Category Archives: Business Case

Yolt: own back your financial data


A growing sense of mistrust towards traditional banks after the 2008 financial crisis gave rise to many new fin-techs. These new fin-techs were focusing on new financial services, including crowdfunding, mobile payment solutions and financial platform, which traditional banks were not offering to large extent at that time (Darolles, 2016). Personalized solutions to financial matters offered by these fin-techs were in stark contrast with the traditional finite services and products offered by traditional banks. Technological advantages and new regulation reduce the entry barriers to the financial sector, which give fin-techs access to technological solutions at much lower cost as traditional players often have a disadvantage due to their technological architecture (Darolles, 2016). Millennials in particular have lost their interest in financial matters, as traditional banking is considered too functional (Tuk, 2018). Fin-techs focus on this generation with new interactive solutions where customers are actively involved in solutions for financial matters.

Traditionally, banks were the only institutions that had direct access to customer financial data. With the introduction of new European financial regulation (PSD2) last month, the way how we interact with our banks may fundamentally change. The most fundamental change of the new PSD2 regulation is that banks are obliged to share financial data with third parties if a customer wants to share them (Manthorpe, 2018). In this way, third-parties, like fin-techs, can access the bank account of a bank customer through an API and provide services on the basis of this data. APIs have been used for years, but last decade’s technological developments allow banks to operate a new form of API management. Financial account data resulted from open APIs is used by the newcomers and therefore challenge traditional banks. For traditional banks the new PSD2 regulation have large strategic implementation as they may lose the customer interaction and just become infrastructure providers while others leverage on more profitable financial services. So, long-term success of traditional banks depends on how they respond. To a large extent, traditional banks are now collaborating with fin-techs that provide these third-party services. INGs answer to these developments is the application Yolt, a smart money management application, leveraging on the developments of PSD2 and open banking.

 

How does Yolt work?

Yolt mines customer data across different accounts of different banks and provides them in a single overview to manage all financial matters (Schiffers, 2017). Integrating accounts from different bank accounts provides Yolt with an extensive dataset from which the application can analyze financial behavior. In this way, data analysis can predict balances and provide tips on budgeting and savings, which will give customers more insight into their finance (Tuk, 2018). This does not stop here, as Yolt offers a special marketplace for partners. For example, utility service providers can collaborate as a partner with Yolt and offer comparing services on the basis of financial data of the customers (Tuk, 2018). So, if your energy bill may be reduced by switching energy provider, Yolt will automatically notify the customer. Furthermore, customers can actively be involved when one of their contracts ends. Again, Yolt will automatically notify the customer and may offer substitutes to the current contract.

 

Efficiency criteria

After one year of developing the application internally at ING, Yolt was released to the public in the summer of 2017 in the United Kingdom (Schiffers, 2017). In January 2018, the introduction month of the new PSD2 regulation, Yolt had 100.000 users (Schiffers, 2017).  As PSD2 will mandate banks to share financial data, competition about financial data will be fierce as Yolt will not only compete with traditional banks but also big tech companies like Google and Apple who both have their interest in managing finance. From a customer’s perspective, using an open banking initiative like Yolt puts the customer back in control and possession of their own financial data and can decide themselves how they want to participate in analyzing their data. The traditional financial ecosystem limits customers in awareness and access to better opportunities, which is one of the reasons that bank customers do not change quickly the bank that their parents also had. Transparency did shake up many industries, like how Trivago did shake up the travel industry, Yolt may shake up the financial sector by providing the most fitting financial product to the customer (Tuk, 2018). This may disadvantage the parent company ING, as Yolt will offer also products and services from competitors. So, from Yolt/ING’s perspective the Yolt platform is a way to leverage new regulation that will strategically impact a traditional bank like ING. In this way, ING can test new ideas concerning open banking and PSD2 in the UK market. This market is particularly important as the UK government is one of the frontrunners in the EU in terms of open banking (Manthorpe, 2017). In collaboration with the eight largest banks in the UK, Open Banking Limited a non-profit organization, has already been set up to streamline and standardize the processes to facilitate an open banking ecosystem (Manthorpe, 2017). Learning from the UK launch, ING could leverage open banking in other markets as well. Furthermore, ING can test new revenue possibilities as Yolt will receive a commission on the contract concluded through the platform.

In summary, Yolt will bring value to both the consumer as well as ING, by providing insights into financial data and related products and services as well as providing insights how to best practically apply the possibilities of the new regulation.

 

 

Darolles, S. (2016). The rise of fintechs and their regulation. Financial Stability Review, 20(4), 85-92. Retrieved from https://publications.banque-france.fr/sites/default/files/medias/documents/financial-stability-review-20_2016-04.pdf

 

Manthorpe, R. (2018). To change how you use money, Open Banking must break banks. Wired.co.uk. Retrieved 17 February 2018, from http://www.wired.co.uk/article/psd2-future-of-banking

 

Schiffers, M. (2018). Yolt verkent voor ING de wereld van fintech. Fd.nl. Retrieved 17 February 2018, from https://fd.nl/ondernemen/1230113/yolt-verkent-voor-ing-de-wereld-van-fintech

Tuk, Y. (2018). Fintech Yolt over eigen groei en komst PSD2: ‘Niet direct open Europa’. Emerce.nl. Retrieved 17 February 2018, from https://www.emerce.nl/achtergrond/fintech-yolt-groei-impact-psd2-direct-open-europa

Helix: How Your DNA is Choosing Your Wine


Imagine that you really like pizza. You probably have a favourite pizza – and a favourite place to get it – right? Let’s say your favourite pizza is a margarita. When you get the pizza and eat it, you will probably like it. However, do you not sometimes think something could have been done differently? Maybe there should have been less cheese, maybe it’s too greasy, or maybe the temperature is just off? Does getting the perfect pizza every time sound like a dream to you?  Well, it’s time to wake up then, because consumer genomics start-up Helix is very close to realizing this concept.

But first, let’s back it up a bit.

What are Human Genomics?
The whole concept of human genomics started off in medicine. A patient’s DNA would be sequenced, which means that “the exact order of the four bases in a strand of DNA” would be determined (yourgenome, 2016). Why does this matter, you ask? Well, with the exact order of the composition of somebody’s DNA, doctors could tailor their treatment, medicine, and pretty much every factor that would impact a patient’s health (Farr, 2016). Probably the most popular case of DNA sequencing is that of Steve Jobs, who paid $100,000 in 2011 to sequence his DNA in an attempt to let doctors gain more insight into his sickness and try to help him more effectively (Farr, 2016). Next to the value of DNA sequencing in medicine, Illumina – the company whose supercomputers are behind 90% of DNA sequencing ever done – has identified a use for DNA sequencing outside of the medical field (Farr, 2016).

The Birth of Helix
Helix – an Illumina spin-off – is said to “democratize genomics” (Farr, 2016). Illumina has managed to bring the costs of DNA sequencing down tremendously – partly due to decreasing lab costs and more lenient regulatory decisions in the US (Farr, 2016; Teo, 2017). Where Steve Jobs paid $100,000 in 2011, a comparable procedure would now cost less than $1000 (Farr, 2016). According to helix, DNA sequencing can – next to provide more insight into diseases – discover other personal matters like your lifestyle, personality traits, taste senses, and much more (Farr, 2016). See where I am going with this?

Helix provides many different products. They – for now – offer six different product categories (Helix, 2018).

  • Ancestry: These products help you find out where your ancestors stem from, to hundreds of thousands of years back;
  • Entertainment: This is the fast-moving consumer goods section, if you will. Here, you can get for example a wine tailored to your taste perfectly;
  • Family: These products are mainly meant for families that want to grow, offering them fertility information;
  • Fitness: Here, Helix wants to help you to “reach your full potential” by designing the perfect workout routine;
  • Health: This is the more traditional use of DNA sequencing as explained in the previous section;
  • Nutrition: Lastly, the nutrition products let you design your perfect nutrition plan that suits your metabolism the best (Helix, 2018).

Source: Helix.com

The Business Model
Helix has a new and unusual business model. As they work closely with Illumina, they have many valuable resources that help them analyse consumers’ whole DNA spectrum, whereas similar companies are able to only analyse part of it (Zhang, 2017). Consumers pay a one-time $80 fee to analyse their DNA and the rest is subsidized by Helix (Zhang, 2017). The consumers then choose what kind of products they would like to purchase, and Helix lets third-party companies create those products based on the genetic information Helix provides them (Zhang, 2017).
Helix has, in that sense, created an online platform with customers – on one hand – who gain access to the platform by letting their DNA be sequenced, and on the other hand the product developers (Molteni, 2017).
The business model is efficient in the sense that its platform brings together companies that offer very specialized, personalized products and consumers that are seeking such products and cannot find them in conventional retail channels. Customers benefit as they receive products that are tailored to their individual tastes to the maximum extent, and companies benefit as they cater to the customers. Also, as the companies get to know more and more about individual customers, they could use this information to develop tailored product recommendations. However, as will be explained in the next section, the efficiency of the business model might suffer from regulatory decisions and consumer privacy issues.

