Chatroulette might not be for everyone, but the randomly generated video chat site's runaway success is a developer's dream. Created by a 17-year old in three days, the site's user base has doubled every day since its inception.

The concept of getting users to grow a business was a popular topic at the BRITE conference on Wednesday. As Bill Joy, the co-founder of Sun Microsystems once put it:

"No matter who you are, most of the smartest people work for someone else."

At Columbia University, many speakers agreed — the role of the consumer has changed. And increasingly, businesses that succeed today rely on their users to create and improve products. But most businesses would kill to be in the position of Chatroulette's founder Andrey Ternovskiy, who told The New York Times recently:

"It continues to multiply and I just couldn't stop it from growing."

But that's not a situation that's easy to recreate. Robin Chase, CEO of Meadow Networks and the founder of ZipCar, knows a little bit about excess and scarcity. ZipCar often rent cars down to the second. (This I know from the experience of throwing a set of keys at someone semi-patiently waiting to take off in a car as I returned it.) As Chase says:

"We have this feeling of scarcity, but I think we're looking at things wrong. We should be saying 'How much do we really need? Let's make sure the rest is available for others to use.'"

That concept is a big part of how businesses from Skype to ZipCar work today. Similarly, a network like CouchSurfing helps people fix the inefficiencies of travel (if you let a stranger stay in your apartment when he or she is in your city, another stranger will return the favor while you're traveling). 

As a result of this mutually beneficial transaction, CouchSurfing now has more available beds than InterContinental, the biggest hotel chain in the world.

Chase says that entrepreneurs can recreate business models like this by following two main guidelines:

"Identify other people's excess capacity and create a platform that makes use of it."

That is one way that companies can benefit from the fact that "the smartest people" are always somewhere else. Says Chase:

"We don't all have good ideas. Some people will have innovative ideas and you have to pluck them."

The problem of course, is convincing individuals to expend the effort to solve your corporation's problems. Easily, crowd sourced projects can benefit a corporation at the expense of those contributing. And once a power imbalance like that exists, it's hard to entice the crowd into helping.

John Gerzema, chief insights officer at Young and Rubicam, says that one key is using a "hat trick business model," that is good for business, good for the customer and good for social progress:

"I don't think crowdsourcing works when the scales are tipped in favor of one individual. You need to have completely democratic principles."

Open source 3D printing company Makerbot is one business that succeeds in doing that. The company wants to change the way that people think about making and acquiring goods (Makerbot owners create their own plastic goods for pennies on the dollar). The company's incredibly active userbase often helps solve problems that the company runs into, even improving the core Markebot product.

Makerbot founder Bre Pettis says that "With open source...when one person solves a problem, everyone benefits."

Getting consumers to share and improve your products worldwide is a lot easier said than done, but many of the speakers today at the BRITE Conference were agreed that paying it forward is a good way to get started. Said Gerzema:

"It's about generosity as a business model, and the idea that your generosity will come back to you."

Meghan Keane

Published 31 March, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Comments (3)

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Patrick

Most companies have innovation as one of their top priorities. But many face challenges in innovation management – be it ability to co-create with customers, or utilizing employee talent. With social media bringing communities together, companies can now address this challenge. I've just written a blog post on the subject: Co-Creation is more than just a philosophy! http://bit.ly/cVNTDx

over 8 years ago

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Russ

Great post Meghan!  I particularly identify with the quote: "Identify other people's excess capacity and create a platform that makes use of it."  This is the foundation of a business idea with legs.  Of course, execution is perhaps the most important determinant of business success and execution is informed by passion for your idea or cause.  Couchsurfing is a great example of how a startup with scant resources can crowdsource and lean on their users for not only word of mouth advertising, but also development.  The actual programming and design of Couchsurfing is performed by their users, and some full timers based in the Bay Area. 

With respect to excess living space capacity in the homes of people around the world, my startup, Sherpa Travel Exchange, intends to help homeowners monetize their unused living space in a safe and secure online marketplace.  We are utilizing many of the best practices and the ideology proposed in this post as the basis of our business model and ethos. Again, great post Meghan!

Russ

over 8 years ago

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Dario

As you commented, getting users to grow a business is not a situation that's easy to recreat.  I´m trying to get users to move my website, but is not easy, even knowing that everything is free, an altruistic website to help others.

http://www.givingetting.com allow people to give and get stuff they no longer need or to get what they need and don´t have, donating or getting it for reuse, achieving longer product cycle and also keeping useful stuff out of landfills.

The more people we gather and show them the website, more things are going to be given free and gotten free. So please help my to promote this website. Go to http://www.givingetting.com/Content/?id=3 and learn how does GIVINGETTING work.

over 8 years ago

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