The Dark Side of the Sharing Economy . . . and How to Lighten It


Two-sided platform business models, such as the emblematic Airbnb and Uber, have shown the upsides of the sharing economy during recent years. By the time the article was published in 2014, the sharing economy was estimated to have a value of $26 billion, and it is expected to have a value of more than $300 billion by 2025 (Wadlow, 2018). Sharing is increasing and customers are receiving additional value, but the new markets are also susceptible to failures and unfair conditions that should not be ignored.

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The Dark Side

The authors showed the downsides of the sharing economy with different examples.

  • Shift to unbalanced markets: Airbnb and other accommodation sharing platforms are often more profitable for landlords than long-term rentals. As a result, there are less houses available for regular long-term rentals and average low-income inhabitants can encounter difficulties to find a place to live at an affordable price.
  • Honesty and Reputation issues: dishonesty in the sharing economy has led to several rip-offs. Malicious reviews can also damage the reputation of providers and users.
  • Sharing economy or ‘skimming’ economy?: ride-sharing alternatives can offer better prices than traditional transportation methods because drivers find loopholes to avoid extra licenses, insurances, rules and taxes.
  • Sharing economy or shared servitude?: activities like ride sharing or micro-outsourcing sometimes provide irrelevant income while taking away job opportunities from the base of the pyramid.
  • Whose Ox Gets Shared?: legal disputes can arise between a producer and a sharer. Aereo marketed a product to stream and share the content broadcasted in 1 device into other devices (personal or for other people), which was legally banned in the US. Similarly, an app founded in San Francisco was facilitating drivers to auction their public parking spot, also encountering legal confrontations.
  • Not my responsibility: this is usually the attitude of the sharing economy platforms. For instance, an Uber driver is just a contractor and the company is not liable for any accident. Some companies are benefiting from the sharing economy by taking the profits and transferring the risks to other parties.

 

Lightening the Dark Side

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  • Take responsibility for risks that benefit the system. Companies like to avoid risks, but the benefits of taking responsibility for a risk can offset the realized costs. For instance, banks were at first opposed to the Fair Credit Reporting Act because it increased their liability for unauthorized transactions. They thought it would encourage fraud and careless behaviors, but it ended up benefiting the banks. Protecting the customers significantly increased credit card usage, which has a greater economic impact than the additional liabilities they now have.
  • Invest in the consumers. If customers themselves are creating the value, investing on them can significantly increase the revenues of a company. Airbnb invested in educating the renters in order to publish better descriptions and pictures, which in turn resulted in double the revenues.
  • Drive community self-regulation. Platforms can detect and solve issues quicker than the government or external parties. Users can also be useful with methods like reputation systems.
  • Tax fairly. A good example is the city of Amsterdam, which implemented a fair tax on sharing economies like car and accommodation sharing to create fair markets.
  • Set review systems. Consumers rely on reviews in their decision processes when taking part of sharing economies. Everyone should be able to have access to complete and trustworthy information.

Critique  

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The article provided a good overview of some risks and best practices for business models based on the sharing economy. The authors used plenty and good examples to illustrate these dos and don’ts of the sharing economy. The paper also does well on taking into account all the points of view (companies, customers and other stakeholders) when formulating their arguments.

On the negative side, the article does not touch upon all the downsides of the sharing economy and does also not include some important recommendations on how to manage these platforms. For instance, as an additional dark point:

  • Working for the sharing economy often leads to no traditional job benefits, such as retirement plans or healthcare.

Additional recommendations for sharing economy platforms not touched in this article could be:

  • Build trust and values within a community and avoid information asymmetries by providing full and good quality information.  If customers understand their common needs and feel part of a community they will more likely help each other through value creation.
  • Lastly, the article does not talk about how important it is for local governments to control and collaborate with local platforms. Local authorities should ensure no unfair market situation arise, and they can also improve the efficiency and welfare of their cities by supporting sharing economy platforms. According to Frey et al. (2018) there are already enough governmental regulations in place, but the authorities just have to make sure that these regulations are met by enforcing more platform transparency and better controls. Governments can also foster a healthy growth of the sharing economy by helping to solve data privacy issues.