Talk About Personalized Products
Basically, Helix takes product personalization to the next level. Personalizing products has many advantages, for example customers’ craftsmanship is emphasized, and customers form a connection with the product if they have put effort into designing it (Nagle, 2017). However, writing your name on a wine label and getting the wine tailored to your DNA are two completely different things. Because DNA is pretty much as personal as you can get, there are potential drawbacks of the Helix business model. The first and most obvious issue is privacy concerns. If people are already freaking out about the cookies that are gathered on websites, why would they send their DNA to a company to get a product of which they could by a similar version in the supermarket?

Some companies using DNA sequencing store consumer data for “unspecified research” and might sell it to third parties (Niemiec & Howard, 2016: p.23). If consumers get suspicious about this, and privacy concerns rise through the roof, it might negatively impact Helix as well. Also, ethical issues such as discrimination based on DNA information are surfacing, too (Farr, 2016). Imagine that your life insurance gets to know your DNA information, this could highly impact the price you pay.

All in all, although customers like personalized products, the safety of information security measures – or even international regulations – need to be established before customers can completely trust the businesses.

The Future
In the future, Helix aims to create an “App Store” for their genomics products and services (Farr, 2016). They want to create the platform in such way that consumers can access their DNA information, browse the “App Store” to discover products that they like (Farr, 2016). The consumers just need to let their DNA be sequenced once – just like you create your Apple ID once – and can then browse the “App Store” as they wish (Farr, 2016). Helix compares their platform to the App Store rather than to Google Play, as they aim to review each seller, which is what Apple does do each app created, whereas Google takes a more lenient approach (Zhang, 2017). Right now, Helix already has 14 employees whose task it is to get to the bottom of the products developed by their featured companies (Zhang, 2017). The buzzword of the platform is that it is “dynamic” (Molteni, 2017). Helix wants to evolve and widen its platform as the research improves, resulting in more products and services to offer to their customers (Molteni, 2017).

So, if you ask Helix, the next time you eat a margarita, you will love it so much that you will feel it in your genes, literally.

References
Farr, C. (2016). Genetics Startup Helix Wants To Create A World of Personalized Products from Your DNA. Retrieved from: https://www.fastcompany.com/3065413/genetics-startup-helix-wants-to-create-a-world-of-personalized-products-from-your-dna [Accessed February 16th, 2018]

Helix (2018). How It Works. Retrieved from: https://www.helix.com/howitworks/ [Accessed February 16th, 2018]

Molteni, M. (2017). Helix’s Bold Plan To Be Your One Personal Genomics Shop. Retrieved from: https://www.wired.com/story/helixs-bold-plan-to-be-your-one-stop-personal-genomics-shop/ [Accessed February 17th, 2018]

Nagle, T. (2017) How Personalized Goods are Shaping the Economy. Retrieved from: https://www.forbes.com/sites/theyec/2017/05/05/how-personalized-goods-are-shaping-the-economy/#b6bca33a1cce [Accessed February 17th, 2018]

Niemec, E. & Howard, H. C. (2016). Ethical Issues in Consumer Genome Sequencing: Use of Conumer’s Samples and Data. Applied & Transational Genomics, 8, pp.23-30.

Teo, G. (2017). The Second Coming of Consumer Genomics With 3 Predictions for the Future. Retrieved from: https://medcitynews.com/2017/07/second-coming-consumer-genomics-3-predictions-2018/?rf=1 [Accessed February 17th, 2018]

YourGenome (2018). What is DNA Sequencing? Retrieved from: https://www.yourgenome.org/stories/what-is-dna-sequencing [Accessed February 16th, 2018]

Zhang, S. (2017). How Do You Know When a DNA Test is B.S.? Retrieved from: https://www.theatlantic.com/science/archive/2017/07/helix-dna-tests/534402/ [Accessed February 17th, 2018]

Would you mind filling out this survey?


Many of us have struggled to find participants to fill out our bachelor’s thesis/dissertation survey. I remember logging in into Facebook and finding 5 to 6 “PM’s” (private messages) A DAY from classmates that have been abusing of the CTRL+C and CTRL+V command:

Hey “name”, how are you doing?
Could you please fill out my thesis survey? It’s about 5 minutes long and it’s completely anonymous. I can fill out yours if you want 😉

Good old days…

As bizarre as it sounds, I did not ask them to fill out my thesis survey back, but this is just because the sample of my thesis was ‘manufacturing companies‘, not students, not regular people.

However, if the respondents of my thesis were regular individuals, then I would consider spamming all the contacts of my Facebook friends list. However, this comes with some cons, first and mostly, annoying your friends… But I have good news for you!

Let me introduce you to the award winning start-up project “Survey Exchange”. Even though there have been identical platforms in the past, such as http://www.survey-x-change.com, these are either shut down or do not have very good Google SEO positioning because these type of pages are usually labeled as spam. As a mater of fact, when you try to log in via Facebook, even our beloved start-up has been denied from using Zuckerberg’s APIs or the developers have messed up somewhere in the Login code.

02_errorfb

Our start-up has been operating since 2016 and has won multiple student entrepreneurship awards in the UK (Linkedin.com, 2018). As of February 16th 2018, Survey Exchange is the first result to show up when googling the search words “survey exchange” and according to its founders it has a potential market share of half million users in the UK alone (Survey Exchange, 2018), which I honestly think is a long shot, because it’s delusional to think that 100% of British students will adopt their platform before it gets shut down or labeled as spam website and get lost in Google rankings.

The dynamics of this business model are very simple yet very effective. This start-up relies on crowd-sourcing the filling of the surveys to the users of the platform in a #like4like fashion.

Like4Like is a popular hashtag on Instagram whereby users indicate their willingness to receive likes on their posts in exchange of liking other users posts back (hasthagdictionary.com, 2015). It has the same dynamics as Follow for Follow in Twitter and Sub for Sub (subscribe) in Youtube.

In this case, users of the platform have to create a free account in surveyexchange.co.uk and as the users fill out the questionnaires they will earn “Q points” based on the length of the surveys. The more surveys a user answers, the more Q points it will earn, which can be used later to request more responses for their own surveys.

maxresdefault

The revenue model of the start-up is quite simple, it generates traffic by facilitating a crowd-sourcing platform for students that need to get their surveys filled in and shows them targeted GoogleAds advertisements in its website. In addition, as it can be be inferred from their privacy agreement, the crowd-sourcing platform is also planning to sell premium services and products that will require personal information (Survey Exchange, 2018). Such products and services are likely to be purchased “Q points” so that the users will get their crowd-sourced responses without having to fill out additional surveys.

The beauty of this business model is in its simplicity. Just setting up a platform where its users generate value by crowd-sourcing their own surveys in exchange of an equal amount of commitment. This is therefore a one-way platform where the value of the network grows in a Metcalfe’s law fashion as the number of the users increases.

Metcalfe’s law states that the value of a network is proportional to the square of the users connected to the system (Wikipedia, 2018). This is related to the fact that the number of total possible survey responses ‘n’ (assuming that each user has only 1 bachelor survey) can be calculated by n(n-1), which is asymptotically proportional to n^2.

total amount of responses

If there are 2 users, that means that each user will get 1 response for their survey (you can’t answer your own survey),  totaling 2 responses [2(2-1)=2]. If there are 4 users there will be 12 responses, if there are 8 users there will be 56 responses…

However, there are some limitations with the valuation of this platform. Not all users will be willing to respond to all surveys, and some users may even have more than one survey.

Users are not expected to stay in the platform for any time longer than their thesis/dissertation data collection process and therefore the traffic of the website is not expected to grow in such exponential fashion.

There are also obvious limitations when it comes to the quality of the answers of the survey, both in terms of reliability of the answers and in terms of validity of the sample.

Users that need large amount of responses are likely to give low quality answers without actually reading the questions in order to get as many Q points as possible within the shortest amount of time.

Another concern is that the owner of the survey has 0 control about the type of person that is filling the survey as at this point the platform does not offer the possibility to filter the responses by demographics nor by other type of variable. This could lead to a very heterogeneous convenience sample that may have nothing to do with the actual focal unit of the thesis/dissertation.

Additionally, due to the nature of this platform, users may abuse of the Social Media function, which allows a user to collect Q points via responses from friends, and get the site black-listed from important websites such as Facebook or Reddit because of the amount of unsolicited requests to visit a link.

Despite all those limitations, the crowd-sourced platform seems to be doing fine as the interface of the website has improved overtime and students do not generally care about the quality of their data as long as they can get it quickly and cheap.

At the end of the day, it is better to ask the crowd to fill out your survey in a negligent way rather than faking the responses yourself and risk to get caught of committing fraud.

Let me know in the comment sections what do you think about this business model. Is it sustainable? Do you think they will shut down their website like it happened to survey-x-change.com? Do you think it will get lost in Google’s search rankings due to being labeled as a spam website? Would you use it for your own thesis?

If the answer to the last question is yes, I encourage you to not make a comment 😉

Thank you for reading!

List of References:

Linkedin.com, (2018). [online] Available at: https://www.linkedin.com/in/jakub-zimola-706b01104 [Accessed 16 Feb. 2018].

Survey exchange. (2018). Survey exchange | Exchange your survey and get the right respondents. [online] Available at: http://www.surveyexchange.co.uk/ [Accessed 16 Feb. 2018].

Hashtagdictionary.com. (2018). #like4like | HashTag Dictionary. [online] Available at: http://hashtagdictionary.com/like4like/ [Accessed 16 Feb. 2018].

