Crowdsourcing and the sharing economy are driving a huge amount of change and disruption in business at the moment.
Uber and Airbnb are two of the most obvious examples, growing into billion dollar companies on the back of the crowd.
To find out more about how crowdsourcing is going to develop over the next few years, I spoke to Epi Ludvik Nekaj.
Epi is the founder and CEO of Crowdsourcing Week, a global conference on collaborative business practices that takes place this week in Singapore.
What are the major trends in crowdsourcing at the moment? How are they developing?
We see crowds and networks being tapped into for wide ranging applications from healthcare to aerospace research.
Some of the major trends we are seeing in crowdsourcing are occurring at the intersection of crowdsourced data and Internet of Things, like IBM and Continental AG’s collaboration on the “Connected eHorizon” project for road safety and connected cars; T-Mobile in US is also tapping crowdsourced data where the company leverages gathered information from customers to detect which areas have the strongest network coverage.
Crowdsourced delivery and on-demand services will see a big uptake in the near future, retailers like Walmart are thinking along the lines of turning their customers into crowd shippers; and Uber has piloted an experiment in LA turning drivers as crowd shippers as well.
Epi Ludvik Nekaj
There are also open business models that corporations are starting to adopt; we seek the social productivity mindset as a new generation of workforce, which is starting to emerge where work isn’t about a place we go to, but a thing we do (e.g. contractors in Freelancer, Elance, etc.).
There’s also the growth and acceleration of equity-based crowdfunding now that the SEC’s new ruling with JOBS Acts would allow non-accredited investors to participate in private investing and fundraising.
In Singapore, the Monetary Authority released a consultation paper that outlines the proposals for security-based crowdfunding.
The UK is also making it easier for startups and SMEs to access finances through the Small Business, Employment & Enterprise (SBEE) with the government’s support and taking actions to make this model beneficial for everyone.
And as we constantly educate policymakers and decision-makers, there’s so much in store in the future of crowdfunding in other parts of the world, not just in the US and UK. Asia is a big market, too.
How do you see the crowdsourcing economy developing over the next five years?
We are living in very exciting times. Everything is happening so fast because technology is harnessing the minds of the crowds – to innovate and generate new ideas for businesses, government, and social enterprises.
Crowdsourcing will generate meaningful and valuable experiences for customers and the community.
Importantly, I see more open business models will spring forth, and big corporations would have to take a look on the potential of crowdsourcing to their incumbent business models.
Either they embrace crowdsourcing or if they don’t there’s a huge chance of getting disrupted by it.
A lot of things of interesting things will happen over the next five years as the next billion people become more aware and get digitally connected.
What are the biggest hurdles that have to be overcome before it can be a success?
Crowdsourcing is already a success. We are seeing applications that would have never been possible without networked crowds.
The sharing economy for instance is a $15bn force to reckon with in 2015. Of course there are hurdles to wider adoption.
Some of the big issues are cultural, political and socio-economic aspects because we are capturing a global audience.
There is also the cultural gap on how we should deal things from a western and eastern point of view.
For example, in crowdfunding, we know how popular it is in the US, but in the east, the cultural and socio-economic diversities are inherent challenges for crowdfunding to take off smoothly, and there’s a need to localize the process on how crowdfunding should be to fit the audience.
And it may take more time for emerging countries to finally realize its potential not just to focus on money matters, but to facilitate in creating open and people-powered business models to democratize traditional financial systems like how Transpay, Bitcoin, and other crowd finance platforms doing it.
Is it inevitable that disruptive crowdsourcing companies (e.g. Uber) will attract negative publicity? How can they prepare for and react to this?
There will always be challenges and negative publicity because we are living in a transparent world right now where social media channels become the medium of communication between the company and customer and the entire world is watching.
But believe me this is important and this relevant for all organizations, not just crowd companies, because it helps them stay on their toes.
For example, a traumatic experience on Uber and then just a tweet or status on Facebook by the customer has a huge impact.
And I think the best way for companies to deal with this is to become open and transparent while making the necessary amendments to protect the end-consumer, the on-demand independent contractors or sellers of their products and services.
People want to see problems acknowledged, not shoved under the carpet.
And that’s what makes these crowdsourcing communities wonderful – companies are being pushed to be sensitive when it comes to transparency and social reputation.
Which are the companies that are yet to make the headlines but that you think have the most potential?
I think we are going to see big leaps in crowd finance very soon here.
Peer-to-peer lending platforms like MoolahSense will soon supplement banks in a big way.
With a remote, uncollared economy, crowd payments will soon require disruption and companies like Transpay are making it easy for crowd workers and freelancers around the world get paid easily and more efficiently.
How can more traditional industries, such as banking, embrace the sharing economy?
First, they should be open to learning more about the crowd economy, its implications to the incumbent system and how it would affect the current policies.
In the UK, for example, the Small Business, Employment & Enterprise (SBEE) has just made it easier for startups and SMEs to get financial support if their loan application at the banks is rejected.
With the new law, ten major banks (e.g. Barclays, RBS, HSBC and among others) are required to pass on the information of the rejected applicants (with their permissions of course) to online P2P platforms to help them find other alternatives to acquire funds.
This one mitigates the red tape and also promotes transparency for those who want to start a business.
Banks need to turn to focusing on the customer and bring in human centric innovation to their interactions and models. And this is applicable to most verticals.
I’ve heard you mention the ‘internet of productivity’. What do you mean by this and why is it important for the sharing economy?
Internet of productivity is when you utilize all these technology resources – social media, web 2.0 applications or even analogue communications – to get things done efficiently and effectively at work.
You can do many things on the internet and social media, you tweet, you like and you share. But what is the end result of social media? How can we give social media a little edge to live on longer and be more productive?
Social shares are not the currency we should focus on when it comes to achieving real traction and impact. When done right, these are just bonuses that come out of a much deeper interaction.
How can brands, organizations, social enterprises, governments and non-profits achieve this deeper interaction and turn it into something more meaningful or productive?
There are many ideas and movements that aim to get communities to act and put social media into a bigger and much better context: the sharing economy, access economy, collaborative consumption, co-creation, collaboration, open innovation amongst others.
To me, all of them simply say crowdsourcing.
Technology is fuelling disruptive business models. Companies and enterprises can engage with their customers on a completely new level – motivating the crowd to achieve great things and solve big problems.
And for the first time all the social media interactions, that we have grown to become familiar with, is turning into – social or internet productivity.