Moreover, the article provides a general overview of the issues and best practices of the sharing economy, but it does not provide any empirical evidence of the real impact (both positive and negative) of the sharing economy. According to Petropoulos (2017), there is not enough empirical evidence on the real impact of the sharing economy, and therefore it is not possible to optimize its regulations. This author claims that researcher need to conduct more longitudinal studies with economic and social data to obtain new insights, rather than provide general overviews like it was done in the focal article. Petropoulos (2017) claims the problem is that sharing economy platforms are usually reluctant to provide researchers with the information necessary for good studies, and he calls for a change because all parties can benefit from these studies.

 

 

 

References

Frey, A., Welck, M., Trenz, M. and Veit, D. (2018). A stakeholders’ perspective on the effects of the Sharing Economy in tourism and potential remedies. University of Augsburg, pp.576-587.

Malhotra, A. and Van Alstyne, M. (2014). The dark side of the sharing economy … and how to lighten it. Communications of the ACM, 57(11), pp.24-27.

Petropoulos, G. (2017). An economic review on the collaborative economy.

Wadlow, T. (2018). The sharing economy will be worth $335 billion by 2025. [online] Supplychaindigital.com. Available at: http://www.supplychaindigital.com/logistics/sharing-economy-will-be-worth-335-billion-2025 [Accessed 8 Mar. 2018].

Community engagement and online word of mouth


Over the past few years, the online technologies and environment has developed dramatically to enable individuals to create, share and engage with web content rather than being a passive recipient of content. There are two significant online platforms- online brand communities (OBCs) and online word-of-mouth (WOM) channels for increasing customer engagement and boosting profits. Companies deploy an online brand community, where is not only a means to convey the brand message or provide customer support, but an interactive communication to build strong relationships among members. Customers benefit from their ability to recognize in each other while they’re willing to contribute their time and expertise to grow the identity-based networking. Although OBCs and online WOM channels are separated, customers tend to engage in multiple channels simultaneously.

Key findings: 
With regards to cross-channel engagement, the research empirically identifies three key findings:

  1. Consumer engagement in an OBC increases both their generating of online reviews (the volume of WOM) and online review ratings (the valence of WOM) after purchase.
  2. The effects of community engagement on online WOM become stronger among longer-tenured customers.
  3. The shorter-tenured consumers are more likely to have lower levels of engagement and commitment to the brand community.

Fig. 1. The conceptual framework of this study..jpgFig. 1. The conceptual framework of this study.

We can see above framework  how community engagement influences customers’ online WOM behavior in terms of generating online review and review ratings. The research considers several control variables, including product attributes, disconfirmation, review context, and customer attributes. Therefore, the article proposed two main reasons why community engagement will positively impact customers’ review generation. Firstly, community engagement enhances customers’ identification and loyalty, which facilitates their willingness to contribute to the brand or products by generating online product reviews. Secondly, community engagement is able to be geared positive performance in a voluntary environment, and engaged customers are more likely to give online reviews to help other customers make purchase decisions. Hence, here are the proposed hypotheses:

H1: Community engagement has a positive impact on generating online product reviews after purchase.

H2: Community engagement has a positive impact on online product review ratings after purchase.

H3a: The impact of community engagement on generating online product reviews after purchase is stronger for longer-tenured consumers than for shorter-tenured consumers.

H3b: The impact of community engagement on online product review ratings after purchase is stronger for longer-tenured consumers than for shorter-tenured consumers.

In order to test the hypotheses, the research examines a focal firm, which designs, produces, and sells female apparel in an Asian market, collecting all purchase transaction data, incorporating user ID, product ID, review ratings, review context, and the date of leaving review from its e-commerce website. In October 2010, the focal firm, first created its OBC with the objective of encouraging customer engagement. A total of 111,266 purchase records from 10,896 customers were sampled from May 2011 to December 2012. Specifically, 2,286 customers, at least 20% of customers, generated 12,723 post-purchase online product reviews during the time period.

