

Regulatory Issues

Federal and state laws govern debt and equity funding. Any investment opportunity that's offered to the general public, no matter how small, has to be registered at substantial expense with the Securities and Exchange Commission (SEC), for example. Technically, you can't even invest $10 in a project led by someone you know personally if they offer you a share of the profits from their venture.

But that may change thanks to social financing. A successful crowdfunding campaign raised $1,300 to cover the cost of preparing a petition to convince the SEC to exempt projects of $20,000 or less, and for contributions of $100 or less. If public response is strong enough, the SEC might just make the change — all thanks to the power of a crowd.

It's Not Just About the Money

Over a two-month period, 97 people contributed a total of $2,700 to help Elaine Zelker, a hospice nurse, produce a photography exhibit of her patient's hands for display in a local gallery. In return, her contributors received a big thank you, or — if they really dug deep — a coffee table book of the collection. That's all.

Zelker say, "I'd love to book more 'hand participants' and capture their last photo. Everyone has a unique story to tell. I am not able to leave my day job yet, and do photography full time. I am waiting for that moment."

That may happen. She's booked a half dozen photography jobs over the past three months. They may not have been a direct result of the exhibit project, she says, but now she knows people love her work. Social funding may have helped her take her photography to a new level.

Who needs pennies from heaven when you can find dollars in the cloud?

Tom Harnish is a serial entrepreneur. Always on the bleeding edge of technology, he learned what works (and what doesn't) when raising money by spending countless (and often fruitless) hours in front of lenders and investors.
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Thursday, August 5, 2010

Crowdsourcing 101 for Emerging Brands

Posted by Sheila Shayon on August 5, 2010 02:00 PM

Crowdsourcing, a term coined by Wired writer Jeff Howe and explained in the video above, is without a doubt a key digital marketing trend for 2010. The New York Times suggests that small brands shouldn't shy away from tapping into the public's willingness to share ideas to help spur innovation and feedback, and cites the example of a particularly savvy (and successful) tiny brand as a case study.
Trek Light Gear is an online retailer that turned to the wisdom of the crowd out of necessity. Based in Boulder, Colorado, the site sells backpacks, tarps, and its iconic lightweight parachute nylon double hammock. Amazingly, it has a full-time staff of .... one: its founder, Seth Haber, who tells the Times, “I’m always trying to seem bigger.”

Haber turned to the ‘wisdom of the crowd’ for inspiration on growing his business. Working with local market researcher Napkin Labs, Haber engaged with consumers on the key branding question: ‘Should he focus his efforts on the company’s hammock or expand into related areas, like products for campers?’

Napkin Labs tapped into its network to provide feedback, and the crowdsourced answer was loud and clear: grow the business! “It really confirmed my decision not to pigeonhole the business around the lightweight hammock,” said Haber. (Napkin Labs, on average, charges about $10,000 and up for its crowdsourcing and consulting services.)

In his landmark book Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business (condensed here), Howe articulates four basic approaches:
• Collective intelligence: Firms like InnoCentive use the crowd to solve complex problems.
• Creation: Agencies like Ad Hack connect companies with creative talent.
• Voting: Brands like Mountain Dew let users vote on the look of new brands.
• Funding: Sites like Kickstarter raise money through the crowd.
A few additional basics on successful crowdsourcing:

Define the job clearly and then find the right partner through the web – and then turn to Twitter. “This is a place where social media can be superhelpful,” says Niel Robertson, chief executive of Trada, a crowdsourcing firm focused on pay-per-click advertising, who advises always including the tag #crowdsourcing.

Distill your goal. According to Napkin Labs’ CEO Riley Gibson, exploratory queries work best. “What are people’s thoughts on product A? How can we make it better? And what will it look like in five years? It’s not always easy from looking at a site to discern these subtleties. It really helps someone who’s browsing a marketplace to understand who the customers are.”

Ongoing engagement is crucial. Respect the process once it’s begun – stay in the dialogue with respondents to your query and once chosen, work with prospective designers and developers through feedback and review. “Don’t look at crowdsourcing as set and forget," adds Robertson.

Scale and pay as you go. The crowd is the cloud – and can be scaled and remunerated step-by-step.

And now to that Trek Light Gear double hammock…
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EditLift Founder Matt Wise: ‘Cosembling’ a Business Model that Serves

Matt Wise, founder of EditLift, can explain the up side of ADHD like no other. He uses an analogy that involves a lion sleeping uder a tree during daylight hours, and then leaps up to hunt its prey in the darkness. It will only return to the tree when its hunger is satiated. In other words, the lion reserves its strength and energy for only what matters. The lion’s focus is heightened when it is necessary.

Sounds an awful lot like a techpreneur. In fact, it sounds an awful like Matt.

The Florida native and self-professed late bloomer’s focus has taken him from military service to law school and ultimately to the ranks of Internet founder.

His latest venture, EditLift, offers on-demand, cost-efficient, high-quality proofreading and editing services that guarantees a fast turnaround using a software as a service (SaaS) platform. Wise and his colleagues have developed a business model that provides a stream of income for an online community of qualified professional editors and proofreaders who can manage their workloads with the SaaS platform. Users of EditLift have an opportunity to submit their work for a free estimate before they commit to paying the $3.99 per page rate. Simply put, EditLift relies on crowdsourcing to produce outcomes satisfactory to contractors and clients.

EditLift is Wise’s response to the scores of professionals who lost jobs and business during the economic downturn. Considering research on crowdsourcing and the movement towards outsourcing, Wise came up with a plan that created a stream of income for the under employed and unemployed. A sense of community service coupled with a good business acumen informed the concept of EditLift. Matt says,

Historically, there have always been people who work as freelancers. There is a significant percentage of the labor pool that freelances. Basically, we started to look more at writing, editorial and publishing. There was no one vehicle that offered affordable editorial services with a quick turnaround.

But that’s the soft side of the model. Matt calls the most intricate details of his business model “cosembling” or collaborating and assembling. Cosembling began when Wise came together with a team of colleagues, all of whom have skill sets important to developing an Internet property.

He explains it this way,

Cosembling is like incubating. For cosembling, you have to focus on a product or service that requires little capital to build a prototype, and can be launched in a short period of time. We only focus on businesses where you have a revenue model. You bring together the right team to develop a prototype, build it out, and determine to progress to different iterations as you monitor its success.

Wise noted the financing model for start-ups is rapidly changing. You don’t need a large amount of money to start a business. Entrepreneurs are building prototypes to prove market viability, and increase a property’s valuation without feeling the pressure of V.C. money weighing down on the product and its producers. To that end, Wise is a proponent of entrepreneurial freedom.

EditLift is the first in a family of Web services using SaaS and the cosembling model. Apparently, the lion isn’t ready to rest under the tree.
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