Publically Funded & Accessible Data Can Tell Powerful Stories

29 03 2007

Hans Rosling is a man on a mission to unlock critically important data developed with public funds to help the world better understand, plan and act to improve economic, social and environmental problems. Hans is professor of international health at Sweden’s world-renowned Karolinska Institute, and founder of Gapminder, a non-profit that brings vital global data to life with its software.

He promotes a fact-based worldview by bringing statistical story-telling to new levels. In collaboration with producers of accurate statistics that are eager to give the public free access to databases, Gapminder hopes to recruit and inspire many users of public statistics.

In 2006, Rosling appeared at the TED Conference (video), an annual event that bring the leading minds across various disciplines to discuss the critical issues of the day. His presentation was engaging, dispelled myths in population, poverty, child mortality, and showed that public health was the springboard for wealth accumulation and growth among the less developed countries. His story also reminds us that action plans must be highly contextual (aka local) not simply regional to be effective as country by country (or even within country) differences are so great.

His presentation shows how even statistics can tell engaging and powerful stories to help us plan better futures.

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“Down Under” Business Deals “by Association”

29 03 2007

If you have ever read the book “The Medici Effect” by Frans Johansson you know that transformative innovations often occur at the intersection of different fields and industries. Here is one to study with an open business model.

Our association executive friends in Australia are redefining what it means for associations to serve as incubators of business opportunity for their members. Using an open business model strategy the Australian Industry Group (AiGroup) has extended its member value proposition in a completely new way.

Ai Group’s mission taken from their website is as follows:

The Australian Industry Group (Ai Group) is Australia’s leading industry organisation representing 10,000 employers in manufacturing, construction, automotive, telecommunications, IT & call centres, transport, labour hire and other industries. Ai Group’s members operate businesses of all sizes throughout Australia and represent a broad and expanding range of sectors. We provide comprehensive advice and assistance to help members run their businesses more effectively and to become more competitive on a domestic and international level.

The last sentence in this mission offers a clue to its innovation.

AiGroup has established a knowledge exchange program that provides a secure, managed environment for the exchange of information, research and opportunities between firms, universities and government agencies within its member community.

Called InnovationXchange (IXC, a link to the site is located to right) is a commercially neutral, not-for-profit, global knowledge network delivering an Intermediary Service to business and research – a new way to find the connections among member companies. With the advent of the Internet and the free flow of people and ideas around the globe, Intellectual Property (IP) management is a central aspect of the innovation process. But IP laws can also be a barrier to collaborating or doing business.

IXC overcomes these barriers using a network of staff consultants who shuttle among its members operating under a strict code of ethics and confidentiality. Providing a safe environment for the exchange of ideas and cultivation of connections through a stepped disclosure process, their service allows them to safely approach member companies to mine potential partner opportunities within the AiGroup community. Member companies retain full control over when and how corporate proprietary information is shared. IXC facilitates high level, non-confidential connections through Leadership Luncheons, Blue Sky Forums and the Visiting International Fellows Program.

Business Model

IXC provides the following business development opportunities for member organizations:

  • Identifies and facilitates new business opportunities
  • Provides insight into what R&D, IP, inventions, intentions and technologies are available from other participating organizations to meet each participant’s need for business growth and development
  • Avoids duplication of research and facilitates appropriate and cost effective collaboration
  • Identifies opportunities in international markets

The knowledge exchange service is managed under strict rules so each organization’s IP and other confidential information is protected. When AiGroup intermediaries identify links between two or more parties who wish to enter into a commercial agreement, IXC uses a staged approach for negotiations so that the companies remain in control of the decision making process.

AiGroup Intermediaries are specially trained and placed within participating firms and public institutions in a particular field, for example biotechnology or ICT. They work to build an appreciation for a participating company member’s R&D, strategy, and new ventures. This uncovers the IP, R&D or business needs as well as any technical and resource capabilities desired.

The end game is to seek and create mutually beneficial commercial outcomes for members that might not otherwise occur on its own.