Surveyexchange.co.uk. (2018). Privacy Policy. [online] Available at: http://www.surveyexchange.co.uk/pdf/Privacy_policy.pdf [Accessed 16 Feb. 2018].

GoFlow Surf: Crowdsourcing Waves


GoFlow is a surfing application which allows users to access life surf reports, upload pictures and videos, and contact friends and surf instructors. It was founded by 2 ex-professional surfers at Los Angeles, California, in 2012.

The need for GoFlow

Weather forecasts have become quite accurate thanks to technology, but wave forecasts are far more unreliable because they depend in many constantly changing factors. Wave conditions can change by hours and even by minutes, depending on the height and direction of the swell, the direction and strength of the wind, the tide, the wave period, and the sand underneath them which changes quicker than most people can imagine. Any person who surfs regularly has had uncountable disappointing experiences due to the unreliability of wave forecasts. Surfers often wake up before sunrise to catch the best waves and are often disappointed with bad conditions when they arrive to the surf spot. I think by now you get the idea of how unpredictable surfing conditions are, and GoFlow solves this issue with live surf reports thanks to the active contribution from all the surfers within a community.

Key characteristics of the business model

Value proposition: GoFlow satisfies the need for life surf reports, which printed surf guides or regular forecast apps (Surfline, Magicseaweed, etc.) cannot satisfy. A WhatsApp group is also not effective because it is not structured enough to show all the live reports of all the surfing spots, since there can be tens of surfing spots within a few kilometers of a coast line. In this app, surfers co-create live surf reports, therefore saving hours of frustration and unnecessary drives looking for waves. In order to understand the value of this app you have to realize that surfers are addicted to this sport and depend on forecasts and surf reports to either get surf sessions full of adrenaline or encounter disappointment and frustration. I can personally confirm this after surfing every day of my life from the age of 8 to 18.

goFlow-768x432

Moreover, GoFlow provides many other functions. It is also like a ‘surfer Instagram’, where users can show their pictures and videos and attract/promote sponsors. Another section of the App is a platform to connect surf instructors with people that want to learn or improve their skills.

The Key Activities of the start-up are attracting users to increase the network effect and improving the app, which are also the main cost sources. The resources are the know-how to keep updating the app, and the $2 million rose by the start-up between 2015 and 2016 within 2 investment rounds (Crunchbase, 2018). GoFlow is free to download and does not charge for any of its functions because it is trying to attract more users to intensify the network effect. At the moment, its only revenue source is the advertising of the surfing apparel companies.

As a last note on the efficiency of the business model, the app does not have any legal burdens and it has methods in place to ensure that the contributions of the users meet a quality standard. For example, users gain a credibility status when their surf reports are reviewed as accurate by other people, and users with wrong intentions can be pointed out to be removed from the community.

The future of GoFlow

Online reviews claim the app is very user friendly and helpful, and it has around 100,000 downloads just over a year after the start-up raised its funding (Play.google.com, 2018). On the other hand, GoFlow is simply missing enough people to create a platform effect in many surf spots around the world. Nonetheless, it is showing its full potential in certain regions of California and Brazil, where plenty of active users enjoy the benefits of this app while co-creating value (Rizz, 2018). If GoFlow gains enough users across all the surfing regions of the world, it will be a huge platform which will attract not only advertisements from the surf apparel companies but also from other companies which try to identify their brand with surfing, such as Hollister, Jeep, Samsung, etc. Surfing is a continuously growing sport whose apparel industry alone is now estimated to have a value of $15 billion per year and is expected to keep growing (Beachapedia.org, 2018). Lastly, GoFlow is also trying to expand some of its platform functions to other outdoor sport and activities, such as skating or kite surfing.

 

 

References

Beachapedia.org. (2018). Surfonomics – Beachapedia. [online] Available at: http://www.beachapedia.org/Surfonomics [Accessed 16 Feb. 2018].

Crunchbase. (2018). goFlow Surf | Crunchbase. [online] Available at: https://www.crunchbase.com/organization/goflow-surf [Accessed 16 Feb. 2018].

Play.google.com. (2018). Cite a Website – Cite This For Me. [online] Available at: https://play.google.com/store/apps/details?id=goflow.app&hl=es [Accessed 16 Feb. 2018].

Rizz, G. (2018). goFlow: Share and Discover Waves with Your Friends. [online] The Inertia. Available at: https://www.theinertia.com/surf/goflow-establishing-a-social-surfing-community/ [Accessed 16 Feb. 2018].

 

NASA: Crowdsourcing the Universe


NASA has always been considered a symbol of scientific progress. Its task, the study of the universe, is without doubt something that requires a lot of work, from all of us. NASA is aware of this and has taken one of its first steps into its own new frontier: Crowdsourcing. Since 2011, NASA has been using crowdsourcing to help them solve some of the problems that arise on the International Space Station (ISS), from coming up with solutions regarding the difficulties of astronauts exercising in space, to searching for new planets. All these crowdsourced initiatives, framed as challenges, draw people from all over the world, and to date, more than a dozen platforms exist to host the challenges.

In the past, NASA’s aversion to crowdsource has primarily been a result of its culture. NASA Senior Policy Advisor Amy Kaminski declared that “The greatest challenge the use of crowdsourcing methods at NASA has endured is in their relative newness and lack of familiarity within most of the agency. Scientists and engineers at NASA are used to particular ways of doing R&D, and this usually entails doing work within the agency or having it done by groups within academia or industry via grants, contracts, and cooperative agreements. Crowdsourcing involves opening up the R&D participant base, which introduces uncertainty even while opening new and exciting possibilities for finding solutions to problems of interest and accelerating research work”. However, NASA’s initial mental closure began to evolve with the arrival of both private space companies and the rapidly growing ambitions of politicians to reach the stars.

The New Crowdsourcing Frontier

In 2014, NASA Deputy Chief Technologist Jim Adams stated “NASA recognizes that crowdsourcing presents an extraordinary opportunity to inspire the development of transformative solutions by offering a means to engage with non-traditional sources of innovative ideas, all in a remarkably cost-effective way”. Adding to this, Steve Rader, Deputy Manager of the Centre of Excellence for Collaborative Innovation (CoECI) at NASA, explained “If you have large crowds of hundreds of thousands, or even millions of people in communities, it is likely that you actually have within those communities some very valuable high-skilled folks. The idea is that somebody who can solve your very difficult problem often does not have traditional experience”. In fact, a main reason why crowdsourcing works so well is that a lot of the time, solutions are found by people who do not have the same area of expertise as the problem.

Some of NASA’s biggest crowdsourcing initiatives were related to its desire to know more about the Solar System. For example, their lunar instruments crowdsourcing campaign focused on NASA’s desire to better understand the Moon. Similarly, its Mars campaign, aimed at college students, was designed to find resources on Mars. It started with the Mars Forum, which used IdeaScale’s technology to engage the crowd and develop ideas while answering questions. As it progressed, college students could build and submit their own robots that were able to autonomously perform mining tasks. These are just a few examples of the several crowdsourcing projects undertaken by NASA.

The last and still ongoing initiative, hosted by crowdsourcing program Zooniverse, is the hunt for Planet Nine – the large, mysterious body thought to lurk at the edge of our solar system –. Ordinary people have now joined the search, and they have made some very interesting findings. Through the project, dubbed “Planet 9 Search”, space enthusiasts and astronomers alike are given access to thousands of images taken by ANU’s SkyMapper telescope. Their task is to find anything that appears to move against the mostly motionless background of distant stars. In just three days, about 21,000 volunteers examined more than 100,000 images and classified more than 5 million objects. This is work that would have taken an astronomy PhD student four years, according to ANU astronomer Brad Tucker.

“Planet 9 Search” Project Advertisement 

Why NASA Crowdsources

Crowdsourcing can reduce costs, speed up project timelines, tap into crowd intelligence and creativity, and engage citizens at all levels of corporate and government processes. Many large corporations such as Microsoft, GE, AT&T, eBay, IBM, Apple and Sun (West 2003) and government agencies such as NASA (Lakhani, 2013), are increasing investment in crowdsourced solutions to gain the potential value of crowdsourcing as an open innovation platform, to both drive cost efficiencies and overcome resource constraints. Specifically regarding NASA, one of the aspects that makes all of this possible is that, while solving most problems requires significant scientific knowledge, the problem itself requires minimal integration into NASA’s internal operations.

How NASA uses crowdsourcing is enlightening. It allows NASA to try several different ideas at once and sort through those that work and those that do not. If you give it a thought, NASA has the kind of challenge that would make any person cringe: Get humanity beyond the sphere of Earth and explore the universe. And as if this was not enough, it all has to be done on a budget entirely controlled by politicians. This often means they get only one opportunity at constructing something, and adding to the pressure, if that device fails, the lives of astronauts could be at risk. So crowdsourcing lets them look carefully at ideas, both conventional and unique, and lets them narrow it down to the ones that work. With respect to the intellectual property (IP) of such ideas, organizers of challenges will sometimes reserve all rights to the IP of the knowledge/technology generated from the competition and applicants are always encouraged to read the terms and conditions of a challenge.

NASA’s crowdsourcing efforts are not just about finding the best idea, but also getting some of the best talent the country has to offer. It is no secret government agencies can have trouble getting the best and brightest people, and these competitions offer a look at some of the finest minds out there. Moreover, in addition to the value of ideas and talent, announcing winners and prizes is often used as a promotional and marketing tool for the organization, as it provides “good news” stories to share on Social Media. Even participants that do not win may see an increased investment in the company as a result of feeling a part of the process.

