Customer interaction as a source of innovation for start-ups
Most start-ups manage outplay more established players when it gets down to innovate. They think differently, challenge the traditional vision of business and are inclined to take risk. But how come that firms like Windows, that benefits from a huge market power, considerable financial means and count some of the brightest minds among their employees, fail to duplicate their method to innovate?
Part of the answer is to be found in the goals and the strategy of these firms. Their research of growth and profits is not always compatible with innovation (Volberda, 2011). But another part of the answer is to be found in the way they deal with customers. In this post, we will discuss whether start-ups are better equipped to turn benefits from customer interactions into innovation.
Ah, it’s almost summer! If you’re anything like me, you’ve been waiting for this, enduring the cold and windy climate of the Dutch fall and winter. Moreover, you’d probably want to spend your free time away from home with some recreational activities, but what to do if you’re low on cash? Well, if you’ve got a good virtual poker face, you can always bid on some nice activities at Vakantieveilingen.nl.
Part of Emesa Nederland BV., Vakantieveilingen has been offering low prices on everything away-from-home related, ranging from days out on the town to entire holidays abroad since 2007. How does it work? Well, for consumers it works by simply starting to bid on the deal that you like best and if your bid is the highest made when the auction closes, you win the activity for that price. Consequently, you have a lot of power over how much you want to pay for certain products, but you also have to be careful to you’re not overbid at the end, when many people try to get the deal for as little as possible. Part of its appeal, are the easy sign-up system, which doesn’t require you to first create a profile until you’ve actually won an auction. Continue reading Vakantieveilingen→
The Dutch initiative Dream or Donate is an online platform that allows individuals to realize their dreams or ideas by crowdfunding. It brings together two groups of people; namely the dreamers who want to share an idea and the donors who can give money for its realization. In that sense, Dream or Donate can be considered as a two-sided network. It this case, one group of users is entirely subsidized whereas the other group of users can be considered the ‘money side’.  The difference here with two-sided networks as described by Eisenmann, Parker, and Van Alstyne (2006) is that there is no tangible advantage for the donors to attract large groups of dreamers. It might be that donors experience glory from their donations, since the dreamers will get a notification of their donation. It works as follows: Continue reading Dream or Donate→
Imagine this. You are hosting a dinner party for all your friends and you have decided to cook the meal yourself. Since you have invited many people, you need the appropriate cooking gear to make this party a success. However, in case you are a student like me, it is not very likely that you own a cooking pan large enough to cook tomato soup for 20 people. The stores are closed, your parents are out of town, and none of your friends own a pan of the dimensions your feast requires.
Peerby.com offers a solution for people with exactly these kinds of problems. They established an alternative to the prevailing consumption patterns in which people use goods after which it is stored or thrown away by developing a platform on which people can request to borrow things from their neighbors. In this way Peerby hopes to realize objectives such as “connecting people with each other and encouraging collaborative consumption.” [i] In essence, collaborative consumption allows individuals to become active members of society and increase their social network.[ii] Peerby does this by offering a platform that introduces a new value-creating system, allowing customers to govern the flow of goods in their own consumption context. [iii]
A question remaining is why people are committed to the online community that Peerby creates. Previous literature on organizational commitment has shown that people can develop a connection to an online community that is based on obligation, affect, and/or need. Continue reading Peerby→
Geo-location based pictures of any incivilities or disorders noticed in public areas
BetterStreet is a mobile application available on App Store and Google Play and takes also the form of a service online. Launched in 2013 as result of a small start up competition in Belgium, the service enables any citizen with a smartphone to take a geo-location based picture of any incivilities or disorders noticed in public areas, and to communicate it to the responsible municipality of the region. The picture can also be complemented with a brief comment of the issues to be solved by public authorities. The objective is not simply about creating a platform where people can complain and criticize the authorities. The approach is much more constructive and allows the citizen to follow the progress of their notifications, get informed when the problem is solved, and even reward municipalities for their good job! The company assures the maintenance and the development of the platform and propose integrated services of data management and processing to municipalities for annual subscription fee around 5000 euro, depending on the number of citizens living in the municipalities.
