Editor's Note: Dan Williams serves on the board of directors and chairs the Internet and Emerging Media Council of the Electronic Retailing Association (ERA), the main trade organization for the direct response (DR) industry. ERA member companies spend about 3 billion dollars per year on advertising, mostly television, including both spots ("short-form") and infomercials ("long-form"). Paul Spinrad recently spoke with Dan about crowdfunding and DR. Here's the conclusion of a three-part conversation, beginning with some of the key issues involved in what Williams calls the "art and science" of DR and how they relate to crowdfunding. (Read part one here and part two here)

Paul Spinrad, Crowdsourcing.org: Another issue I think many crowdfunders are naïve about is patents. I was at a conference where an IP lawyer spoke and said that many crowdfunders should be applying for provisional patents before they launch their fundraising. She explained that provisional patents are a cheap way to protect your idea, or at least give you the option later, even if you want it to be open-source. If your campaign doesn't reach its goal, you're not out that much money, and if it does, then you have 18 months to apply for the actual patent. Meanwhile, if you ignore the whole thing, you could develop something, crowdfund it, manufacture it, deliver it, and think you're doing everything right, and then get sued later by someone who holds a patent that you didn't even know existed.

Dan Williams: That's a good point. I authored a patent, so I've been through that. There are a lot of rules for inventors, pitfalls to be avoided and resources that are available.

Yes, and as far as I know, there are no hooks into any of this in any of the crowdfunding sites. You can post your project, raise money, do the whole thing, and nothing in the interface is going to raise these issues for you. There's nothing that guides you to consider protecting your intellectual property via a patent or trademark or Creative Commons license or anything like that.

You know, there might be an opportunity, if it's not too late, for some kind of crowdfunding panel at the ERA conference in Las Vegas this September. We have two annual conferences: D to C in Vegas in September, that's the big one, and the Great Ideas Summit in Miami in February. At both of them, we run education sessions for direct marketers on a wide range of topics, like how to do Hispanic radio advertising or customer service. In Miami this year, I did a landing page optimization session with four experts that I thought was very good. Just to brainstorm, we might have a competition for crowdfunders, and the winner gets free access to the best marketing minds, all of our education, and the opportunity to meet investors for further funding.

That would be really interesting-- I would love to just get some of the crowdfunding gang over to your conference. Because if you look at the top-funded crowdfunding campaigns, almost all of them have been gadgets that demo well in a video, as in "As Seen On TV."

I've seen a lot of those myself and thought, "I'm gonna see this on TV any day now," but I have not.

If the ERA folks are interested, I would be happy to try to get some of the most relevant people I know in crowdfunding to participate in that. If not this conference, then hopefully the next one. Like, there's this company in San Francisco, CircleUp, that specializes in curated "accredited investor crowdfunding," which is legal now, specifically for consumer product companies with revenues between 1 and 5 million dollars. I think they've mostly handled packaged foods so far, but also some health and beauty, and they'd like to broaden their portfolio. Meanwhile, they have deals to hook up relevant companies they're helping to grow with Procter & Gamble and General Mills. So I think that one of the CircleUp folks, for example, might be interested in what's going on at the ERA conference and also bring a valuable perspective to the people there.

I think the Vegas conference would be an opportunity to get something going, We are planning for that conference now, so we should move quickly.

I didn't realize there was a new FTC chair. Do you approve?

There are people who live in that world, they're consumer protection lawyers, and they might think in those terms. But from a marketer's perspective, I don't see it as approve or disapprove. It's more a matter of what has that person done in the past and what areas do they seem most concerned about, so you can make sure you'll be buttoned up and doing everything right, rather than start showing up on the FTC's radar.

A similar thing is going on with the crowd investing crowd. The SEC has a new chair, and once she was appointed, people started looking at her background and making guesses about how high of a priority she's going to make the JOBS Act rulemaking, against all of the other backlogged things that the SEC needs to do.