NASA 2.png

Example Tweet (Space Apps is a NASA incubator innovation program) 

From a contributor’s perspective, NASA’s crowdsourcing initiatives are appealing not only because of cash prizes, but also because they are designed towards building relationships with its contributors, possibly also offering some of them an employment contract at NASA. As teams compete not just for the cash purse, but also for the associated validation, prestige, and satisfaction that result from solving important problems, challenges can incentivize significant additional investment, leveraging the award’s impact. According to several contributors, the real reward is helping NASA solve a space/engineering problem and gaining critical thinking and skills that are highly sought by employers.

It is therefore clear that there is a lot other firms can learn from NASA’s crowdsourcing. It is much more than just a way to get external ideas: Innovation strategy can truly transform an organizational culture. As a matter of fact, to conclude, it can boldly be stated that crowdsourcing has been “one small step for its innovation strategy, one giant leap for NASA”.

 

References

“Crowdsourcing Innovation at NASA: Q&A with Amy Kaminski.” Dialogue Review (2017). Retrieved from http://dialoguereview.com/crowdsourcing-innovation-with-nasa-q-and-a/

Day, J. “How NASA is Crowdsourcing its Innovation Strategy.” Ideascale (2017). Retrieved from https://ideascale.com/24571/

Dodgson, L. “How to get involved with NASA: Crowdsourcing ideas for Mars houses, robots, and space poop.” Business Insider Nederland (2016). Retrieved from https://www.businessinsider.nl/how-to-get-involved-with-nasa-2016-11/?international=true&r=UK

Ford, Robert C., Brendan Richard, and Michael P. Ciuchta. “Crowdsourcing: A new way of employing non-employees?.” Business Horizons 58.4 (2015): 377-388.

“Implementation of Federal Prize Authority, Fiscal Year 2013 Progress Report.” (2014). Retrieved from https://obamawhitehouse.archives.gov/sites/default/files/fy2015_competes_prizes_report.pdf

Kaplan, S. “Citizen scientists may have located candidates for Planet Nine.” The Washington Post (2017). Retrieved from https://www.washingtonpost.com/news/speaking-of-science/wp/2017/04/04/citizen-scientists-may-have-located-candidates-for-planet-nine/?utm_term=.59d019290aa6

Lakhani, K. “The crowd as an innovation partner: Lessons from NASA, Harvard Medical School, and beyond.” Presentation at the TopCoder Roadshow, Johnson Space Center, Houston, TX (2013)

Pearson, D. “NASA’s Crowdsourcing Is Out Of This World.” (2015). Retrieved from https://smbp.uwaterloo.ca/2015/10/nasas-crowdsourcing-is-out-of-this-world/

“Problem Solving Approaches at NASA: Challenges, Prize Competitions, and Crowdsourcing.” Retrieved from https://www.nasa.gov/content/prizes-challenges-and-crowdsourcing-advance-nasa-s-mission-and-outreach

West, J. “How open is open enough?: Melding proprietary and open source platform strategies.” Research policy, 32.7 (2003): 1259-1285

Duolingo: Making money from your translations


Introduction

Most of you will know the app Duolingo. For those who don’t, it is a language-learning app that is used worldwide with 200 million users that can choose many languages to learn. Maybe you have tried to learn Spanish, French or another language on the app. What most people like about the app is the way it brings gamification to learning a language. Also, and not unimportant is that the app is free to use. But how does Duolingo make its money?

How did Duolingo start?

Duolingo started by a question raised by Luis von Ahn (the founder of RE-CAPTCHA and Duolingo) in 2009, wondering how the internet could be translated into every major language using the knowledge of a 100 million people for free?

People initially wondered why translations couldn’t just be done using computer translations. However, computer translations at this moment and even more so back in 2009 were not good enough to translate texts on the internet without mistakes. Besides, another option, using professional translators, would require an enormous investment that no firm is willing to pay for.

How did Duolingo manage to ‘recruit’ a 100 million people to translate the internet? The two main obstacles they faced is that there is a lack of bilinguals in the world and a lack of motivation to translate texts for free. They solved both issues with one solution.

Millions of people worldwide want to learn a new language and usually pay quite a hefty fee for doing so, either by paying for classes or for software. Duolingo lets users learn a new language for free using their app while simultaneously translating the web. As a beginning user, you’re given very simple sentences/words from the web which you must translate. The quality of your translation is then checked with the results of the translations of other users, and after a translation has been cross checked several times it gets combined into a verified translation. As you progress you will start getting more complicated texts which both helps the learner and Duolingo.

Monetization

The company was started with the concept of a fair business model for education. Currently the business model for education is that the student pays for his courses with fiat. However, many students worldwide don’t have the funds necessary to pay for education. As such they can pay in a different way by using the app and investing their time in learning the language. By doing so they create value for Duolingo by translating text on which they can monetize by selling the translations to companies who want them. Though this was the initial core revenue model, nowadays Duolingo is focusing more on gaining revenue from their Test Center Certification Program as it is not the mission of Duolingo to become a translation business but to stay an education company. Moving forward the new direction of Duolingo is emphasising on becoming an adaptive platform that tailors teaching to the strengths and weaknesses of individual learners driven by feedback from language students using the app. The ultimate goal for the company is to give every student access to a private virtual tutor with the use of their technology.

Sources:

https://techcrunch.com/2015/06/10/duolingo-raises-45-million-series-d-round-led-by-google-ventures-now-valued-at-470m/

www.duolingo.com

 

Peaks: investing your change


Do you feel demotivated seeing your interest fall to 0.05%? Would you like to invest your money but do you not know where to start? This is where Peaks comes in. Peaks believes that investing should be for everyone, not only for the happy few!

How does it work?
Peaks digitally collects your change by rounding up all your purchases to whole euros. Let’s assume you bought a coffee for €2,40, Peaks will then automatically transfer €0,60 to your investment account. If you don’t want to provide Peaks access to your account, you can also choose to transfer let’s say €1, – a day to your investment account. The Peaks App provides an easy overview of the amount saved and the current value of your investments. All you have to do is determine the amount of risk you would like to take choosing from four risk levels, where a higher risk corresponds to a higher expected return. The video below outlines the idea behind Peaks, although it’s in Dutch, I’m sure you’ll be able to follow.

Business model
The Peaks business model is based on joint profitability of both the investors and the company itself. The investors benefit since they are able to invest small amounts of money, which they would otherwise not have been able to invest due to the high one-off investment costs charged by funds (Peaks, 2017). Since many investors invest small amounts of money, Peaks can share investment costs among this large group.  Peaks itself on the other side, benefits from profits the investor makes in two ways. First, higher profit motivates investors to invest more money, resulting in an increase in fees being paid to Peaks. Secondly, higher profit motivates new customers to join the platform. With regard to switching costs, there are alternative investment platforms which accept small investments, such as ‘Semmie’. However, since Peaks is a startup financed by Rabobank, its integration with the Rabobank banking system differentiates it from competitors. According to Peaks, integration with other banks will follow soon. Hence, switching costs in terms of convenience are quite high for Rabobank customers yet slightly lower for customers of other banks.

In terms of institutional arrangements, power given to investors is limited. An interesting comparison is Dell computer. Research looked at the degree of user design customization that was optimal when selling a computer. Turns out that the majority of people actually had no idea about the technical specifications of a computer. Letting customers customize their computer using technical design parameters hence resulted in a ‘design defect’: a choice of design parameters that does not maximize user satisfaction (Randall T., 2005). Such design defects can be mitigated by using ‘needs based interfaces’: instead of asking would you like “512MB,DDR,333MHz 2 Dimms or a “512MB,DDR,333MHz 1 Dimm” memory they would ask “do you find the performance of program X important”. In a way, the same can be applied to investing in the stock market. Since the target group of Peaks is unfamiliar with investing money and has little knowledge about the financial market, they are given only a limited degree of freedom. The only question investors are asked is, ‘how much risk would you like to take’?  Based on this level of risk, four different funds are possible: mild, spicy, very spicy and hot. According to your risk preference, the ratio of stocks versus bonds is set automatically. Using this ‘needs based’ approach rather than a ‘parameter based’ approach limits the chance of a design defect occurring and hence increases user satisfaction (Randall T., 2005).

Looking at the institutional environment, the social norms dimension is particularly applicable. Peaks plays into the current movement of Corporate Social Responsibility by banning funds that invest in controversial businesses such as weapons, alcohol/tobacco production and pornography. In terms of polity and judiciary dimensions, Peaks has a permit and is being supervised by the Dutch Authority for Financial Markets. (Peaks, 2017)

Peaks 2

Sounds great! Why not invest?
Empowering everyone rather than just the happy few to get a return on their savings sounds like a great cause. Moreover, expected returns in terms of percentages sound decent. However, after deducting the yearly costs, returns of some of the portfolios become negative. Considering that people investing at Peaks usually have little affinity with investing money, having such low transparency is appalling. For example, if you would like to invest for a period of 1 year with an investment of €30 a month your returns would be as follows (Drabbe, 2018):

  • Mild portfolio: – €3,79
  • Spicy portfolio: – €2,02
  • Very Spicy portfolio: – €0,10
  • Hot portfolio: €1,82

In conclusion, if you want to make money using Peaks you’re going to have to invest more than €30,- a month, which contradicts the whole idea of investing your change. It’s a shame since I believe the idea has a lot of potential! What are your thoughts on the topic? Would you invest your money using Peaks?