Another strength is the second phase of data collection that the author created custom programs to gathered information from members’ profile pages, analyzing the discussion threads in its online brand community. The research utilized econometric models and set the control approach to achieve consistent estimation. Additionally, the author conduct robustness checks to verify the results of our analyses. The author finalized integrated community engagement data with the purchase data and online product reviews. Meanwhile, the author defined time windows of six weeks for each of the purchase records, which are consistent with the presented results. This implies that customer tenure moderates the relationships between community engagement and the intentions of generating online product reviews after purchase, and this relationship is strengthened when consumers have longer tenure.

Limitations:
First, while the dataset is retrieved from a single focal firm, we lack of exogenous data to compare levels of interaction with other online communities and verify the outcomes to see how and where we may need to change tact to achieve maximum engagement. Second, the research focuses on consumer brand and products, which might cause bias when applying to different product segmentations such as services or technical products, which require a certain amount of professional knowledge. Third, there are two major types in terms of who owns the platforms: consumer-initiated communities and company-initiated communities. The study targets firm-sponsored and we can investigate if different types of online brand communities could impact customer attitudes and behaviors variously.

Conclusion:
In summary, a firm’s OBC is an essential indicators of consumer WOM behaviors, resulting in positive online product review and ratings after purchase. Furthermore, the effect of community engagement on online product review and ratings after purchase is moderated by customer tenure. That’s why it’s important to map out how our business engages with customers across channels and increase channel engagement amongst the recurring customers; in contrast, we may need to lift sales conversions with first-time visitors.

Source:
Ji Wu, Shaokun Fan, J. Leon Zhaoc (2018). Community engagement and online word of mouth: An empirical investigation Vol. 55, Issue 2, 258-270

EVERY OENOPHILE’S DREAM: VIVINO


“Life is too short to drink bad wine.” – Johann Wolfgang von Goethe

You enjoy an occasional glass of red wine, or you just want to pair the day’s love infused dinner with an exquisite bottle of white. You go to the nearest wine shop, liquor store or supermarket only to be left alone staring at the abundance of options. Of course, you can ask the salesperson at the shop, but can he or she incorporate the knowledge of millions of wines into his recommendation? No, I didn’t think so either. It is your lucky day though, Vivino is here to help.

Finding the perfect bottle

Vivino boasts over 9 million different wines in its database covering over 3000 different wine regions for its community of 29 million wine lovers. Founded in the capital of Denmark, Copenhagen, by Heini Zachariassen and Theis Søndergaard in 2010, it is world’s largest online wine marketplace. The company is spread over three continents with their offices in Copenhagen, San Fransico, Ukraine and India, and so far has secured $56.3 million in funding including a staggering $25 million from SCP Neptune, the family office investment vehicle of the Moët Hennesy CEO, Christophe Navarre. A “community-powered e-commerce platform for personalized recommendations” as Zachariassen puts it, allows users to scan the labels of the whichever bottle they are about to buy and the app recognizes the key pieces of information such as the price, producer, year and the region of production. The app also gives tasting notes and recommends food pairings to go with your precious bottle.

Here’s a 60-second video explaining how:

Wine lovers unite!

The community dimension of Vivino is what makes it a truly customer-centric platform. It allows users to rate the wines, read the comments of other users and even follow their fellow oenophiles, possibly consisting of family and friends whose reviews will be highlighted in their feeds. Since the launch of the app some seven years ago, half a billion labels have been scanned and 88 million ratings have been submitted. With such a wealth of data, the company launched Vivino Market in 2017 offering wine lovers customized recommendations depending on their past behavior on the platform. The more labels they scan and more ratings and reviews they leave on the platform, the better recommendations the users get. Vivino seems to be the perfect conjunction of social media, big data, and machine learning assisting wine lovers to never be disappointed ever again with their choice of wine.