In practice, this Cloud service is very user-friendly and directly proposes three basic options at the opening of the app: Continue reading BetterStreet→
Two years ago, Homejoy.com was established as a platform that connect cleaners and clients who needs their house be clean but have not time to do so. After two years, now Homejoy expands to more than 30 cities in United States and launched its European headquarter in London this year. How kind of innovation or business model that enabling all this happen? According to Homejoy, the website is less about selling things (cleaning service), but more about backend technology. Continue reading Homejoy→
As Anoniem Anno Nu is centered on art, I envisioned bringing the theme back in the blog posts I wrote about the website. With the assignment being three blogposts, I came up with the idea of a tryptich – a (often Christian themed) three-panel piece with the mid-section being the most important and the side-panels playing a supportive role. In this case, value co-creation and collective intelligence taking the main stage, while pricing strategies and interface design played the respective roles of deutera- and tritagonist. So, in line with the theme of art, it seemed self-evident to discuss the importance of aesthetics and design as the cornerstones of a website experience.
Research done by Hartman et al. (2010) have identified the value of quality website aesthetics and design in enhancing usability. Put differently, if a website has a pleasing aesthetic with an emphasis on visual design, it is more likely to be found easy to navigate through and, hence, users will be more likely to stay longer on the page and come back to it more often. This is seemingly good news for AAN as its website interface is visual, clear and playful.
We live in a time when discoveries in science and technology are happening rapidly, making it difficult to always stay informed. The full potential of these changes are continuously evolving, with digital technologies and connectivity transforming the world around us.
The media, entertainment and information industry have long played a role in informing, educating and entertaining consumers. Recently, new technologies and changes in consumption habits have influenced how the industry creates and transforms content into profit. However, the business community is concerned that the demand for innovators is greater than supply. According to one research in the US, the number of students entering college is significantly lower than the number of exits, leading to a loss of skilled workers.
The pace at which the trends are evolving requires including additional skills in the college programs in order to prepare students for the ambience they will enter upon graduation.
Industry leaders have identified 15 trends that will shape the future of Information Technology, with mobility, personalization, ‘Internet of things’ and security being the biggest trends in 2013. Some of the trends that will emerge in the coming years are visualization management, robotics and artificial intelligence (intelligence of machines and robots).
The platform uses the Bittorrent protocol, which has been created by Bram Cohen in April 2001 (Wikipedia, 2014).
The figure 1 provides a brief example of how it works: each shared file is divided in small elements that are downloadable by using a torrent client (each colored dot in figure 1 represents an element of the file). First, the big server is the only one that has the file; the big server is the only “seed” and the people that download elements are the “peers” (pic 1). Then people that downloaded some elements become “seeds” for these downloaded elements (pic 2) and they are also still “peers” (they still download from the big server (pic 3)). And so on until all the “peers” downloaded all the elements of the file they wanted (pic 8). Thus there is not only one source for a specific file, but instead all downloaders become a source, which allows a faster download than if there is only one unique provider. Continue reading The BitTorrent protocol→
When thinking about YouTube and what the biggest channel in terms of subscribers is, you would probably be inclined to say that it would probably belong to either a very popular celebrity or large corporation. Miley Cyrus, Armin van Buuren, or Apple perhaps? However, would you be surprised to find out that it belongs to a 24-year old guy who reviews videogames for a living? Introducing Felix Kjellberg, or as he’s better known in the Youtube community: PewDiePie.
We’ve covered product reviewers before in the course who used Youtube as a medium and this particular phenomenon can also be fitted in this category. Let’s Players (or LP-ers for short) like PewDiePie create movies of themselves while playing games, usually while filming themselves and showing this in a corner of the video to capture their reactions as they play. During this time, they will provide their in-game commentary or talk about anything to fill the time, frequently accompanied by silly behaviour. But whether you love their (for the most part) exaggerated style or not, the figures speak for themselves: PewDiePie for example, currently has nearly 27 million subscribers and around 3.5 billion video views. Last year, it was estimated that he makes around 300.000 euros per month. Continue reading YouTube as a videogame hub→
Too busy to do everything by yourself? Work-zilla will do it for you!