Sources:

Carson S. J., D. T. (1999). Understanding Institutional Designs Within Marketing Value Systems. Journal of Marketing Vol 63, 115-130.

Drabbe, M. (2018). Peaks: beleggen met je wisselgeld. Retrieved from Consumentenbond: https://www.consumentenbond.nl/sparen-en-beleggen/peaks-beleggen-met-je-wisselgeld

Peaks. (2017). De app. Retrieved from Peaks: https://www.peaks.nl/de-app/

Randall T., T. C. (2005). Principles for User Design of Customized Products. California Management Review.

The world is your (peer)space


Want to throw an awesome party or work in a creative environment? But you cannot find the perfect space? Today, we live in a world where you can easily rent out your house, car or offer your skill set to others in exchange for a fee. So, why can’t you rent out your office space? Look no further. The app Peerspace will help you find your perfect space!

Tell me more

Peerspace, launched in 2014 and founded by Rony Chammas and Matt Bendett, is an online peer-to-peer marketplace that connects individuals and businesses to find one-of-a-kind spaces that otherwise go unused (Peerspace, 2018). The idea emerged when Rony was a student at NYU trying to find meeting places, and saw how much open and underutilized space there was (Bercovici, 2014). Finding spaces with benefits for both parties mostly happen through word-of-mouth or platforms as Craigslist, which is inefficient. Therefore, Peerspace’s mission is to find and book short-term space through an easy and transparent process (Peerspace, 2018). Whether looking for personal or professional space, Peerspace is the solution for finding unique locations for meet-ups, pop-ups, and classes to off-sites or brainstorming sessions. Currently, Peerspace is available in the USA and the start-up has raised 18 million dollars from funders (Magistretti, 2017). The popularity of the platform goes not unnoticed as 60,000 people from world-class companies (Google, Vice) attend a Peerspace booking every month (Peerspace, 2018).

 

Continue reading The world is your (peer)space

“Tinder for leftovers”, or how OLIO helps you find the best match for your unwanted food


You bought too much food this week but tomorrow you go on vacation, so you don’t know what to do with it? Or have you changed your mind for what to cook and want to get rid of the food you have in your fridge but you feel bad throwing it away? Maybe your unwanted veggies will be your next-door neighbor’s treasure but you never talked to them before so you think it might be awkward offering them your food? Worry no more, OLIO will solve your problem and save your food from being wasted!

What is it?

OLIO is an app that started the food sharing revolution in 2015. Classified as the “tinder for leftovers” (Vaughan, 2017), OLIO helps you connect with people around you, as well as with local businesses in order to share your unwanted food with others, instead of throwing it away. The idea for developing the app struck Tessa Cook in December 2014 while she was packing up her apartment in Switzerland, ready to move back to the UK. As it normally happens at moments like this, she had food left in her fridge that she couldn’t finish but also did not want to throw away. After realizing how much food ends up being thrown away in similar situations, she teamed up with a friend of hers, Saacha Celestial-One and the two of them started working on the idea of OLIO. The vision guiding the two women was to create a world in which “nothing of value goes to waste, and every person has enough to eat” (Olioex.com, 2018). Even for the short period of its existence, the app has become a huge success. Currently it has more than quarter million users in 41 countries worldwide, and nearly half a million food pieces have been saved since the app started.

How does it work? 

The way OLIO works is simple and intuitive. Each user has a profile page where they can put a photo and briefly describe who they are. After setting up their profile, app users just need to add a photo and description of the item they want to sell, as well as specify from where and when the item can be picked up. The app has a browsing catalog with all items available near the user. Once the users have found a product they like, they simply need to request it and arrange convenient time to pick it up with the seller via a private message. Users can also rate and review other users based on the experience they have had with them. This also facilitates a safer sharing process, as users can decide for themselves with whom to share their food based on the other’s profile and ratings.

Reducing food waste through shared economy

OLIO is an example of how shared economy can be used to tackle one of the major problems societies face today: food waste. Studies shows that as much as 50% of the food produced globally is never eaten and is thrown away, making the food waste a $1 trillion problem (Olioex.com, 2018). By providing a C2C platform that connects people who want to share their food, the app does not only help in cutting food waste, but also brings people, especially neighbors, together and builds a food sharing community. The founders initially did not raise any revenues, as the main goal was to grow their network and gain more popularity. Currently, the revenue-based business model is followed, as the app charges commission fees for those items that are paid directly through the app or for donations made through the app. Nevertheless, buyers and sellers are also given the opportunity to just use the app to connect with each other without making any payment transactions through the app. In these cases, sellers can post their unwanted food items for free, while buyers derive a benefit by getting food items for free or for  super low prices (Nair, 2016). In this way joint profitability is achieved for all parties involved.

What’s next?

After seeing how successful their OLIO initiative has become, the founders took a next step by teaming up with two charities, Feedback and FareShare in order to increase the reach of their fighting-food-waste efforts. A new addition to the app allows users to add not only food, but also other household items and to request a pay-as-much-as-you-like donation for one of the charities (Olioex.com, 2018). The founders have also started collaborations with more than 11,000 volunteers who have the mission to spread OLIO’s vision and goals around the world.

The food sharing revolution that OLIO has started is now also embraced by other companies. Leftoverswap, Foodsharing.de and Eatro are among the other apps offering similar ways in which people can share their food. Despite the fact that competition for OLIO is growing, the rise in other initiatives supporting food sharing can only be seen as something positive, as it brings society a step further in its fight with food waste!

 

References:

Nair, P. (2016). Food waste: there’s an app for that. [online] Growth Business. Available at: http://www.growthbusiness.co.uk/food-waste-theres-app-2543941/ [Accessed 2 Feb. 2018].

OLIO. (2018). About. [online] Available at: https://olioex.com/about/ [Accessed 2 Feb. 2018].

OLIO. (2018). Charitable donations. [online] Available at: https://olioex.com/charitable-fundraising/ [Accessed 2 Feb. 2018]

Vaughan, P. (2017). The app that’s kickstarting a food-sharing revolution. [online] Huck Magazine. Available at: http://www.huckmagazine.com/art-and-culture/olio-app-food-free-socially-conscious-waste-sharing/ [Accessed 2 Feb. 2018].

GE crowdsourcing platform – Let’s set the collective brain on fire!


We live in a fast-paced digital world and it can be challenging for companies to keep up with the speed of today’s ever changing digital era. However, new information technologies have also empowered more technologically savvy businesses by giving them new means to operate, promote their products and services, and engage with customers. One company that is constantly taking advantage of these new tools is General Electric (GE), an enterprise who has succeeded in part because of its willingness to take risks and embrace innovative technologies. The most recent example of this mindset is Fuse, their new open innovation platform that launched in late 2016. It is basically an open crowdsourcing platform, which allows users from all around the world to collaborate with each other and work with GE engineers to solve meaningful technical challenges.

How does Fuse work?

The first step is for the Fuse team to translate GE customers’ needs and “pain points” into projects on the Fuse platform. Whereas most projects are straightforward and thus directly released in the form of challenges, some appear to be less clear and hence are uploaded on the “Brainstorming Section” of the Fuse platform as “potential challenges”. These potential challenges include a (rather extensive) description of the problem to be tackled as well as precise requirements for the solution, and contributors are asked (1) whether they would be interested in such a challenge, and (2) what additional questions the Fuse team should answer before launching the challenge. Based on the feedback received, the Fuse team might decide on further actions. When released, each individual challenge comes with a description of the problem, clear requirements for solution submissions, judging criteria, a timeline, a description of the prizes for the winners, and the official rules of the competition (including property right issues).

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Example of a Fuse challenge

In a second step, contributors from all around the world are invited to submit innovative contributions. Note that even though anyone can sign up and take part in challenges, the very technical nature of the challenges serves as a skills-based filtering mechanism as only people with a certain degree of knowledge in engineering would be able to understand the challenges. Once on the Fuse platform, anyone can have access to all the relevant information related to the challenges, however only registered users are allowed to submit entries. During the whole duration of the challenge, contributors can use the discussion board to brainstorm together or ask the competition holders questions. Not only does the Fuse team rapidly answer these questions and provide regular feedback/input, but they also organize “live Q&A sessions”, during which the participants can submit questions that are answered live in a video feed.

 The final step is for the Fuse team to evaluate the submissions, select the winners (generally the three best entries) and allocate the money prizes. The interesting entries are also forwarded to GE’s technical team, where they are further developed into implementable solutions.

Efficiency Criteria

In less than two years, GE succeeded in creating an innovative community and successful products from their contributions (Picklett, 2017). This was made possible for the following reasons: combination of extrinsic and intrinsic incentives, good management, and well-structured governance including the mechanisms recommended by Blohm et al. (2018).