Example from IXC’s site of a typical service delivery

 

A pharmaceutical Client developed a new class of drugs which showed great promise in vitro, but encountered difficulties delivering the molecules into the cells. IXC identified a nanotechnology company on the other side of the world working on industrial polymers. An IXC Intermediary visited the company, signed their confidentiality agreement and validated the potential application to drug delivery. IXC Intermediaries facilitated a conference call and a Materials Transfer Agreement ensued. The process was quick, creative and secure. To quote the CEO of the pharma company, “It would be irresponsible to place a monetary value on this opportunity, but it saved us a year of development”.

Model Expands Internationally

The model for deploying IXC Intermediaries internationally is through the licensing of locally-sponsored, independent, not-for-profit IXC organizations forming the InnovationXchange Network. Under the IXC banner, these nationally-based IXCs are supported by IXC Australia with its associated ethics, methodologies and standards and provide unprecedented opportunities for international linkages.

AI Group recently launched an IXC UK (licensed to run through Birmingham University) to serve groups in Europe, South East Asia, North America, South America and the Pacific to grow the network. They claim strong interest for additional licensees in New Zealand, Chile, Canada, Denmark, Malaysia and the United States.

ROI

Within the first 12 months of the service (2004), AiGroup achieved:

  • 20 new business opportunities identified
  • 11 new business opportunities were delivered
  • 28 further opportunities are under investigation

The pilot addresses a $1.5 billion AUD market opportunity according to Ai Group.

 

Service includes a pay-as-you-go access to its Global Trade Information Services (GTiS) database with 3.5 million suppliers and buyers.

Opportunity for You?

This open business model service adds new member value by connecting business opportunities faster, better and more cost effectively than can occur on one’s own. If you are searching for a means to build deeper member relationships and leverage your internal competencies or perhaps partner with those with such skills, this may be a model for you.





So What Is “I=PxA/T^2” Anyway? Why Should I Care?

28 03 2007

The formula on the top of this site has a primary place, because it represents the road we shall all travel down in one way or the other.

Ray Anderson CEO of Interface, Inc. (see his video appeal under the social responsibility section of this site) would say that we are entering a second Industrial Revolution that will be as transformational as the first one. Its success will reshape business and therefore all professions and industries represented by the association sector. This formula is all about becoming a 21st Century sustainable enterprise where not only profit motive is key but also running business models, creating products and services, and using processes and materials that are sustainable.

(Make time to visit the Interface website devoted to their own transformation as a 21st Century enterprise by following the link “Billion Dollar Carpet Company Reinvents Itself” on this page to the right.)

“I ” represents the net change to the environment caused by

“P” which is “population” multiplied by

“A” which is “affluence” divided by

“T” which is “technology” (not just IT technology but all forms)

In the second Industrial Revolution, how “technology” is used by business will determine the profitability and sustainability effectiveness of their businesses.

The difference is that business models, the products and services they promote, and the manner in which they are created will be designed to interact in the world more positively. This means not just financially but also environmentally, economically, or socially effective. Today, business models, products and services, and the means by which they are produced or distributed are based on purely financial value. Their design does not account for “externalities.” That is someone else’s problem.

So how does this impact associations?

What if we rethought of ourselves as “centers for sustainable enterprise promotion?” As always industry will innovate because they are designed for this (associations do not have competencies to innovate in the same way). We are also one step removed from the markets’ customers and clients.

But maybe we could support the evolution in the design, development and on going management of the sustainable “profession” or “trade” during the second Industrial Revolution? But how?

Maybe through

Making Connections – help people and organizations understand the business case for becoming a sustainable business or profession

Creating Relationships – showcase what change makers are innovating in business or other professions (inside or outside your own) in order to see concrete examples of new business models, product and services, or processes

Partnering with Innovators – seek out those who can lend their competencies, experience and thinking those already “doing it” and co-brand initiatives that can leverage this existing momentum for you; make sure your efforts support global initiatives

Linking People – to content you co-create with partners and your own community of concerned members through publications, training, databases, measurement tools, etc.