I can't imagine that at the FTC or the SEC, there's any one person who knows every nook and cranny. Regulators will always have more expertise in one particular area of their discipline than others. So they focus more on that, because it's what's most important to them, and it's where they're comfortable. So then we try to learn what that is.

Addendum: Since this interview took place, the schedule for the 2013 ERA D2C conference in Las Vegas has come out, and it turns out that there will be a 15-minute presentation on crowdfunding there: "How to Successfully Raise Money Through Crowd-Funding," by Chas Salmore, on September 25 at 10:45am.

Tags: crowdfunding, dan-williams, direct-response, era, infomercials

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The tragic aftermath of a mile-wide tornado that marched through an Oklahoma City suburb this week has been met with yet another outpouring of support and aid in the form of crowdfunded donations.

The past half-year or so has been filled with what seems like an unusual number of tragedies here in the United States, beginning with Hurricane Sandy, and then followed by the senseless acts of violence in Connecticut and Boston, the industrial accident in West, Texas and now this monster storm in Oklahoma.

And after each of these head-shaking events a pattern has emerged. Rather than the star-studded benefit concert on primetime network TV, the public has responded by turning to crowdfunding to express their support, compassion and most of all, to just do something to help.

Related:- Veronica Mars' Record Campaign- Dozens of Indiegogo Campaigns Spring Up in Response to Connecticut School Shooting

But what's most interesting to me about this new positive social habit that seems to be forming around crowdfunding is where it's taking place. The biggest donation-based platforms, Kickstarter and Indiegogo, have become the go-to place for campaigns to raise money for everything from a new Hollywood flick to a charitable campaign for a new Tesla museum. Yet, increasingly, in the wake of disaster, the majority of funds earmarked for recovery are being collected by smaller crowdfunding platforms with far less name recognition.

To be fair, Indiegogo facilitated quite a lot of giving after Hurricane Sandy and Sandy Hook, and Kickstarter typically approves only creative projects.

Yet this week, the site raising millions of dollars in donations for tornado relief is not Indiegogo, it's lesser-known (until now) platform Fundly.

While Fundly does function as a platform in a manner similar to Indiegogo, where various projects can be browsed from a single portal, it also provides a software-based white label crowdfunding solution.

It was this solution that conservative personality Glenn Beck's non-profit, Mercury One, chose to power its fundraising campaign for tornado victims. As of right now, that campaign is 98 percent of the way to its $1.5 million goal, with over a week still left to go.

In this instance, Beck's considerable media presence and following is essentially standing in for both the platform and social media parts of the crowdfunding equation.

When it comes to collecting funds for a good cause, it can seem a little callous to collect a commission. Indiegogo famously waived its fees for Hurricane Sandy relief campaigns, but in recent months fee-free platforms have begun to garner more attention.

One such site is HopeMob, a completely fee-free platform set up to help people and "causes" of all kinds, which also claims to be the only crowdfunding platform to independently verify all the stories of need it hosts.

Today HopeMob, which originally raised funds for itself through Kickstarter, has already raised tens of thousands in tornado relief, despite having just undergone a major re-launch itself a few months ago.

YouCaring.com is another free cause-based platform that's been around for about a year and a half but seems to have popped up out of nowhere just recently to raise funds for individual families in need.

A few other platforms out there that charge fees for fundraising and aren't tied to major celebrities also seem to have risen to the challenge presented by the recent tragedies to become a go-to place for giving when disaster strikes.

Following the Boston Marathon bombings, GoFundMe saw a number of its campaigns for the victims go viral. It didn't take long for over $2 million in donations to come in to various campaigns on the platform. Other generalist crowdfunding sites like Crowdrise and Crowdtilt have also seen an increase in attention since Boston that they're attempting to continue through campaigns aiding tornado victims.

Niche giving platforms like GiveForward, which raises money for medical expenses, are also seeing increased traffic as people search for ways to help, or more likely, hear about them through social media.

It can all seem a bit tacky to point out how crowdfunding platforms have seen a boon to their business in the form of the recent string of tragedies, but that also misses the larger point.