In the final year of my Bachelor, I had a class in Monetary Economics. The teacher for that class was a graduate from our faculty who just returned after his master program in South Korea. After one of the classes, he told us about his and his friend’s startup. It is an Internet platform in Russian that is called Work-zilla, where people can perform quite easy tasks for others for a little amount of money. At that time, I did not see big potential in that business but within two years, Work-zilla had 60,000 dollars turnover and about 100,000 users.
There two types of users of the platform: 1) clients who publish tasks and 2) performers who complete tasks. When clients create tasks, they should mention the type of task, and give a short description, including a deadline and a price. In two minutes, a client receives some candidates to do the task. Continue reading Work-zilla→
How customers influence website design without knowing it
Frustrated how your favorite websites keep changing their designs? Obviously you can’t be the only one complaining about this, right? There must be a reason for it, but why? Now it turns out you (yes, YOU!) might be the actual reason for these changes!
Even before the beginning of the Internet, marketers used eye tracking to find out what people were watching when viewing an advertisement. A well known example of this it the advertisements below, for Sunsilk. It shows that even the smallest details like the direction of the eyes influences the attention that is paid to the product itself.
Advertisment for Sunsilk. The overlay shows where viewers were watching, red being the most watched areas.
Nowadays, this type of data is of immense value to website designers. Basically, three types of data on visitor’s behavior can be distinguished. Generally, the more informative these are, the harder or more expensive they are to obtain:
One way of using this visitor data is so-called A/B testing, where two different designs of the same website are uploaded, and visitors are assigned randomly to one of the two. Visitor data will then not only provide usable data on which of the versions sells the most products, for instance, but also how long visitors stayed at one page, which pages were the most popular, which links were clicked the most and how visitors find their way through the pages. Continue reading Heatmapping→
Cryptocurrency might be the one example where co-creating meets value creation in the most efficient sense possible, without additional transactions co-creation is turned directly into money. More specifically co-creation means creating money when it comes to cryptocurrencies such as the Bitcoin…
What is cryptocurency and how does it work?
Cryptocurrency is a form of digital currency. Nowadays many different types exist of which the Bitcoin is probably the most well known variety. Other popular cryptocurrencies are the Ripple, Litecoin, Peercoin, and Dogecoin. All these currencies have their origin in the 2008 paper by Satoshi Nakamoto. Satoshi Nakamoto is a bit of a myth himself and all sorts of rumors revolve around this person or group. A Bitcoin can be seen as a chain of signatures that are recorded from transaction to transaction. Transactions are recorded digitally in a public ledger. The currency is also decentralized, meaning that the transactions are not checked by one entity but many entities at the same time, and really the network holds ownership of the Bitcoin technology. The payments take place in a peer-to-peer system thereby getting rid of intermediaries such as banks or credit card companies. Requiring a lower fee for the transactions. Furthermore the currency can be anonymous in the sense that, if someone wants to go through a bit of hassle, nobody can see who is behind a certain “digital wallet”. The main advantage is that Bitcoins are easy to trade and a fee for the transaction is only optional (if you want to jump ahead of the cue). The main downside however is the high volatility with the price of the Bitcoin rising steeply around December 2013, to drop almost as steeply as well soon afterwards.
Looking backwards, the late ‘90s had quite some powerful stuff for kids: embarrassing boybands (and girlbands), videogames on floppy disks, the first Playstation, Oasis, Blink 182, Yo-Yo, and much more. In particular, in those days, Italian kids were in love with a brand new product: the Winner Taco. Winner Taco was an ice cream produced by Algida (which is how in Italy we call the Unilever brand “Ola”), and there was nothing nearly as cool when it was launched in 1998. Nor as delicious. Then a few years later, in 2001, Winner Taco disappeared from our cafes and supermarkets. End of the story? Not this time. Some 10 years later, those kids have grown into the first generation of social network users. And one day, a group appears on Facebook: “Bring back the Winner Taco.”
