Thursday, September 30, 2010

Crowdsourcing: Turning customers into creative directors

by Fiona Graham - Technology of business - reporter, BBC News

"The office building doesn't look so good from the outside, we don't need it to, so the rent is lower, but inside it's really nice." Ning Li is's 28-year-old CEO, and we are at the company's London office, on the 11th floor of an unremarkable Notting Hill office block. is an online-only furniture retailer, so there's no danger that customers will drop by. The company is six months old and already approaching profitability, with revenue doubling month on month, despite relying on word of mouth rather than marketing. The Union Jack Piggy Bag from The company imports 80% of stock from China, and sources 20% in the UK.
But this is a furniture business with no warehouse - and no inventory. Instead, products are "crowdsourced". This is how it works. Visitors to the website are encouraged to submit their designs. The best of these are worked up into prototypes, and posted on the website. Registered members of the community vote. The most popular pieces are then available for pre-order - made in China, shipped by container and delivered directly to buyers from the port.
The designers are paid nothing upfront - but receive 5% royalties on successful designs, which Li maintains is above the industry average. Ning Li: "What we think is good for the consumer doesn't matter - it's what the consumer thinks is good that matters."
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