Crowdfunding is slowly changing funding mechanisms across sectors. Pebble showed how the crowd could supplant angels and VCs to get a new product to market. Just recently, Rob Thomas showed that the crowd can similarly alter how movies get made.

Now, these smaller platforms are replacing the celebrity telethon that has followed so many disasters of recent decades, or at least they stand to make them more efficient. Perhaps there will still be benefit concerts in our near future, but sooner or later they'll just direct us to a campaign powered by Fundly or something similar. And if you miss the concert, don't worry, you can expect to find plenty of other ways to help the cause via crowdfunding next time you fire up Facebook.

Tags: crowdfunding, fundly, moore, oklahoma, tornado

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As a preview to my in-depth conversation with author Alan Moore, which has been in the works for some time now, have a look at this recent talk that he gave at the PINC Conference in Amsterdam this month.

Moore describes how things work in a modern world powered by something he often refers to as the "Human OS" and outlines the six key principles for operating in this new world of constant change from his book, "No Straight Lines."

Moore has one of the most clear visions of our crowd-powered future and how it will (continue to) take shape out there at the moment. Have a look:

No Straight Lines: making sense of our non-linear world from Alan Moore on Vimeo.

Tags: alan-moore, crowdfunding, crowdsourcing, human-os, no-straight-lines, pinc

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Editor's Note: Dan Williams serves on the board of directors and chairs the Internet and Emerging Media Council of the Electronic Retailing Association (ERA), the main trade organization for the direct response (DR) industry. ERA member companies spend about 3 billion dollars per year on advertising, mostly television, including both spots ("short-form") and infomercials ("long-form"). Paul Spinrad recently spoke with Dan about crowdfunding and DR. Here's part two of a three-part conversation, beginning with some of the key aspects to what Williams calls the "art and science" of DR. (Read part one here and part three here)

Dan Williams: Claims, for example, require a lot of attention in Direct Response. You need people who can navigate the legalities and evidence pertaining to any claims that you make about what your product can do.

Paul Spinrad, Crowdsourcing.org: So, if you have a claim for a product, there is a recognized authority that vets it?

Related:- Turning Crowdfunded Ideas Into Working Products [Part I]- Turning Crowdfunded Ideas Into Working Products [Part II]- 2013CF Crowdfunding Industry Report

There is, and I can get you more detailed information on that, because it's not my area of expertise, but it is very interesting. The ERA partners with other organizations to do this. There's the Electronic Retailing Self-Regulation Program (ERSP) and NAD, which is part of the Better Business Bureau, and a few other organizations. For how it works, I'm gonna give you a bad example, and I'm not a lawyer, so you need to seek proper legal counsel for real answers on any of this. But let's say Starbucks makes the claim, "We have the richest coffee on the planet." There's a forum where other coffee companies can say, "Prove it," and then the claim has to be demonstrated. The ERA works with marketers to solve issues within the self-regulation infrastructure, so the FTC does not have to get directly involved themselves, and there are no lawsuits.

Or let's say someone says, "9 out of 10 people who use my product found better results than they did using my competitor's product." Obviously they had to get that information somehow. Maybe it's from a study, in which case your competitor can challenge the claim and say, "let's see the study." If you're just starting out as an inventor, that’s valuable information to know.

Yes, definitely! So let's say you're an indie inventor or product developer who's coming from crowdfunding, and you want to get your product out there. What's the process or whom should you approach to have your claims validated? And in your industry, what's type of company and what's the title of someone there where it would be good to knock on their door and say, "I've got this new product I developed, it has social proof, thousands of people have already bought it, and I want to take it to the next level. Are you interested?"

The product development team is always looking for new ideas, and there is absolutely a validation if you can get some crowdfunding; I like the term 'social proof,' some sort of traction, interest level.

I have 10+ years of product background in health and beauty, and at the companies I've worked at, we were approached all the time. The number one question we always had was: Can you make any claims?

To answer the first part of your question, there are professional clinical trial companies that you can go to. With money from crowdfunding and if you have a product that claims it does something, you need to commission a professional clinical study from an unbiased, third-party research company. They will conduct the study however necessary-- like placebo, double-blind-- and then you have a document that says, we did this, here are the results.

