Crowdfunding: Not Just for Solo Dreamers?
Crowdfunding platforms like Kickstarter and Indiegogo are the natural home of those with more dreams than resources -- bold inventors, penniless artists and would-be entrepreneurs with radical business plans. But according to a recent HBR interview, they may actually offer businesses a way to recapture some of this trailblazing energy as well.
In the post Walter Frick interviews Michael Muller, one of the authors of an internal IBM academic paper about its experiments with crowdfunding. Rather than using its platforms to fundraise, IBM is essentially letting employees vote for each other’s best ideas with the corporate equivalent of Monopoly money, spurring creativity with a bit of healthy competition and surfacing innovative solutions that might have got lost in the organizational welter. Muller explains the details:
We don’t have people use their own money An executive allocates a budget to the participants in the experiment. In our first case, a vice president in research allocated $100 to each of the 500 people in his organization. There was a website that was inspired by Internet crowdfunding websites, where members of the organization could propose projects, and members of the organization could take their $100 and spend it on each others’ projects. The trial lasted about a month and the funds where available on a use-it-or-lose-it basis, meaning you could only spend it on somebody else, not on yourself. And at the end of the trial, if you didn’t spend the money you didn’t get to keep it.
What sort of proposals won the battle for internal funds? Everything from ‘afternoon beverage’ to some in-house, shared athletic equipment and a streamlined way to pay for small outsourced tasks. The pilot also revealed that participation was high -- 45 percent of employees engaged as compared to the 10 percent that use the company’s social media platform regularly -- and projects proposed by those lower down the institutional food chain were most likely to get funded.
The post closes with some advice for other businesses thinking of trying similar experiments. "It’s important for the sponsor to say what kind of innovation he or she wants to see, and what is out of bounds. Also, organizations should actively campaign to get everybody involved, otherwise money doesn’t get spent," says Muller.
All of which is fine and dandy but if your business has tens of employees rather than thousands, could something similar work for you?
Perhaps not in the form IBM utilized, but the underlying idea of engaging employees by giving them a sense of control over how a small portion of the budget is spent, has worked in various guises for business of all sizes. Startup Coffee & Power essential crowdsourcing bonus allocation to reportedly good effect, while recent research shows that so-called "prosocial incentives" -- essentially giving employees money to give away to others -- increased team bonding and employee happiness.
Could you put the principle of crowdfunding to work in some way at your business?