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Vivino by the numbers

A new era for selling wines

Vivino’s value proposition does not only concern wine lovers in the pursuit of a good wine. It also benefits retail partners and sommeliers alike. Guest-to-sommelier interaction is usually an awkward one: guest trying to explain what kind of wine he or she likes and sommelier trying to pinpoint “the one” with not much to go on other than “dry”. Vivino successfully steps in at this point. The users of the platform can simply show the sommeliers wines that they previously enjoyed, making everyone’s lives a little easier. And Scott Zocolillo, Managing Partner, and Sommelier at Nectar in suburban Philadelphia’s Berwyn agrees: “Vivino, to me, shows trends and preferences. I love when a guest has their app out, [as] it helps move the conversation along and helps me do my job and get them the best wine for their experience.” It doesn’t end there, though. Through its marketplace, Vivino charges a flat commission for retailers on the orders that are bought on its website and app. With over $40 million worth of wine sold through Vivino, it provides a disruptive opportunity for wine producers to reach a vast community of users who are appreciative of wine. A win-win situation for all parties involved!

Powered by a solid community of users with its current data capabilities, the company plans to expand to emerging markets such as Hong Kong, Brazil, and Mexico through its increased partnerships. The goal is to sell $1 billion in wine by 2020 and with 2 years to go, that doesn’t seem to be an easy target. However, Zachariassen seems to believe in the potential of the online market for wines. “Wine is a $300 billion industry and if you look at the online part of wine, e-commerce, it’s still very, very small,” says Zachariassen, pointing towards a plethora of opportunities in the online wine retail business in the years to come. For now, what we can do as wine lovers is to sit back, relax and crack open that bottle of red which is guaranteed to be a pleasure.

Here is another article written about Vivino from 2014: https://consumervaluecreation.com/2014/05/18/viva-il-vino-exploring-wine-with-vivino/

References

Crunchbase. (2018). Vivino | Crunchbase. [online] Available at: https://www.crunchbase.com/organization/vivino#section-locked-marketplace [Accessed 5 Mar. 2018].

Freedman, B. (2017). The Launch Of Vivino Market Could Herald A New Era In Wine Buying. [online] Forbes.com. Available at: https://www.forbes.com/sites/brianfreedman/2017/03/30/the-launch-of-vivino-market-could-herald-a-new-era-in-wine-buying/#35e56f975ed1 [Accessed 5 Mar. 2018].

Page, H. (2018). Investors Pour $20M More Into Wine Curation And Delivery App Vivino – Crunchbase News. [online] Crunchbase News. Available at: https://news.crunchbase.com/news/investors-pour-20m-wine-curation-delivery-app-vivino/ [Accessed 5 Mar. 2018].

Scott, K. (2017). Vivino: This app is designed to turn anyone into a wine expert. [online] CNNMoney. Available at: http://money.cnn.com/2017/08/01/smallbusiness/vivino-wine-app/index.html [Accessed 5 Mar. 2018].

Vivino.com. (2018). About Vivino. [online] Available at: https://www.vivino.com/about [Accessed 5 Mar. 2018].

Yeung, K. (2016). Vivino raises $25M round, led by Moet Hennessey’s CEO, for its wine discovery app. [online] VentureBeat. Available at: https://venturebeat.com/2016/01/12/vivino-raises-25m-round-led-by-moet-hennesseys-ceo-for-its-wine-discovery-app/ [Accessed 5 Mar. 2018].

Need a vacation? Send Coca-Cola a message!