How would you find a company like that, and how much would it cost? I know it's a huge range, depending on a lot of factors.

Yes, from tens of thousands of dollars to hundreds of thousands or millions of dollars, depending on the size of the clinical study and how it's conducted. At the low end, you can do one where research subjects simply fill out a questionnaire asking "how does your skin feel?" In a more sophisticated study, they could come in and have photographs taken, or have their skin elasticity measured using lab equipment, for example.

How can you find a company to do this?

You could just Google "clinical study." If you have a weight loss or fitness product that you claim makes people lose weight, obviously you need to substantiate that. But a lot of DR products in the housewares or kitchen categories don't need as much substantiation. If you say "This thing sucks up a lot of water," that doesn't require much substantiation and will probably receive very little scrutiny. And there's probably different levels of scrutiny depending on the medium. Television and the internet have different rules.

You mentioned that the FTC works with the ERA and others to oversee claims. Do you think the FTC would crack down on claims made through crowdfunding? Because it seems like they should be watching.

Again, I'm not a lawyer, but my opinion and my observation is that the FTC probably doesn't have time to look at inventors. It's really when you're spending significant amount of advertising dollars, then you're on their radar. And that's just because of the amount of time that the FTC has. It's up to the inventor, the product development team, to vet all the claims. There's no window at the FTC where you can walk up and say here, this is my claim, and they say, "nope, nope, nope."

 Stay tuned for the final part of our conversation later this week...

Addendum: Since this interview took place, the schedule for the 2013 ERA D2C conference in Las Vegas has come out, and it turns out that there will be a 15-minute presentation on crowdfunding there: "How to Successfully Raise Money Through Crowd-Funding," by Chas Salmore, on September 25 at 10:45am.

Tags: crowdfunding, dan-williams, direct-response, era, infomercials

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Editor's Note: We continue our look at the leading industry research and advisory work that our sister organization massolution is engaged in. For more information on massolution and its industry research, go to crowdsourcing.org/research; for services, visit massolution.com

This week in Canada, the country's venture capital and private equity leaders gather for the annual conference of Canada's Venture Capital and Private Equity Association (CVCA). Interestingly, crowdfunding is on the agenda, as is massolution / crowdsourcing.org founder Carl Esposti.

“The CVCA is the voice of Canada’s growing Venture Capital & Private Equity Industry, and the annual conference provides our industry with a unique networking platform to share opinions and learn from each other’s experiences,” said Lorne Jacobson, Chair of the Conference and Senior Managing Director and Co-Founder of TriWest Capital Partners. “The anticipated attendance speaks to the quality of our speakers and panel discussions.”

Moderators and panelists include senior professionals from Blackstone Capital, Warburg Pincus, ARC Financial, KERN Partners, EnerTech Capital and other leading investment firms; from BCIMC, HarbourVest, Northleaf Capital, ATB Investor Services, BDC, EDC Investments and other global institutional investors; and from TransCanada, Canadian Spirit Resources, MEG Energy, Enbridge, Stem Cell Therapeutics, CML HealthCare and other business enterprises.

Esposti will be part of panel discussion titled "Crowds rush in where Angels and VC's fear to tread" at the conference on Thursday. Among the questions to be addressed: Is Crowdfunding really a threat to traditional Angel and VC seed rounds? Or is it stimulating our economies by unleashing the underdogs, while providing "straight-to-consumer" gateways and customer traction traditional investors ask for?

Moderating will be Chris Arsenault, Managing Partner at iNovia Capital. Other panelists include Stephen Lake, Co-Founder & CEO, Thalmic Labs;  Senia Rapisarda, VP Strategic Initiative, BDC Venture Capital and Boris Wertz, Founding Partner, Version One Ventures and an investor in Indiegogo.

The CVCA conference runs today through Friday in Banff, and we'll bring you updates as we receive them.