The group quickly becomes a community in which users share jokes, motivational posters, but also memories from the “good old days.”
But the group is not only a gathering place for nostalgic youngsters; it is also very active, and with a clear strategy in mind. Indeed, users start trolling Algida’s official Facebook page. Every time a post, picture, video et cetera is published on that channel, immediately users start to post pictures or jokes with a common denominator: bring Winner Taco back. The phenomenon grows in intensity and continuity, to the point that Algida cannot use its channel anymore. Interestingly, Dutch and Swedish Winner Taco fans put the same pressure on Ola and SB Glace, respectively. Bottom line: on January 2014 the following post appears on Algida’s page:
Would you like to know what your friends do? How they spend their time? Where? With who? What are their favorite places? Where are they are now? Alternatively, did you have this following experience: You meet with your friend and tell what you did some time ago and it appears that you were at the same time at the same place and unfortunately, you did not know that?
Foursquare is an answer to all these questions. Almost everyone heard something about the company as itis one of the biggest startups of Silicon Valley. Now, it exists for more than five years and during this time the company raised around $600 million of investments and increased its users base from 50,000 people to 50,000,000! Moreover, since 2010, April 16 is 4sqDay; this date has a clear link to the company’s name.
Foursquare is a social net where you can “check-in” in any place where you currently are. You can also add comments, photos and people with who you are. For that, you earn badges and points to compete with your friends and other users. When you check-in, your friends will see that. If it close by, then they can join you to have fun together or they can just like, comment on your check-in and look at profile of the place. When you click on a place, you can see general information (e.g. address, open hours), photos and comments made by other users about this place. In addition, Foursquare helps you to find places where to go based on different parameters: distance, previous visits of you and your friends, and rating. Foursquare thus helps you to share your location with your friends and search for new places.
Can’t decide what book to read next? Are book recommendations from Amazon not useful? Then go to http://www.goodreads.com a free online platform that prides itself in its customized recommendation system to match you with your future favorite book.
Goodreads combined several information systems to create an online platform connecting books (and authors) to readers. Goodreads calls itself a “social cataloging” website, which more or less means it’s an online platform co-created using crowdsourcing to build an extensive catalogue and information search system combined with an intricate algorithm to base its recommendation system on.
The platform started from a mission “to help people find and share books they love… [and] to improve the process of reading and learning throughout the world,” (Goodreads.com). In order to dare to attempt such a lofty dream the founders turned to crowdsourcing, allowing people to join the community for free and upload books and journals. Users are able to make their own profiles, reading lists, start forums, and discussions, and create their own group of book recommendations; attracting over 20 million users, causing the “net-work effect” and a subsequent library of over ten million books and growing(Eisenmann, 2006).
Choice overload! What to choose!? No fear, the website prides itself in its accurate Recommendation Agent (RA) algorithm. When a user signs up the first thing they do is go through active content-filtering by selecting preferences for book genres. The second step is to review/rate 20 books which the RA uses as collaborative filtering to recommend books based on matching criteria using the opinions of “like minded people”(Xiao, et al., 2007).
A common homeowner predicament, Angie found herself in need of in-house repairs but did not know the most reliable contractor. To remedy this situation in 1995 Angie went door-to-door in Columbus, Ohio and collected a list of over 1,000 reviews and ratings of local contractors. Since then “Angie’s List” has grown to provide a include reviews of over 700 different industries, supporting over 2 million users! Now it is an information search website for contract services facilitated through crowd-sourced reviews and ratings, a service platform connecting local business with customers.
In a world with so much information, and especially in the service industry with information asymmetry between companies (experts) and consumers (usually novices), people are looking for less costly ways to be more informed by delegating the information search to the “Wisdom of the Crowd,” (Surowiecki, 2005). Some companies have designed their entire business models around this idea; crowdsourcing and crowdfunding have shown how to “let the crowd get your work done for you- cheap, perfect and now,”(Malone, et. al., 2010). Some companies (Wikipedia) have successfully harnessed and managed collective intelligence to provide platforms of information(Malone, et. al., 2010). But how can anyone be sure that Angie, or any other platform, is providing us with unbiased information?