Coca-Cola is an enormous brand with a value of 69.73 billion US dollars (Statista, 2018b). In the US, an average person drinks approximately 275 cans of coke per year which proves that the company has already ‘’attained’’ most of the people in the US (Stocker, 2015). Therefore, it is naturally to shift the marketing focus from short term sales towards a more long-term customer connection. Coca-Cola showed with their ‘’Share a Coke’’ campaign that loyalty among customers can be achieved by focusing on emotions.  In this campaign, the logos on the cola cans were replaced by popular names among young people (Moye, 2014). Basically, Coca-Cola was inviting buyers to take a part in a massive social marketing experience. On the long-run, this campaign turned out to be a huge success with almost 345,000 posts on Instagram with the Shareacoke hashtag. After a couple years of silence, Coca-Cola made its come back last summer.

The competition between Pepsi and Coca-Cola is an ongoing and endless battle, but the latter made an attempt to be the number one in the holy Ramadan month of 2017. Coca-Cola Egypt has studied the process of persuasion in which a very well-trained team helps employees to get the vacation they want (ThinkMarketing, 2017). The first thing was learning to build solid arguments, followed by understanding the personality of the concerning manager.  The company itself made it clear that anyone could be convinced.

The campaign went as following: the campaign encouraged individuals to contact Coca-Cola and describe the manager’s characteristics. This could be done by sending a private message and using the hashtag “#الأجيزة” with the name of the manager (Imfnd, 2017). After analyzing the characteristics of the manager, Coca-Cola’s well-trained team constructed arguments which are convincing enough for the specific manager. However, the arguments are not the only crucial part of the convincing process. The delivery of the arguments also counts. This differs per person, since every person is sensitive for different things.  After the team had constructed the solid arguments and found a way to deliver it, Coca-Cola sent the employee a video to convince the manager in giving him/her a vacation (ThinksMarketing, 2017).

The timing of the ad was perfect, since it was broadcasted two weeks before the annual vacation of Eid. Next, the team was chosen well since the members varied in both skills and appearance.  Furthermore, Coca-Cola made a smart choice by reintroducing a hashtag campaign. The main reason is because the number of social media users saw an increase between 2014 and 2017 from 1.91 billion to 2.46 billion (Statista, 2018a). However, the campaign was not a success. The ad had received approximately 1.6 million views in the 19 days it was broadcasted. This is impressive for an average brand, but certainly not for a heavy weightier as Coca-Cola. For example, Pepsi had received almost 1.9 million views in 7 days in the same period. The question remains, why was the campaign not successful?

COca cola campaign

There may be several reasons. Firstly, the campaigns served as a reaction to the losing classic soft drink battle between Coca-Cola and Pepsi. Pepsi has already managed to take over of almost 55% of the total viewership between the two and additionally 62% of the engagement (InsightHub, 2017). Thus, to fight back against the superior campaign ad of Pepsi, Coca-Cola released the discussed campaign. Coca-Cola switched from its original campaign towards the Ramadan campaign. Thus, the latter was basically a plan B. This indicates that there is a chance that due to lack of time, Coca Cola wasn’t able to prepare the campaign well.

Another reason may be because of privacy issues. Coca-Cola was only able to help if the description was detailed enough. This demands a lot of personal information from both the employee and manager. There is a good chance that employees were scared to be caught by managers and scared for the inherent consequences, like losing the job or make the relationship with the manager worse. Getting caught was a possible outcome since the whole foundation of the campaign was based on social media.

Concluding, the Ramadan 2017 campaign of Coca-Cola Egypt was not a success. Still, this was not a complete disaster. Coca-Cola, again, switched from focusing solely on acquiring as many new customers as possible, to engaging with its customers. Continuously engaging with customers is a crucial point here. Thus, even Coca-Cola has lost this battle; it still serves as a perfect example for many other companies.

References:

Imfnd, (2017). Coke Comeback: How Coca-Cola Use “Customer Participation” in a community campaign – imfnd. [online]

InsightsHub. (2017). Soft Drinks | Ramadan Insights Hub. [online] Available at: https://ramadan.thinkmarketingmagazine.com/brands/soft-drinks-ramadan-2017-campaigns/ [Accessed 4 Mar. 2018].