 About massolution:

Massolution is a unique research and advisory firm specializing in the crowdsourcing and crowdfunding industries. Massolution works with governments, institutions and enterprises in the design and implementation of crowdsourcing and crowdfunding business models that drive improved business performance, product and service innovation, enhanced levels of customer engagement and in the formation of new sources of capital.

Massolution also operates the industry website Crowdsourcing.org.

You can reach a representative at massolution by emailing contact-at-crowdsourcing.org.

Tags: canada, crowdfunding, cvca, private-equity, venture-capital

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Crowdfunding platforms are evolving from relatively simple funding intermediaries to businesses that offer value-added services in addition to gathering money.

We’ve covered a few such budding platforms in the past: CrowdHut, for example, which helps with marketing and acts as a post-campaign e-commerce platform. CrowdSupply, on the other hand, aids entrepreneurs with product fulfillment.

In June, we’ll see another such platform, called TrepLabs, open to the public. TrepLabs is a project initiated by the mobile app search engine Mimvi and Entrepreneur Magazine; recently, it was announced that white label provider Launcht would oversee the crowdfunding aspect of the platform.

Rather than being a standalone crowdfunding solution, TrepLabs is more of a mobile app incubator, with a crowdfunding portion. (The video below provides a good overview of the services the platform will offer.) Startups will have to apply to the program, and, if selected, will work with TrepLabs for two years.

The idea for TrepLabs came about when its founders realized that one of the big under-the-radar problems in the mobile space was “independent app developers getting priced out of the market they created,” Mimvi’s CRO Eric Rice told Crowdsourcing.org.

“The numbers are very skewed, the industry is dominated on the top level,” Rice elaborated. “The top five or two and a half percent of developers bring in 60 to 70 percent of the revenue.”

TrepLabs’ mission is to help the little guys succeed. In order to be admitted into the program, app developers must go through a vetting process. Rice said the team is looking for developers that can code on their own (so they don’t have to spend time and money outsourcing the actual development of the app) have great ideas, and can work efficiently. Rice said roughly ten percent of developers that have contacted them have fit the criteria.

“Then, we put together a profile, look at it, and vote on who the top four or five are this month,” Rice explained. “For the next 30 to 45 days, we essentially repackage the company and incubate them. We’ll develop a revenue model that fits the audience, so it’s not just paid download. We’ll seek corporate sponsorship, we may take the code and license it, we may outright sell an app. Then, we’ll slowly begin to align their marketing campaign for their TrepLabs launch.”

Rice said apps will get heavy exposure before launching the crowdfunding campaign -- that’s where the partnership with Entrepreneur Magazine comes in handy. Campaigns will carry unique perks that are more substantive than just t-shirts (though those will also be in the mix), which should entice backers to pledge relatively large amounts of money, Rice noted.

The vast majority of apps on TrepLabs will be finished or nearly complete, so there’s virtually no risk of an app getting funded and backers not receiving their reward. Rice said TrepLabs decided to partner with Launcht for the crowdfunding portion both because of the platform’s functionality, and also because of founder Freeman White’s involvement in crowdfunding regulations. (Perhaps there’s an equity crowdfunding component on the horizon?)

TrepLabs itself won’t take an equity stake in the apps it works with; rather, it will share in the future revenue, which aligns the incubator’s incentives squarely with the app’s.

Ultimately, the goal is to give developers the highest chance of succeeding in a competitive field.

“We like to think of the app business in general as Las Vegas,” Rice said. “The developer sits down at the table, puts down his money, and from there, there’s a huge, monster casino that wins all of the time. The only way the little guy can win is by improving his odds, and getting better. So, for the two years that we work with these guys, our mission is to ensure that these entrepreneurs’ odds are improved in every single move that they make.”

Tags: app-development, crowd-funding, crowdfunding, crowdfunding-incubator, launcht, mimvi, treplabs

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With Gawker's campaign over on Indiegogo right now to raise funds to purchase a video of Toronto Mayor  Rob Ford smoking crack, rewards-based crowdfunding is currently having its Skokie vs. the neo-Nazis moment.

