Introducing Enterprise Crowdfunding for Established Companies
How you can use the power of Kickstarter-style crowdfunding inside your organization with your own employees
Crowdfunding, the practice of financing a project by sourcing small investments from a large number of people, has exploded in the past decade as an alternative funding source. Crowdfunding is a particularly effective tool for entrepreneurs who can test ideas in an active marketplace at the forefront of the product lifecycle. They’re able to gauge audience response, and then refine, terminate, or launch their product or idea based on people’s engagement and funding. This saves both time and money, and gets them immediate market feedback.
Currently, most businesses deploy surveys and market research projects, or worse, rely on blatant assumptions or gut feelings to make decisions. However, some established companies are beginning to adopt crowdfunding as a technique to receive the same early-warning signals that are valuable to entrepreneurs (i.e., What products or features should we make, is there demand, and who will pay for them?).
By interacting directly with their consumers, businesses are able to eliminate a lot of the guesswork and develop products the market wants in a more efficient way. While gaining external indicators about their business is a big step forward to staying competitive in a changing business landscape, rarely do companies employ similar methods to gain insight into a broader range of business decisions using the best source of wisdom they have - their employees. But with Cultivate Ignite, our internal crowdsourcing platform, now they can.
External Enterprise Crowdfunding: A Better form of Consumer Feedback
External enterprise crowdfunding allows established businesses to source ideas, feedback, and industry trends from audiences external to the organizations, i.e., your consumers, business partners, and the public. Companies can source ideas, funding, and even creative talent from consumers to develop new products. Using external enterprise crowdfunding, brands can build awareness and engagement with current audiences or tap into new ones.
GE Appliances launched FirstBuild, a co-creation community where people can work alongside GE designers to build crowdfunded projects, or use the physical “microfactory” space to build their own projects! Hasbro has run crowdfunding challenges using its Gaming Lab to source game ideas from the general public and bring them to life. Newcastle also ingeniously crowdsourced their Band of Brands SuperBowl ad, getting 38 other brands to chip in for a chance to share the expense of an extremely expensive ad spot.
While these companies leveraged the powerful intelligence of their consumers, they may still be missing key innovations by not fully engaging the people who know their products and services best - their employees. That’s where internal enterprise crowdfunding adds value to businesses.
Internal Enterprise Crowdfunding: Use the Power of Your Team
Internal enterprise crowdfunding engages employees within organizations to leverage their talents and experience to uncover the insights and ideas pulsing through an organization. We built Ignite to meet the needs of clients looking to disrupt traditional organizational structures to find, fund, and execute the best ideas developed by their people.
Like other forms of crowdfunding, participants of internal enterprise crowdfunding can both pitch and invest in ideas, but instead of using personal money, employees use a portion of allocated company budget. Employees invest in the ideas they think would be most valuable to the business on a promise by the company that fully funded ideas become real projects. Participants are incentivized by the opportunity to participate in the ideation, funding, and development of projects that interest them.
Companies who use internal crowdfunding gain critical, early-stage feedback and insights from their people so they can accelerate the development of effective solutions and reduce expenses on ideas that don’t work. Most importantly, by engaging employees at all levels in the organization in how funding decisions are made and how they spend their time working on projects, leaders see a positive shift in company culture. When organizations create opportunities for collaboration, communication, and ideation, employees become more engaged, fear of failure is mitigated, and organizations achieve desirable results quicker.
Companies Using Internal Enterprise Crowdfunding: It Could be You
Just as GE discovered innovation shouldn’t take place behind closed doors, progressive leaders have discovered that project and funding decisions shouldn’t be conducted in isolated C-suite meetings. IBM built its own internal crowdfunding platform, iFundIT, but many organizations looking for similar solutions can’t or don’t want to build and maintain their own crowdfunding platform.
Ignite empowers organizations of all sizes to use internal crowdfunding within their organizations to build the best ideas from the inside out. Interested in what internal crowdfunding can do for your business?
Try Cultivate Ignite, with a commitment-free, two-week trial, or view available packages starting to see what ideas lie undiscovered in your business.
You might also like: Brainstorming doesn’t work. To cultivate better ideas, crowdfund instead.