From a contributor’s perspective, the Fuse platform and its challenges are interesting not only because of the cash prizes, but also because it is designed towards building long-term relationships with its contributors. For instance, competition winners actually have an opportunity to further work with GE engineers on implementing their designs (Kloberdanz, 2017). In addition, there is also an attractive physical part to Fuse projects, which consists in a micro-factory in Chicago designed for rapid prototyping, small-batch manufacturing, and modular experimentation (Davis, 2017). This faculty will be open to contributors and can constitute an incentive for them to become part of the Fuse community as it is a good opportunity to bring their ideas to life, work with GE professionals, and meet like-minded innovators. Finally, the Fuse challenges are also a good opportunity for contributors to collaborate with other brilliant mind, expand their business network, build their professional reputation, and gain recognition from their peers.

From GE’s perspective, the Fuse platform is a new source of innovative and ideas, which can speed up content creation, cut R&D costs for the company, and provide GE with an opportunity to spot talents who might be valuable additions to their team. But how is GE able to overcome the challenges inherent to crowdsourcing (e.g. huge quantity, low quality, free-riding behaviour, risks of sharing information)? First, due to the technical nature of the Fuse challenges, the clearly defined guidelines provided to the participants, and the rapid feedback/additional inputs provided during the competition, GE ensures that only a manageable number entries of a certain quality are submitted, thus facilitating the evaluation process. The platform is also clear about the transfer of PI rights, which avoids troubles along the way. Second, for most challenges, challenge, entries are private and only viewable by the creator, admins, and judging panel. As a result, GE is able to avoid free-riding behaviours. However, contributors are still able to communicate with (and help) each-other via the discussion board, and the Fuse team makes sure to encourage the discussion with feedback and additional information, hence allowing contributors to still learn from each other. Finally, even though opening up GE’s internal workings/information of some products in order to run these challenges can be risky, the company acknowledges that “there are certain risks you just have to roll with if you want to make progress and that willingness to take those risks is what makes this exciting.” (Davis, 2017). This quotes shows that GE understands the need to willingly take risks in order to continuously transform the company and, so far, Fuse seems to be worth it as GE reunited more than 8000 contributor successfully implemented several ideas generated by the platform in less than a year (Davis, 2017).

In summary, the joint profitability criterion is met as the Fuse platform creates value for both GE and its contributors. Furthermore, the costs linked to this innovative business model are relatively low as the Fuse team only consists of 4 employees based in Chicago (Pickett, 2017). However, as the platform matures, hosts more challenges, and attracts more contributors one can assume that the number of employees will have to increase. Still, the costs-benefits ratio should remain interesting compared to doing everything in-house. Finally, the legal concerns are taken care of thanks to inclusion of PI agreements in the official rules of the Fuse challenges, and the social norm dimension is met as GE is a well-known, reputable brand, hence building trust with contributors.

References

Blohm, I., Zogaj, S., Bretschneider, U., & Leimeister, J. M. (2018). How to Manage Crowdsourcing Platforms Effectively?. California Management Review, 60(2), 122-149.

Davis, B. (2017). How GE is using co-creation as part of its digital transformation. Retrieved from https://econsultancy.com/blog/68902-how-ge-is-using-co-creation-as-part-of-its-digital-transformation

Fuse. (2018). Fuse Platform. Retrieved from https://www.fuse.ge.com

Kloberdanz, K. (2017). Working The Crowd: This Fuse Will Set The Collective Brain On Fire. Retrieved from: https://www.ge.com/reports/working-crowd-fuse-will-set-collective-brain-fire/

Pickett, L. (2017). GE Fuse’s open innovation platform invites NDT professionals to co-create solutions. Retrieved from https://www.qualitymag.com/articles/94304-ge-fuses-open-innovation-platform-invites-ndt-professionals-to-co-create-solutions

What’s your recommended size?


Shopping online is more convenient, however it becomes tricky when shopping for clothes as we’re not able to try the clothes on. Hence, we purchase items in the size we think fits us best. This, unfortunately, may not always work in our favour. Often, we receive an item that doesn’t fit us well. We then either return it, store it at the back of our closets hoping one day it will fit, or give it to a friend. Essentially, a waste of time and money.

ASOS, a large online fashion retailer, just launched a new recommendation tool that helps solve this problem for their shoppers.

What is it?

The new tool provides customers with a personalized recommendation of a size it thinks will fit them best. It suggests a size based on customers’ past purchases and returns. Here’s how it works (Cherrington 2017):

  1. A recommended size instantly appears when the customer views an item.1
  2. Clicking the link shows the customer what the recommendation is based on.2
  3. Customers also have the option to provide input to improve recommendation accuracy by: (1) selecting which past purchases didn’t fit, (2) adding height, weight, age, and desired fit type (very tight to very loose), (3) selecting tummy shape, hip shape and bra size.

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If a customer is new, they can add in their height and weight and discover which size similar customers purchased and did not return.

ASOS has received a backlash for introducing this new tool. Some women have taken to Twitter to vent their frustrations that the tool is insulting and inaccurate. (Cherrington 2017)

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Others have responded more positively to the new tool, as customers no longer have to guess which size would fit and it saves the time and effort that would have been spent on returns and exchanges. It not only provides a personalized recommendation to customers, but it also includes the input of customers to produce better results, making customers feel like they are part of the creation process.

ASOS’ business model is to provide their customers with engaging content and experiences, great fashion at a great price and excellent service through an “effortless online and mobile shopping experience”. (ASOS 2017) More than just a fashion retailer, ASOS prides itself as a technology company – constantly innovating to improve service and customer experience. This new recommendation tool is a strong reflection of their business model and values.

Efficiency Criteria

The joint profitability criteria is met as this recommendation tool improves the joint value for both ASOS and its customers. While some customers are currently unhappy with this new tool, once ASOS improves the system to deliver more accurate recommendations, customers are likely to appreciate the tool more. It saves them from spending money on clothes that don’t fit and will increase customer satisfaction.

The investment cost of this new recommendation tool is low as the company only needs to improve the recommendation system based on feedback. The company also benefits from the increased customer satisfaction and sales from customers that previously abandoned their shopping cart due to size concerns.

The feasibility of the required allocations is also met. The polity and judiciary dimensions of the institutional environment do not relate directly, however the social norms dimension is met as ASOS has a strong reputable brand,  thus creating trust with customers.

References

ASOS 2017, ASOS Story, ASOS Plc, viewed 9 March 2017, <https://www.asosplc.com/asos-story&gt;.

Cherrington, R 2017, ‘ASOS Is Guessing What Size Its Customers Are, And They’re Not Happy About It’, The Huffington Post, 24 January, viewed 9 March 2017, <http://www.huffingtonpost.co.uk/entry/asos-size-recommendation_uk_58871c69e4b02085409924c3&gt;.

 

 

 

Arcbazar, designing through a contest


Always wanted to change your house, your garden or just want to switch your interior up, but you did not know how? Arcbazar is the answer. It is the number 1 crowdsourcing marketplace for architectural, interior and landscape design projects and let you crowdsource your projects to over 10.000 architectural, interior and landscape designers from around the world.

Arcbazar was founded in December 1010 by Imdat As, Ana Batista and Halit Ciftci, after realizing that all too often clients could not find an easy and affordable way to find competitive architectural design services, while at the same time, designers had a hard time to connect to clients and use their design talent. Their website arcbazar.com is the first website that holds online competitions for small to medium scale design projects. Their aim is to help their peers, young designers and architects find exciting design opportunities from design conscious individuals.

Afbeeldingsresultaat voor arcbazar

Starting your project

At Arcbazar, any client can start a design competition. Here you can fill in your title and your project type and Arcbazar will already come up with a list of deliverables that designers should come up with. You can alter this if you need any specific document or if you want less deliverables.  After this basic information, you are asked to describe your project. Arcbazar even helps you with some questions that can be answered in order for the project information to be more complete. Here the project can be described, but also your goals, challenges and specific requests to the designers.  You set the deadline, fill in an award and launch your project. If you’re still in doubt about the project, you have 24 hours of free cancelation.

How should you reward the designers?

The minimum award of your project is given by Arcbazar to make sure the awards are fair to the designers. However, this minimum amount is nog the ‘perfect’ award, Arcbazar also suggests an ideal award for your design competition, but you are free to choose your own. This award also should be payed up front, to make sure the designers get rewarded for their effort. One of the new things of this contest is that more than one designer will win a price. The 1st prize winner you select will get 60% of your award, the 2nd prize winner 30% and the 3rd prize winner 10% of your award money. If you feel bad for other designers which idea you also liked very much, you can give them an extra bonus. If there are no submissions at your deadline, the competition is void and you will get your money back.

Interaction between clients and designers

You can keep in contact with the designers through a wall where designers can ask you questions about your project. All questions/answers in the wall are public, so every designer gets the same amount of information. If you want to inform the designers even more during the project, you can also post any text/images on your project wall. Designers who signed-up for your project will automatically get notified.

How to select your winner?

It is hard to select a winner of your competition. Therefore Arcbazar created a public voting feature, which you can select after the deadline. Users of Arcbazar can then vote and evaluate your project designs and give you valuable feedback on your submissions.

What’s in it for the designers?

Of course the money you can win is a big motivation for designers to participate. However Arcbazar also has a point system. To motivate the designers, designers can get points when voting for other projects, signing up to a project, submitting an idea to a project and when winning prizes. To motivate them to actually submit an idea after they signed up for a project, they can also get a deduction of points when not submitting to a project they signed up for. There is a top 50 designer page on the website linking to their profiles, so the more points you get, the more exposure you get.