For those of you that aren't First Amendment lawyers, the case of the National Socialist Party of America, a neo-Nazi group, vs. the Village of Skokie, Illinois was decided by the U.S. Supreme Court in 1977. The court held that the racist group's right to march through a predominately Jewish neighborhood (which was also home to at least one holocaust survivor) with swastikas on full display was protected by the first amendment.

Related:- 2013CF Crowdfunding Industry Report- The Attack on Kickstarter and New Crowdfunding Rules

The point is that the court has found time and again that the protections of the First Amendment are quite broad, and must be applied equally, even to groups and speech that the vast majority of Americans find abhorrent. This is why we all know about the Westboro Baptist Church today.

In the crowdfunding world thus far, which is made up almost entirely of privately-held platforms, Indiegogo has been the one major platform that has opted to operate in the spirit of our First Amendment (and also in the spirit of laissez faire economics) with an "anything goes" attitude. There are, of course, some limitations to what can be crowdfunded on Indiegogo -- neo-Nazi groups actually couldn't use the site for anything that promotes hate, for example -- but for the most part It has been far more permissive than the other widely recognized platform, Kickstarter.

So far, it's seemed to me that Kickstarter's curated approach and Indiegogo's policy of openness have complemented each other nicely and helped grow the industry by offering a (potentially) high profile home for projects of all types. If Kickstarter feels too much like the cool kids' playground, you can always take your project to Indiegogo, and if Indiegogo seems a little too all over the place, you can refine your campaign to be a better fit for Kickstarter. We have our crowdfunding Ying and Yang, and all is well.

At least it was, until Gawker decided to thrust this monstrosity of a campaign into our happy little world via Indiegogo.

No stranger to sensationalism and questionable methods of acquiring a scoop, Nick Denton's flagship gossip blog is looking to crowdfund $200,000 to pay Somali drug dealers for a video of embattled Toronto mayor Rob Ford smoking crack cocaine and slurring (in more ways than one) the names of his political adversaries.

A Gawker editor and two Toronto Star reporters have seen the video in person, but its owners say they require the six-figure amount to hand it over for publication, claiming to want the money to move out to Calgary and start a new life.

Right...

No matter how you spin it, Gawker's Indiegogo campaign is asking for money from the public to give to crack dealers and further humiliate a Canadian politician (who clearly seems to have a problem).

Indiegogo's Terms of Service do prohibit using the platform to pay drug dealers for drugs, but it's apparently fine to pay drug dealers for video footage.

And perhaps it should be. Like the protections that America's First Amendment provides for everyone, even hate-mongers like neo-Nazis and the Westboro Baptist Church, maybe the crowdfunding world needs a platform like Indiegogo that can be a go-to venue for even the most base campaigns, like Gawker's Crackstarter.

But I sure as hell don't plan to contribute.

 - Eric Mack is Managing Editor for Crowdsourcing.org.  He has covered business, technology and politics for more than a decade for major outlets including CNET, CBS, AOL, NPR, Wired, and the New York Times.  You can contact him at eric.mack@crowdsourcing.org. Find him on Twitter and Google+. Also be sure to follow Crowdsourcing.org on Twitter and join our Crowdsourcing community on Google+.

Tags: crowdfunding, gawker, indiegogo, rob-ford, smoking-crack, toronto

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Crowdsourced design platforms like 99designs, crowdSPRING, and DesignCrowd have attracted hundreds of thousands of creatives and paid out millions of dollars in prize money.

With 125 designs submitted per contest, competition on 99designs is tough, and many users can spend hours creating concepts that go nowhere. Indeed, the speculative nature of the work has attracted ire from some groups, though crowdsourcing advocates respond that the opportunities created on these platforms help build up users’ portfolios and can help designers generate income on the side.

In order to educate its users on how to have the best chance of winning a contest, 99designs created an infographic highlighting a successful transaction between designer DSKY and customer After Eleven.