Empowering People – dont just sell them something but help them apply what they learn, possibly even help them facilitate the process of re-engineering which might lead to entirely new business models of your own (as we shall see when we examine InnovationXchange in a future post)

You can become a “trusted broker” in this revolution.

If you like, please read the following for further edification.

  • Mid-Course Correction by Ray Anderson
  • Cradle to Cradle by Bill McDonough
  • The Ecology of Commerce by Paul Hawken




Cambrian House – Out of the Primordial Soup

27 03 2007

Cambrian HouseProduct innovation is alive and well and living in Canada.

The company is called Cambrian House, a software company that is putting teh “crowdsourcing” version of peer production (aka paid contributor content) to the test. By fully integrating the end user in the entire process of product design and production they are “evolving” a host of product ideas developed with the market in “real-time.”

To get a feel for their plans, accomplishments and culture, I have posted videos under the navigation headings “Product Co-Creation” and “Case 4 Change” so you can hear them tell their story and get a feel for the “wild west” culture they embody.

 

 

A Business Model by the People for the People

CH calls itself “a community of people with broad talents and interests to create web-based products that the world wants, markets those products, and shares in the profits.” They cater to people with no time to pursue new ideas or anyone with a vision and motivated to submit ideas. Currently boasting an online community topping 10,000 members, these people discuss ideas and vote for the best in a monthly “IdeaWarz” slugfest.

 

Here is how it works from the community members POV.

Individuals register and create a profile of their capabilities. They can participate by initiating ideas, seek funding for existing concepts, or co-develop an approved product concept. Everyone participates as peer-reviewers at select “decision gates” along the way. There are no limit to number of projects you can join.

A reputation management system measures individual contribution based on peer evaluation by other community members engaged in the project – a kind of 360 feedback.

CH staff create a “brochure site” to test the winner’s popularity and usability within the community. If the idea survives, members contribute their talents (writing code, marketing, project management,etc) to bring it to life. CH’s first product (a video game) emerged from the community forums and seemed popular, so CH risked $8,000CAD on a preliminary website to promote the game. It sailed through the “market test” selling hundreds of pre-orders at half-price ($9.95CAD) in a single weekend. That response emboldened CH to invest more for the next development stage.

CH’s eventual goal is to turn each project into a separate, independently funded firm, but only after it has been market-validated.

 

 

Who represents the “crowd” in the CH community?

Creatives – concepts, campaigns, media

Developers – production of product design, test prototypes

Entrepreneurs – suggest plan strategy, evangelize to get people to help or buy/sell, champion a product team

Investors – offer feedback on a business plan, counsel entrepreneurs on funding pitches, buy into a product

Marketers – provide pitch feedback, create good copy and creative input to campaign, direct creative for product site, blog, media,etc.

ROI?

CH exceeded its first year Q2 goals of 100 members and 1000 ideas with 4000 members and 1500 ideas. So far, CH has only one project earning revenue: Prezzle.com, a service for sending virtual best wishes and gift certificates.

This month (March 2007), CH is to release its first all-peer product, a video game called Gwabs. From concept to finished product, it took the volunteer team six months and cost $200,000CAD. CH estimates that producing it with in-house staff would have taken 50% longer and cost three times as much.

CH forecasts a modest revenue of $1 million for 2007, but expects that to leap to $5 million in 2008, and its community to surpass 100,000.

Later this year CH plans a big gamble: opening up its platform so anyone can propose a crowdsourcing project outside the firm’s formal development structure.

What’s in it for the Community of Volunteers?

Core incentives to participate include payment in cash or royalties defined and mutually agreed-upon by product champion and contributor. Each community “idea contributor” in a project (typically, about 30 in all) receives “royalty points” worth a share of the project for as long as it generates revenue (likely about five years). CH takes 50% off the top for project management, sales and marketing.

Why does co-creation models work?

 

Think…

Massively distributed talent collaboration versus traditional command and control model.

A pyramid that shapes and refines (subject matter experts, staff and end users).

Gates to evaluate and decide “winners.”