Moye, J., (2014). Share a Coke: How the Groundbreaking Campaign Got Its Start ‘Down Under’. [online] The Coca-Cola Company. Available at: http://www.coca-colacompany.com/stories/share-a-coke-how-the-groundbreaking-campaign-got-its-start-down-under [Accessed 4 Mar. 2018].

Statista (2018a). Number of social media users worldwide 2010-2021 | Statista. [online] Statista. Available at: https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/ [Accessed 4 Mar. 2018].

Statista (2018b). Topic: Coca-Cola Company. [online] http://www.statista.com. Available at: https://www.statista.com/topics/1392/coca-cola-company/ [Accessed 4 Mar. 2018].

Stocker, M. (2015). How Coca-Cola, Yoplait Use Customer Participation – Marketo. [online] Marketo Marketing Blog – Best Practices and Thought Leadership.

ThinkMarketing (2017). How to ask for a vacation? Coca Cola super convincing team got the answer! | Think Marketing. [online] Think Marketing.

New Ingredient for Your Diet: Virtual Support Communities!


Keywords: Virtual communities; Virtual support communities; Public commitment; Identity-based motivation; Social identity; Weight loss

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                                               Share your progress 🙂

Dear bloggers,

Session 6 of the course Customer-centric Digital Commerce will be about community commitment and sharing economies. The required readings for this session are about why people participate in collaborative consumption and what managers should know about the sharing economy. This blog post will provide some insight into the required literature for this week by showing the effect virtual support communities could have on achieving individual goals, for example weight loss. I hope you feel inspired!

Have you ever wondered why your friends share their holidays, high wines and new clothes on Social Media that much? Do you sometimes feel desperate by watching so much bullsh#t on the day that you have to work on your blog posts? Well, then buy yourself a large Starbucks at the campus and feel energized. But.. does it actually help? I have a better suggestion: open your Instagram or SnapChat App and SHARE YOUR PROGRESS. I can promise you will feel energized as if you drank three Starbucks in a row!

Unfortunately, a new trend is coming where people actually don’t like the Social Media Bloggers since it make people feel the grass is always greener on the other side (you might recognize this). However, you can use that grass to color yours and benefit from it! But.. how?

The answer is simple: grab your mobile phone, open your Instagram and share your personal progress. And yes: this has been confirmed by a very interesting paper.

Academic Paper
Let me introduce you a very inspiring study, named ‘Weight loss Through Virtual Support Communities: A Role for Identity-based Motivation in Public Commitment’’. The authors of this study published their convincing findings in the Journal of Interactive Marketing and concluded that watching others’ success on social media can actually be effective for your own success. In this study, they observed the progress of two different weight-loss communities over a period of four years, which is quite long. They found that those who had shared their progress online had greater success in achieving their weight-loss goals than those who did not share their progress.

The two communities included in the study are ObesityHelp.com, the best website for surgical weight loss support, and WeightWatchers.com, the site for the top lifestyle-oriented weight loss program. Within these sites, individuals can access information or create content via blogs, chat rooms, or comments. They write and share blogs and are encouraged to actively share their progress through both text and pictures.

According to the authors, social identity motivates public commitment in support of goal attainment. The sharing of intimate information and photos about weight loss goals in virtual space seems to be a key factor in motivating behaviors and thus helps people attain their goals. So, actually, people can share the greenness of their grass instead of thinking that it’s always greener on the other side! GO ONLINE AND SHARE YOUR PROGRESS. It might be more effective than just drinking coffee..

Side note: there are four types of virtual support community members:

Which type of community member do you think you are? For example on Instagram?

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Figure 1 | Typology of virtual support community members (Bradford et al., 2017)

Why is it relevant?
Not everyone can get the support they need from other people they interact with in person on a daily basis, for example friends and family. It might be helpful that technology can support community building and goal achievement in a digital world. Virtual Support Communities, such as online blogs, Instagram Blogs, and Facebook allow for accessibility, availability and flexibility in how users represent themselves on their achievements. These communities help participants to keep motivation and strive for progress. It decreases feelings of loneliness and makes people feel more happy and supported.