Related:- Carving Out a Creative Crowdsourcing Niche- DesignCrowd Moves into Asia, Eyes Further Expansion- Creative Crowdsourcing Firm 99designs Expands into Latin America, Spain

One of the most important takeaways from the infographic is the number of iterations that took place throughout the course of the contest. DSKY and After Eleven went through four concepts before settling on the winning design. Given that there is no face-to-face interaction between the designer and the customer, listening to feedback is essential for creating a winning pitch. 

Tags: 99desgns, afterelevenfr, crowd-sourcing, crowdsourcing, design

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Crowdsourcing Week in Singapore is just around the corner next month, and we're continuing to preview the world's first major week-long crowdsourcing event.

We've already heard from one of the presenters at Crowdsourcing Week, Shelley Kuipers, founder of Chaordix, and below we're featuring a special video from José María Figueres, President of the Carbon War Room. Figueres hails the power of crowdsourcing and the potential for Crowdsourcing Week to become a key summit for those of us who live and breathe all things crowd.

Tags: carbon-war-room, crowdsourcing, crowdsourcing-week, video

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Genius Crowds, a co-creation company founded in 2010, shuttered its doors last week, bringing an end to the crowdsourcing experiment.

“Today we are announcing that, after a few incredibly creative years, we’ve decided to close Genius Crowds, effective immediately,” the company wrote in an email to its members, which is now posted on its website. “We continue to believe in customer co-creation and collaboration, and are proud to have helped bring an early crowdsourcing product development model to the industry.”

Related:- Mattel Turns to Open Innovation, Pairs with Genius Crowds

Genius Crowds catered to individuals who had ideas they wanted to bring to market. The process involved multiple steps, as the community voted and provided feedback on the submissions. The platform, developed by Chaordix, ran monthly competitions around certain themes and also managed contests for its partner companies. (We covered the platform’s partnership with Mattel here.) Genius Crowds CEO and cofounder CJ Kettler said the company had developed “ten to twenty” such relationships.

On February 12th, the Genius Crowds team posted a blog entry titled “Hiatus,” announcing that monthly competitions were coming to a halt while the company was reevaluating its business model.

“When we went on hiatus, I was exploring a lot of partnerships to see if we could find the right potential partner who would engage with our community of five thousand folks, and we just didn’t find [that partner] within the timetable that I had given it,” Kettler told Crowdsourcing.org. “I’m happy to still engage in those conversations, but personally, I was at a point where I wanted to move on.

“In a lot of ways, for me, Genius Crowds needed to be part of a larger entity,” she continued. “As a small startup, we frankly didn’t have enough resources to do the job of business development that we wanted to be able to do.”

Kettler said the kinds of organizations she was considering were market research firms, crowdfunding platforms, and “other players in the crowdsourcing world.”

The blog post announcing the hiatus indicated that the reason for the break was that “…the time to market is long and sometimes arduous, especially for the large corporations we wanted to work with.”

Kettler elaborated to say that she was happy with the way ideas came in and were evaluated; she also said that using gift cards as an incentive for users to participate was the right approach and helped to foster a close and vocal community on the platform. But the users' expectations may have been inflated.

“When you’re dealing with large companies, the expectation of the community is that they will see their products on the shelves [soon] after. And that’s just not realistic, frankly, when you’re dealing with large corporations,” she admitted. “That was probably the most important lesson learned. It takes too long to get answers and for things to move to development. Really, the model should be about ideas and participation, and less about creating a hard, physical product.”

One product that did emerge from the community’s pool of ideas and made it onto the shelves was the Speed Bather, a pet grooming tool.

“Frankly, it was one of few products that we can say moved to market,” Kettler said.

Despite the platform’s closing, Kettler said she is still “very bullish” on the concepts of crowdsourcing and co-creation, and indicated that she will listen to offers from potential partner companies, if any of them approach her. She also thanked her community of more than five thousand members for their participation, lively discussions, and great ideas.

“One of the things I’m most proud of was the level of commitment and also the level of solidarity as a community, which is one of the hardest things to build,” she said.

Tags: cj-kettler, co-creation, crowd-sourcing, crowdsourcing, genius-crowds, speed-bather

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