A process with steps, guidelines to ensure efficient collaboration, quality and execution.

So simple even a caveman can do it…….

 

 

 

 





Motivation Behind the Peer Production Phenomenon

26 03 2007

Volunteerism “Lives”…. Only Differently

Peer Production as a means of producing knowledge-based products and services is no longer restricted to software development among the open source software crowd. It has become a new experimental product development process that includes “end users” in the entire process of production from ideation, design, development, distribution and even promotion. And the audience with whom this process most appeals are those under the age of 30 and is driven by their desire to volunteer their creativity and knowledge in less traditional structures and cultures.

In recent years, we are learning that the “Bowling Alone” argument (the death of volunteerism) was in fact a reflection of the loss of interest in the old means of “participation.” It wasn’t that people didn’t value volunteering. It was more about how they were permitted to engage. Evidence shows that younger people prefer a different means of engagement that is mostly online and collaborative with a high results-orientation. It is through this “web first” mentality that they then find value holding face to face meetings to further strengthen their relationships.

In 2002, Boston Consulting Group conducted a survey of open source software “hackers” to understand their motivations. The assumption for some time was that they were driven to destroy companies and systems building “proprietary” software like Microsoft and others. The results indicated the opposite.

  • 43% found open source projects “intellectually stimulating” and a chance to “improve their skills”
  • 34% believed code should be open
  • 30% enjoyed doing something outside of work
  • 30% do it for professional status building
  • 11% “beat proprietary software”

When asked to quantify the time spent per week on “volunteer” projects over 50% spent between 1 and 13 hours outside of work.

Growing Up Digital

Don Tapscott’s study on the NetGeneration also helps us appreciate the motivations and cultural differences that fuels the online collaborative explosion across the Internet that has spawned communities, social networks, and self-organized, self-generated content of all types from text to images and audio to video. This generation prizes:

Freedom of Choice – the more options they have the better they like it

Freedom to Customize – the ability to “remix or modify” to create a personal stamp

Intense Scrutiny – ability to examine in depth before investing resources and willing to share their reviews with others

Importance of Integrity – in an era of disruptive change and uncertainty they seek that which they can trust

Collaborative Relationships – most want a “two-way” interactive experience with the brands they choose to associate including how those products and services are designed and produced

Having Fun/Enjoying – the experience of using something is almost as important as the results from the product or service

Speed/Immediacy – time to market and the ability to access something over different platforms

Innovation – the importance of good design as a driver of product value; the desire to work where the culture is dynamic, leading edge, creative, efficient, and modern

Lesson

We must take heed and examine:

  1. How member value must change to adapt to these needs, expectations and desired outcomes?
  2. How can our process of producing products and services adapt to become more inclusive of the end user to co-create products and services?
  3. What does this mean to our traditions and intangible assets such as our culture/values, leadership development (volunteers and staff), and new competency requirements?

The good news is that the largest generation the world has yet known is very willing and able to contribute their talents. The challenge is to adapt the old ways or risk losing them to the formation of new “associations” of talented professionals whose networks embrace these new ways of being.

In my next post we shall examine Cambrian House from Canada. A company built on the  crowdsourcing (paid content contribution) version of the peer production model that is being innovated by many as you read this.





SecondLife 101

23 03 2007

From our “friends” at Google, here is a video presentation overview of SecondLife. What is it? What does it look like? How do people make money?

Frankly, I’m guessing that the value to business is driven by “who” frequents the world of Second Life aka an opportunity to advertise interactively with users to promote products or possibly 3D head hunting. Or maybe product collaboration.

Second Life is an online world with a growing population of subscribers (or “residents”); currently, the community has well over 325,000 residents from 91 countries. By providing residents with robust building and scripting tools, Linden Lab enables them to create a vast array of in-world objects, installations and programs. Since its early stages, Linden Lab has allowed its residents to retain full IP rights over their own creations, thereby insuring that their contributions to the community remain truly their own.

Hang in there at about 13.30 minutes in to this video they provide an overview of the demographic.

