Once upon a time there was a depressed man named Louis, who recently lost his favorite sweatshirt from New York. There’s no website to buy it and he won’t go back for at least a few years….
Across the pond sat a man named Nick, a New Yorker traveling to London for the first time. With only one weekend in London he wants to find the best possible pub for fish n chips. But alas, every pub claims to be “THE BEST” and Trip Advisor gives everyone 5 stars…
Fortunately for both Louis and Nick, the stars aligned and created a website to solve all of the problems and limitations faced by today’s Urban Nomads.
An online platform co-created and crowd-sourced by today’s traveling young urban professionals (yuppie’s) to connect and exchange information about all of the most up-to-date international trends and products. (Majchrzak et al., 2013)
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.
it’s as easy as 1, 2, 3, 4. 1. find friends 2. select genres 3. rate books 4. view recommendations!
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.
It’s easy as 1, 2, 3, 4!
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?
Companies recently discovered the opportunity to combine products with online communities, to support continuous usage of their product(s) in evolving ways; creating a whole new experience for customers. While previously consumption ended after the tangible product had been purchased, the online community continues the consumption period and becomes more important to the customer than the product itself. We call this a “continuous consumption community.”
To keep these online communities functioning, there must be some level of community commitment that is either need, affect, or obligation-based (Bateman, et. al, 2011). An online community would ideally like to evoke affective community commitment, or “an emotional attachment to the organization, which leads them to act in ways that further the organization’s interests,” (Meyer and Herscovitch 2001). Specifically within online communities, this type of commitment stimulates both reply-posting and moderating behavior among users (Bateman, et. al, 2011).
So how do these websites attract users and create “emotional attachment”? The fitness community 1-2 Sports (www.1-2-sports.com) tries to attract users through an easy-to-use website and mobile app, lowing the barrier of entry for novices to join the community. Some online communities create attachment through a common identity; the gaming community World of Warcraft evokes identity with graphics (www.warcraft.com).
World of Warcraft Website with “Nerdy” Fantasy Graphics
Upon first glance at the website of another online community, Nerd Fitness, you might think it was created in 1997 instead of 2009; the graphics are out-of-date and the interface is rather tricky to navigate. And yet it has successfully created an online fitness community of nearly 200,000 users! How?!
In the backpacking world Hostelworld has become a household name, which makes sense considering the fact that www.hostelworld.com is the world’s number one hostel booking website, and “the leading provider of online reservations for the budget, independent and youth travel market.” With the mission: “to become the fastest-growing online provider of great value accommodation, using innovative technology to inspire independently minded travellers everywhere,” the company has certainly done just that, now listing over 35,000 properties in 180 countries, with over 3.5 million guest reviews.
The website was created by a hostel owner and IT entrepreneur who realized that at that time, 1999, there was no way to book and pay hostel reservation deposits online. The company started out as a platform connecting backpackers in need of cheap accommodation with budget hostel owners but has the platform has grown to include other types of accommodation including campsites, self catering accommodations, B&B’s and budget hotels.
Hostelworld created “the network effect, with value growing as the platform matched demand from both sides…increasing returns to scale,” (Eisenmann, 2006). One of the ways the website attracted so many users was through their affiliate program with over 3,500 distribution partners, including big names in the travel industry such as Lonely Planet and Ryanair.com.
Consumer Value Creation 