The naysayers like to write-off crowdsourcing as a marketing tool for brands that shortchange consumers for ideas. While it is true that a shallow crowdsourcing campaign can do that, companies that incorporate crowd innovation into their DNA not only create opportunities for the organization but also enrich the communities within their influence.
One clear example is within crowdfunding. While crowdfunding is clearly democratizing raising startup capital and making it more transparent, it is maturing into a more effective solution for entrepreneurs with innovative ideas.
Startup entrepreneurs realize that they need more than capital to seed successful businesses. Venture capitalists and early state incubators usually provide these entrepreneurs with all these tools – design, legal and marketing services as an example. Crowdfunding entrepreneurs are usually left to fend on their own and are groping in the dark. Up until now.
Large corporations, at the forefront of innovation like GE (GE Ventures) and P&G are leading the way and providing deep technical and operational expertise by collaborating with crowdfunding platforms. These companies want to celebrate and welcome new ideas – no matter where it comes from! This new development signals the next big wave in crowdfunding – one that incorporates the power of crowd action with expertise from the industry. We are now seeing different business models around crowdfunding for corporations by partnering with crowdfunding platforms
GE Embraces Crowdfunding
GE is one of those companies that thrives and touts its innovative DNA from top to bottom. Last week, OurCrowd, Israel’s leading equity crowdfunding platform for accredited investors, announced that it has closed a “strategic co-investment partnership with GE Ventures, the corporate venture capital unit of GE.” With this partnership GE Ventures will co-invest with OurCrowd in select early stage companies in the areas of energy, healthcare, software and advanced manufacturing.
P&G Wants to Help Crowdfund Your Business
CircleUp is another company that has partnered with P&G, that believes open innovation is all about finding the best solutions available, wherever they might come from. This partnership will throw the focus on early stage technologies that could match P&G innovation needs.
Why are P&G, GE thinking about Crowdfunding? Here are 5 reasons.
- They want to stay relevant and not lose a valuable idea that can help them stay innovative – great ideas can be sprouting beyond their corporate campuses.
- Their external stakeholders can also validate ideas important to them.
- Crowdfunding platforms go through a vetting process and this is a valuable service to these industry leaders.
- They understand that the operations and technical backing that they have can take a good idea and make it great.
- By partnering with international platforms, these companies can stay relevant in new markets and tap into cultural and regional expertise for their existing products.
So, imagine if this works for GE and P&G – the potential will open doors to the R&D budgets at these companies and rally entrepreneurs. I see this trend catching on especially with companies that have a robust crowdsourcing platform in place and an active community like LEGO CUUSOO, LEGO’s popular co-creation platform that sources ideas from its die-hard fans. Will we see LEGO CUUSOO do the same or will they develop their own crowdfunding platform and tie it to their product innovation? Another company that routinely relies on the worldwide community for its sustainability efforts is Unilever – are we going to see big strides from them to fund the best community ideas to meet their lofty goals.
I personally think change is here and the future is now. The only companies who will survive and keep innovating will be the ones who are hungry to drive innovation.
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