  • 43% female
  • 32 is the average age
  • age distribution is similar to the US population curve
  • 25% reside outside US

Amazingly, some people make as much as $100K+ per year creating things like clothing, objects,etc for others to buy via PayPal accounts. Yes, that’s right.

  • Other ways Business is encouraged to use Second Life according to Linden Labs:
  • Presenting, promoting, and selling content to a broad online audience
  • Collaborating and communicating in real time between multiple participants
  • Researching new concepts/products
  • Training and educating in virtual classrooms

Bob Sutor of IBM, a leading thinker on Second Life, posted in his blog that Linden Labs has released the latest statistics on the Second Life Community. You can find them here.

 





InnoCentive – Fortune 500 meets 80K Biochemists

23 03 2007

Community That Brokers Expert R&D Solutions

In 2001, InnoCentive was begun by Eli Lilly as a web-based community matching the global biochemistry scientist community to R&D challenges facing leading companies rewarding scientific innovation through financial incentives.

Companies (like Proctor & Gamble an early entrant) contract as “seekers” to post R&D challenges gaining access to a growing global community of currently 80,000 scientist “solvers.” Many of these professionals were attained through agreements with universities and research institutions throughout the world.

The process provides IP protection for the “seekers.” They review together with InnoCentive solutions returned by “solvers” and selects the best solution. Innocentive issues the award to the winning “solver” which has reached payments as high as $100,000US.

Business Model

Once a solver executes a services agreement a private online room is created to interact with InnoCentive staff and permit the review by the approved solvers of the seeker’s confidential material

The solver’s proposed solutions are posted and then reviewed by InnoCentive who work with the solver to refine as needed. Innocentive selects the best submission and awards are paid to the solver. Identities of both parties are kept confidential until a verified submission has been accepted and award paid; InnoCentive bills the seeker for that amount plus its fee. An indemnity agreement is obtained from the solver to protect both the seeker and InnoCentive.

ROI

Year 1 – 2001

12 challenges issued with 82 submissions from 16 countries

Total awards paid out totaling $333,500US

Total fees paid by seekers to Innocentive $430KUS

Value of solutions to seeker $8.8MUS with a cost savings of $200KUS (20:1 cost/benefit as measured by P&G)

InnoCentive charges roughly $80,000 per solution after award payment.

Desire to Accelerate Life Saving Medical Research

Recently, InnoCentive announced that Prize4Life, Inc., a non-profit organization founded to accelerate Lou Gehrig’s disease research, has offered a $1 million incentive for innovative research achieved through InnoCentive.

In December 2006, The Rockefeller Foundation and InnoCentive announced that the Foundation will create a non-profit area on InnoCentive’s global scientific network, specifically designed to spur science and technology solutions to most pressing and complex humanitarian challenges posed by non-profit entities selected by the Foundation.

 

Expanding One’s Stakeholder Base

This service expands the global diversity of audience of solvers by geography, field, work experience and life stages. Contract labs, retirees, students, faculty, small pharma, biotech firms, and research institutes are all signed up through InnoCentive. Over 50% of Solver Awards have come from outside the US. And foreign governments have embraced this model as it keeps their best and brightest at home.

What This Teaches Us?

If you are an association whose members’ professional expertise can be tapped (e.g. computer scientists) you may be able to leverage your existing network of experts to create a intermediate market that matches their supply of talent with challenging problems that seekers of solutions might find attractive. You might leverage your global brand name to create a trusted “networked information resource” community that lets your members solve problems and make money doing it. You could collect fees from seeker companies who might have never spent that kind of money with you previously (e.g. advertising, sponsorships,etc) because they didnt impact their revenue opportunities.  You might further increase the sales of your existing products and services as more people use the “business community” you have developed (e.g access to your digital library to reference something to help you with your research).

It would be a compelling value proposition whose member value includes not just the ability to buy commodity products and services at a discount, but more importantly, the ability to source paid opportunities to practice their craft and advance society through the solution they propose. Makes renewing your membership more of a no brainer…