Virtual Suppo…. what’s that?
Social media can be used to build connections and relationships to have impact on the world. Jim Rawson says social media can build a virtual community in which to transform the sharing of ideas into real life endeavors. He is an academic professor at Georgia Regents University and his primary research interest is health policy, process improvement and innovative educational techniques. You should watch this video if you want a detailed explanation of what virtual support communities can do for online users today. Examples of virtual support communities are blogs on Instagram, Facebook and several webpages.

Click on the following link to watch the TedTalk of Jim Rawson on Youtube: TedTalk.

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Figure 2 | Example of Virtual Support Community on Instagram (wdtv.com, 2018)

Conclusion – ”Sharing the triumphs and tribulations of your weight loss journey with other members of an online virtual support community plays an important role in achieving success, according this new study. The study examines the role of virtual communities and public commitment in setting and reaching weight loss goals.” – Bradford et al. 2017

Critical Note
Strength: the study provides a new definition of virtual support communities by developing a typology of different users. This typology is based on both beneficiary focus and the breadth of sharing.

Strength: the study contributes an explanation of how the balance between compliance and co-creation influences opportunities for public commitment in Virtual Support Communities. Prior literature called for additional research into roles for value creation in online communities. The authors of this study provide answers to this demand. 

Weakness: the authors do not explain the limitations of their study, they only discuss their contribution to prior literature. A critical note towards their own work is missing.

Weakness: the authors used two samples from the following communities: obesityhelp.com and weightwatchers.com. Both communities focus on lifestyle-oriented weight loss. The results of this study thus might be low in generalization since online communities differ in the subjects they are focusing on. It might be that sharing progress around for example career might be less positively working on others than the progress of weight loss. Losing weight is kind of health related and people would therefore feel more emotionally attached towards their ‘friends’. For sharing progress around careers, it might be that envy comes into play.

Suggestion: further research that investigate the effect of virtual support communities should incorporate several distinct online communities. Communities that both differ in user types (recruiters, learners, etc.) and are focused on different topics (career, study, health, etc.). Moreover, further research should make a critical note around their own work. This study doesn’t provide limitations, which is disadvantageous for readers’ confidence.

 

Are you ready to share your progress? I hope you feel inspired 🙂 

 

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Bibliography
Tonya Williams Bradford, Sonya A. Grier, Geraldine Rosa Henderson, Weight Loss Through Virtual Support Communities: A Role for Identity-based Motivation in Public Commitment, Journal of Interactive Marketing, Volume 40, 2017, Pages 9-23, ISSN 1094-9968.

Author
D. Verpalen
374199
Erasmus University, The Netherlands

 

Braineet: The Platform For Innovative Brand Ideas


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The Digital Revolution has placed the customer at the center. A company that responded to the Digital Revolution is Braineet. Braineet launched in 2014 and it is an innovative crowdsourcing platform. Braineet allows consumers and employees to share their ideas with brands. Thereby, the platform bridges the gap between consumers and companies and facilitate companies to improve the quality of its products and services.

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Figure 1: How does Braineet works?

Braineet is available on the web, tablet and mobile app (Android & iOS) and offers members of the platform the opportunity to share ideas. Ideas can be posted independently by the user or by participating in Challenges of a brand (figure 1). These Challenges enables every member of the Braineet community to compete to win prizes and promote their best ideas. Each idea can be up to 140 characters. Users of Braineet can like and promote each other’s ideas in order to show their appreciation for the content of the idea. Subsequently, users can interact with the brand throughout the development process until the ideas have been realized.