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Designers can even earn money by using affiliate company products in their design. At the end of each year, Arcbazar will share 10% of all product sales proceeds with all designers proportionally.

Kérastase Hair Coach: the smart hairbrush


When it comes to hair, it not a secret that especially women spend big time. In U.K women for example spend around £350 per year on hair salons- excluding other hair treatments and hair products(www.independent.co.uk). Healthy shiny hair is the dream of every woman and they will try every product and treatment to achieve it. It appears Kerastase heard all these wishes, and recently introduced the Kérastase Hair Coach Powered by Withings.

How it works

The smart hairbrush incorporates numerous fancy technologies that analyze and monitor the hair’s health. The first step is the assessment of the hair condition. The hairbrush is able to provide a hair quality score. Essentially, the hairbrush is equipped with a microphone and conductivity sensors that make all the evaluation. On the one hand the embedded tiny microphone detects the sound of the brush tines working through the hair. Then these auditory data are transmitted to a mobile app, where frizziness, dryness, split ends and breakage is detected with the help of a smart algorithm. On the other hand, the conductivity sensors recognize whether hair is wet or dry (because sound waves of wet hair imitate the sound of smooth and less damaged hair). Then combined with the data accumulated by the microphone the app is able to offer a more accurate reading.

The second step is the estimation of  the brushing quality. With the help of elegant tools (accelerometer, a gyroscope, and 3 axis load cells) the brush detects your brushing patterns. Basically, it evaluates the force & rhytme when combing the hair, analyzes the gestures and counts the strokes. The info is once again sent to the application that in turn make specific recommendation. In particular, the app is able to provide insight on how to avoid damaging hair, how to improve brushing habits and how brush use impacts the quality of hair.

The final step is for users to receive personalized advices and product recommendations. The app even takes into account external factors (humidity, temperature, UV and wind) before combining it with the rest of the accumulated data. Hence, thorough insight and more accurate personal consulation is given to the consumers. Based on the users’ hair profile the app then proceeds to recommend the appropriate Kerastase products and routines.

Value co-creation

Users brush their way into co-creating value by providing the necessary data for the smart algorithm to make the diagnosis and to subsequently provide personalized recommendations. User’s brushing habits, hair quality and geo location data (for external factors such as weather) are gathered and drive the whole process. Successful diagnosis leads to better customized advice and more accurate product recommendations.

Kerastase benefits by potentially increasing its products sales and by better targeting consumers. The first source of profit is the hairbrush itself. Subsequently through the hairbrush and the app the company can satisfy the needs of its customers by offering personalized advice and recommending the right hair products to the right consumer (instead of depending on hairdresser to recommend and promote its products).

Efficiency criteria

Even though it is a smart brush, users will still use it the same way they would use any other brush. Hence it is an easy to use product and no extra amount of effort is required. The hairbrush however is pricy (at $200), which means that users should spend a respectful amount of money to acquire it. Nevertheless, on the long run users could potentially save money and time.Improving their hair’s health means less visits to hair salons and less expenses on hairdressers, hair treatments and on wrong products.

For the company the hairbrush might be a new source of income, provided that users embrace it and are willing to actually spend $200 on a hairbrush. If indeed users are lured to try it the company can subsequently drive further its hair products’ sales and its revenue. The generated revenue will then have to cover the R&D costs, which should be quite high since it is an innovative technological product. Last but not least, by exploiting the collected data the company can increase its insight and use them for future developments.

Overall, time will tell if users indeed will be impressed by this innovative technology, invest on it and engage with it. Compared to conventional brushes the Kerastase smart hairbrush is without a doubt substantially more expensive. However, consumers and predominantly women already spend around $80 for other styling tools (e.g. hair straighteners), hence compared to them the hairbrush does not seem that expensive. There are two key factors that would determine its success. Firstly, whether the company will succeed in convincing the consumers to spend more on the short run and save more on the long run. Secondly, it has to ensure that users will actually buy the products that the app recommends (users could easily turn to another brand to e.g.  buy a shampoo for damaged hair). Since Kerastase hair products fall in the luxurious category and are thus pricy, the app could perhaps include more economical products as well. These products should however belong to L’Oréal which is Kerastase’s parent company(something that might lead to product cannibalism however it could also increase the sales of the L’Oréal company products over those of its competitors).

References

http://www.independent.co.uk/life-style/fashion/news/the-staggering-average-lifetime-spend-on-cosmetics-and-grooming-revealed-9709654.html

http://www.kerastase-usa.com/connected-brush

https://www.withings.com/us/en/products/hair-coach

Cheers to a more sustainable world


As one of the world’s largest brewers, Carlsberg wanted to create a greener beer. The bottles of the Danish brewer have already a green color for decades, but the ‘Cheers to Green Ideas’ competition was launched to improve the environmental impact of beer. The company has incorporated an open innovation model and asked consumers and companies from all over the world to submit ideas about greening the beer. Using the wisdom of the crowd, Carlsberg wanted to have a positive effect on the environment through drinking beer.

 

“We believe that business has a leading role to play in developing concepts such as the circular economy or closed-loop practices to drive positive change.” – Cees ‘t Hart, CEO, Carlsberg Group

 

Carlsberg is aware of their position in today’s world, and therefore know that they can contribute to a more sustainable environment. To achieve this, they created an open innovation model. They opened op for external ideas and collaborations. For instance for the ‘Cheers to Green Ideas’ competition, with the collaboration with Sustainia, a think tank that wants to create a more sustainable future. Together, Carlsberg and Sustainia wanted to build on the world of tomorrow through launching a sustainability competition in 2015.

 

The challenge

In 2015, Carlsberg announced the ‘Cheers to Green Ideas’ competition. During a three-week period, consumers, firms, and entrepreneurs from all over the world had the possibility to submit their ideas about making the Carlsberg’s beer more sustainable. The competition highlighted three key challenges to consider: how to package beer in an eco-friendly way, how to increase recycling, and how to use less water and energy during production. In total, six finalists were selected out of the 162 submitted ideas by a Carlsberg jury. Two awards were to handed out to the best ideas: Cheers to Green Ideas Award, mainly intended for companies and entrepreneurs, and the JC Jacobsen Special Award, intended for consumers.

 

Carlsberg-will-soon-serve-beers-in-cardboard-bottles-1

 

From closed to open

This competition shows that Carlsberg has an open innovation model. They are open to collaborating with other companies and organizations, and the input of consumers. Even though many companies benefit from the transition from closed to open, this often does not go without resistance, and therefore does not happen overnight. The process often faces organizational, social, and psychological barriers.

 

It’s a change process

Opening up an organization requires change, demanding for a different mindset. While changing, firms can face various barriers. Organizational barriers can be encountered with all activities that have to do with implementing co-creation (complex governance, operations, intellectual property etc.). Also, there can be psychological and social barriers, which can occur in a team or among employees (inertia, fear of the unknown, not invented hear syndrome etc.).

 

organizational-change

 

Get ready for co-creation

Managing the process from closed to open well can result in a profitable business, but where should firms pay attention to? Using the following steps can help to overcome the aforementioned barriers.

Start with why: explain why change is need

Shrink the change: divide the change into small steps

Go for direct result: generate quick wins along the process

Cut the leash: give autonomy and show value for individuals

Do it together: create a feeling of unity and shared identity through team building to create trust and encourage people

Discover the feeling: show other successful cases to let people experience it to make them more at ease

Set the scene: provide a place by literally creating a co-creation environment apart from the daily business, inside or outside the company walls

Make it happen: incorporate the change in every activity and decision to make it a natural behavior

Get the board in: make sure higher management support the change and let them show their support with a rewarding system

 

Following these steps can helps firms to overcome barriers from going to an open business model and have successful co-creation competitions just as Carlsberg.

 

References

Carlsberg, 2015: https://carlsberggroup.com/news-archive/carlsberg-launches-cheers-to-green-ideas-crowd-sourcing-campaign-and-awards-the-best-sustainable-beer-solutions/

Carlsberg, 2016: https://carlsberggroup.com/sustainability/sustainability-at-carlsberg/

GlobeNewswire, 2015: https://globenewswire.com/news-release/2015/11/26/790517/0/en/Finalists-revealed-in-Carlsberg-s-Cheers-to-Green-Ideas-Award.html

Fronteer, 2011: http://fronteer.amsterdam/media/uploads/2016/10/161012-FRONTEER-WHITEPAPER-2.pdf

Sustainia, 2015: http://www.sustainia.me/carlsberg/#solutions

Sutainia, 2017: http://www.sustainia.me/about-sustainia/

Sustainable brand, 2015: http://www.sustainablebrands.com/news_and_views/collaboration/ hannah_furlong/carlsberg_saying_cheers_crowdsourced_solutions_sustainab

DayMate: for structure in our daily lives


Do you recognize these situations where you have a lot to do, or just simple have some tasks you keep on procrastinating? Your App Store probably offers a lot of these ‘to do’ applications. DayMate is a new arrival in this ‘to do’ industry but offers more than the mainstream ‘to do’ applications. DayMate aims to provide structure in your daily life, which especially comes in handy for people whom have difficulties with remembering chores or are chaotic-minded. The Dutch application DayMate is the follow-up of the already known application Assist Help. Assist Help was developed by Annemiek Modderman, whom son is suffering from ADHD. People suffering from ADHD face difficulties with applying structure in their daily lifes which leads to malfunctioning of their wellbeing. AssistHelp was already a great success for these people, however, DayMate is optimized for special use by using a clear standard setting and look&feel.