Today many companies provide options to rate products. Some go a step further and turn user ratings into the service they provide. Vivino is an example of an app that does just that. I have used the app for a while now, mainly to keep track of the wine I drink and thereby increasing my extracurricular learning experience. Now I decided to have another look at the app and see with what kind of suggestions it provided me, something the app is also intended for…
How does it work?
It starts by manually adding a wine (although this function is a bit hidden away) or scanning the label of a wine manually. In case of the latter Vivino generally finds the wine you scanned within seconds, you then need to check whether it scanned the right variety/type, as the vineyard is most of the times properly recognized, the various wines per vineyard can sometimes be a bit more of a hassle. In case it is not directly recognized Vivino’s team will manually match it for you. After you scanned a wine you can rate it (using a 5 star rating system, with half star intervals), add public or private notes or update information about the wine manually, such as the grapes, price et cetera. This seems to be a powerful system. As the database now holds over a million wines and more that 4 million people using the app worldwide.
Recommendations Based on the users ratings the user will receive recommendations for other wines. In the recommendations tab you see an overview of wines, with a note to it as to how many ratings you have in common with a certain person that likes the suggested wine.
Group buying is not new for online buyers anymore. Sometimes, with certain amount of people buying certain products, online seller will offer discount or eliminate the shipping fees. While the concept of group buying applied on the intangible goods, such as service, the idea of group coupon came up. Sellers, such as restaurants, beauty salons, hotels, exhibitions, trips, will offer certain amount of group coupons in limited time, and consumers will collect money for the coupons. For instance, my friend and I collected ten people in total within a week to get 30% discount for an art exhibition.
Groupon is an online platform gathering all these group coupons. It was found at 2008 in Chicago and soon enlarged its business territory into 49 countries. Groupon offer APP for consumers to update latest discount and download these coupons on phone. With high mobility, Groupon is creating a new marketing strategy. Many startup stores offer coupons to increase customers and fames. Some sellers offer coupons to gain customers in three weeks beforehand, gaining steady amount of customers, while other sellers offer last minute coupons to earn maximum profit.
Already early in the adoption of the Internet, Durk Jan de Bruin started thinking about a remote control for the overload of webpages on the Internet. In this process, he imagined his father being an inexperienced Internet user as the target audience of such a website. His idea was to provide a webpage which contains a collection of links within a certain area of interest. On 15 September 1998, Startpagina.nl was launched. It provided an overview of all the most important websites on the Internet, grouped per type. During its first years, the number of visitors boomed from 40,000 page views per day in the first days, to 1 million in 2000 and 4 million in 2009 .
Equally remarkable however is the growth of the number of daughter pages. The first daughter page ‘vakantie.startpagina.nl’, was launched in February 1999, and only contained links that were related to vacations. After a while, visitors were invited and encouraged to begin their own daughter page, about topics of their interest. The number of daughter pages increased rapidly: 800 in September 2000, and 5,700 in 2009 . The last couple of years the growth has stabilized, resulting in the current number of daughter pages of 6,049 .
zeilen.startpagina.nl: startpagina.nl’s daughter site on sailing, only providing useful links on this topic.
Because Durk Jan de Bruin made it seem like he was running the website from his attic, he was able to attract so many other people believing in the cause. Throughout the years, the 1,700 individual administrators of these pages form a community that even organizes a ‘daughterday’ each year. The administrators are independent, and their pages are kept up-to-date through feedback, tips and suggestions from visitors. In addition to suggesting new links to the page’s administrator, visitors can add personal links in a separate section on the page and if some sections don’t apply to the visitor’s area of interest, they can be removed from the page. Another way how visitors are actively involved in the page are the message boards or fora behind each daughter page, where visitors can exchange ideas and opinions about their field of interest.