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Figure 2:  Opinions of companies regarding Braineet

More than 100 brands have interacted with their customers via Braineet, including Nespresso, Taco Bell USA, AX, Dove. From figure 2, it can be concluded that companies are quite optimistic about Braineet. Companies are motivated to utilize Braineet because they want to solve problems, generate ideas and outsource tasks (Tsekouras, lecture 3). But why do firms want to delegate innovation to users? One of the reasons is that it is quite costly to obtain detailed consumer information (Tsekouras, lecture 3). Through Braineet, companies have direct insight on the preferences of the consumer regarding their products and services. Furthermore, the platform enables the firms to have interaction with customers and employees.

UnknownOn the other hand, consumers prefer to be active on Braineet due to the feeling of glory, the possibility of improving products/services according to their own wishes and/or the monetary rewards that they receive from brands (Tsekouras, lecture 3; Majchrzak & Malhotra, 2013). The greater the size of the crowd, the greater the possibility of idea diversity put forth by the crowd (Boundreau, 2012). Tens of thousands of ideas have been shared from more than 160 countries on Braineet. However, the large quantity of ideas doesn’t necessarily means that the quality of the ideas is high. The crowd often fails to offer well-considered solutions that incorporate multiple perspectives, risks and needs (Majchrzak & Malhotra, 2013). User ideas score high in terms of novel and customer benefits, but lower in terms of feasibility as the crowd are not always experts in the fields (Poetz & Schreirer, 2012). Braineet tries to overcome this issue by also offering employees the possibility to share their ideas for products/services. Employees namely have knowledge about the culture of the company and are experts in the field, so their ideas will definitely be more feasible. The downside of Braineet is the 140 words limit that makes it difficult for companies to understand complicated ideas. Consequently, it is harder for the company to integrate multiple ideas into a more integrated solution (Fuller et al., 2007).

The efficiency of the business model of Braineet can be assessed in the following way.
Firstly, there are moderate switching costs as consumers and companies can both choose to be active on other crowdsourcing platforms to maximize their value. For companies, this decision will depend on the quality and quantity of members of the community. Larger communities may result in more ideas whereas a community with more experts will result in more feasible ideas. For consumers, this decision depends e.g. on the brands that are active on certain platforms. When Braineet doesn’t facilitate their favorite brand, they might search for other platforms that do so.
Secondly, the protection from the competition is moderate. There are other competitors active in the market that provides the same services as Braineet, for example IdeaScale and Seezers. However, more than 100 brands used Braineet and Braineet includes success quotes of these companies on the website. Companies then tend to prefer Braineet over other platforms due to this experience factor.
Thirdly, the business model of Braineet is highly profitable due to the growing community and effective partnerships. Braineet worked with Microsoft GTM services during the past two years and that enabled Braineet to grow a larger base of enterprise clients and to double its revenue. Braineet namely benefits from Microsoft’s unique network and expertise in the B2B software landscape. Moreover, due to the partnership, Braineet runs on Microsoft Azure and integrates with Office 365 and Yammer. This is an unique feature compared to the competition of Braineet (IdeaScale/Seezers)
Lastly, the business model of Braineet is highly scalable. Braineet has no inventory and the company requires few capital investment to serve a growing consumer base.

In conclusion, Braineet has good future prospects and it is an excellent response to the Digital Age where business models are more consumer-centric. Would you participate on Braineet?

References: 

https://www.braineet.com

https://partner.microsoft.com/el-gr/case-studies/braineet

https://www.seezers.com

http://strategyzr.s3.amazonaws.com/assets/vpd/resources/seven-questions-to-assess-your-business-model-design.pdf

https://blog.braineet.com/en/about-braineet/

https://ideascale.com

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Majchrzak, A., & Malhotra, A. (2013). Towards an information systems perspective and research agenda on crowdsourcing for innovation. The Journal of Strategic Information Systems, 22(4), 257-268.

Boudreau, K.J., (2012.) Let a thousand flowers bloom? An early look at large numbers of software app developers and patterns of innovation. Organization Science, 23(5), 1409–1427.

Poetz, M. K., & Schreier, M. (2012). The value of crowdsourcing: can users really compete with professionals in generating new product ideas?. Journal of product innovation management, 29(2), 245-256.