How does it work?

You simply add a task, by naming it and choosing an icon that comes with it. The icon appears in the center of the screen when the task is ‘active’ at the moment. There is a standard setting of 18 icons such as a washing machine (for doing the laundry), a trash bin, a Euro-sign and so on. The user specifies the begin and end time of the task and specifies on which days this certain task occurs. DayMate is especially designed for recurring tasks, in order to make your daily life more structured. That is also the reason why the user cannot set a specific date, because it should reoccur on specific days, which makes DayMate not an application for reminding certain activities.

Any weaknesses or strengths?

In the weekplanning, the user can see the coming tasks for that specific week, however DayMate only allows you to see the planned tasks per day, and does not provide a whole overview. Which is in my concern a pitfall of the application. A strength however, is the special support extension of the application. Users can assign a supervisor, whom keeps up to date with your planned tasks and can see your progress by using a certain ‘sensitivity measure’ which is basically a chosen smiley by the user of his/her mood.

So all together..

DayMate’s charm is especially its charisma and simplicity. DayMate can be a useful application for anyone who wants to bring some structure in his/her life, because you will be reminded with simple icons and notifications to perform a set of operations. For people with autism spectrum syndrome DayMate ensures greater clarity, especially with the tasks feature and setting apart of a supervisor. The clear design without too many bells and whistles, makes sure you do not get distracted.

References:

http://www.daymate.nl

http://www.iculture.nl/apps/review-daymate-structuur-activiteiten/

 http://www.autisme.nl/autisme-nieuws/oktober-2016/nieuwe-nederlandse-app-daymate-geeft-rust-in-je-dag.aspx

SamenInGeld, a crowdfunding platform for mortgages.


SamenInGeld is a Dutch platform built specifically with the goal to crowdfund buildings and homes using actual mortgages. As with most crowdfunding platforms, the focal group of projects are those that cannot find funding at the traditional places like banks and other traditional mortgage lending businesses. Among the projects funded on this SamenInGeld are entrepreneurs that cannot get a mortgage through a bank due to inconsistent income and small time project owners that want to buy and renovate a building so they can use the building as a source of income through rent payments.

The advantage of this platform is that they managed to secure a AFM license which is legally required to officially offer mortgages in The Netherlands.

Business Model

SamenInGeld charges 0.5% of the total investment when the projects start and 0.25% every year the project is active to the money borrower. This is their primary source of income to support the platform. This means that for an investment of €100.000, they will receive €500 + €250 for 14 years = €4000.

The platform charges no fees to investors over their received interest, except for a small fee of €0.25 for every withdrawal from their account. This won’t make the platform owners rich though, since money lent cannot be withdrawn for 5-15 years.

 

To manage the risk of their investors, SamenInGeld allow loan seekers to split up the investment in different layers of risk and return. Some investors seeking higher profits might choose to take a higher potential reward by investing in a phase that will be paid later in the event of payment failure by the loan takers.

 

Legal requirements

Your author for this blog post is not in the slightest an expert on AFM regulation regarding private investment in mortgages, but I will do my best to use the sources available to assess the legal requirements of the platform and whether they conform to regulations.

Among the requirements to be met is the investor test. Companies operating under an AFM license that want to receive investments from private crowdfunders for investments higher than €500 need to test their potential investors on some their knowledge on the “risks of the project, crowdfunding in general and the specific platform” (https://www.afm.nl/nl-nl/professionals/doelgroepen/crowdfundingplatformen/toezicht/vereisten)

SamenInGeld matches this requirement. The funny thing is that the AFM makes the platform responsible for the review of the test and keep the requirements of passing rather vague. There are other requirements listed by the AFM like an €80.000 cap of total investment and a warning for investors to spread their risk. SamenInGeld meets those and other requirements by listing them clearly.

Conclusion

The running costs for the platform are quite low, and the business model allows for a steady flow of income for a long period of time (5-15 years). SamenInGeld smartly does not charge the investors a lot for investing in the platform, making the investment interesting for potential investors. The platform adequately counters legal repercussions by following the AFM guidelines.

 

Sources

https://www.afm.nl/nl-nl/professionals/onderwerpen/crowdfunding-overig

https://www.sameningeld.nl/wp-content/uploads/2016/09/Investeerderstoets_SamenInGeld.pdf

https://investeren.sameningeld.nl/page/how-it-works

https://www.afm.nl/nl-nl/professionals/doelgroepen/crowdfundingplatformen/toezicht/vereisten

You cover me, I cover you


 

Eventually, every individual is obliged to join an insurance company to cover yourself for the costs of for example damage or injury. Problems of such insurances are, amongst others, the high premiums, even though you might not even need insurance that year and bureaucracy. Wouldn’t it be great if you were able to set the price, rules, premiums and claims yourself together with a group of people?

Teambrella
Teambrella is a platform that is designed for peer-to-peer insurance service and backed with Bitcoin. Users have exclusive control over all the aspects of insurance to make it fair and transparent and to cope with the inefficiency of current insurance services (Kastelein, 2016). Users are able to form or join teams of different sizes online to cover each other and in which each peer is both a provider and consumer. The teammates decide how risky each person is and pay according to that.

Schermafbeelding 2017-03-10 om 17.45.08

The framework includes a decision-making layer, which consists of a server for communication and voting, and a payment layer, which is based on Bitcoin technology. The voting process exists to make sure all users have mutual control over the insurance, including new members, risk evaluation, rules and processing of payments. It is also possible to appoint proxies to vote on your behalf, but you have the casting vote. When you pay more for other teammates’ claims, your vote weight grows. Bitcoin is used as a mean of providing coverage and payment of reimbursements in order to ease the burden of payments. Each premium payment is a partly reimbursement of a claim and these payments are enforced by distributed wallets that prevent spending that is not sanctioned by the other peers. After voting, the servers automatically prepare a set of transactions from these distributed wallets of the providers to the submitted claim of the user (Kastelein, 2016).

Schermafbeelding 2017-03-10 om 11.59.36.png

Efficiency Criteria
The utility for the consumers is the fact that it is easy to use and access is available anyplace and anytime. It is free to sign up and consumers have full control over getting certain claims funded. Besides that the investments are very low. Consumers are able to get insurance at low costs and keep all the invested money when no claims are submitted. Additionally, the providers are able to vote which claim to back, so they perceive all the incurred costs as fair and they only pay for trusted members. In this way, users will be willing to switch to Teambrella, because it maximizes the joint profitability.

Teambrella is feasible and takes care of several institutional arrangements. The platform is fair, because it enforces the Golden Rule of ‘treat others the way you want to be treated’ and it aligns every teammate’s interest. Besides that, the platform is transparent. You see where the money goes and every decision in the team is made by discussion and voting, so every user has control. Furthermore, the platform is affordable, because no middlemen are present (teambrella.com, 2017). Also, the platform takes care of several concerns about security, privacy, fraud, failure, hacks, scams and bitcoin volatility. Finally, the founders calculated several coefficients and ratio’s, which make the platform solid (Paperno et al., 2016).

Also the institutional environment is taken care of. No contracts, obligations or policies are present. Teambrella is no business of insurance, so does not need a license. Furthermore, Teambrella resolves conflicts through its own tool; the alignment of interests and standards of treatment.

Schermafbeelding 2017-03-10 om 17.45.16.png

Teambrella makes non-transparent insurance companies unnecessary and opens up a completely new field of trustworthy and demanded peer-to-peer markets.

References
Kastelein, R. (2016) ‘Teambrella – A Peer to Peer Insurance System Using Bitcoin. Retrieved from: http://www.the-blockchain.com/2016/05/09/white-paper-teambrella-peer%C2%AD-to%C2%AD-peer-insurance-system-using-bitcoin/, 10th of March 2017.

Paperno, A., Kravchuk, V., Porubaev, E. (2016), WhitePaper: Teambrella: A Peer-to-Peer Insurance System.

 https://teambrella.com, 8th of March 2017.

 

Seniors go Klupping: An innovative solution to reduce perceived loneliness of an aging population.


Can you imagine that one of your grandparents uses Tinder? Probably a lot of people do not even want to think of the idea, nevertheless a Dutch startup does! Addressing a very relevant issue in most developed countries, a continuously aging population, Klup tries to solve a corresponding and increasing phenomenon: the feeling of loneliness.

How does it work?

At first it sounds like a controversial concept, but as soon as the intension becomes clear people understand the idea. Basically the app works similar to the well-known dating-app Tinder: a profile is based on a picture and an indication of what people are looking for. Users, called ‘Kluppers’, can determine a location-range in which they are looking for others. If another Klupper is found, the user can like this person’s profile and in case of mutual interest, the users have a match and are able to start chatting. But from this point forward, any similarity stops since Klup only focuses on connecting people for friendships, not love-affairs. In addition, users are also able to directly invite people in the vicinity for a self-organized event.

The target group of the app are seniors of 55+ that want to be active but do not have someone to share an experience with. Since the app is freely available, the founders hope to earn money in the near future by even providing premium-accounts and advertising-opportunities for companies that are content related. Because seniors are becoming more modern, applications should focus more on this group and give them the opportunity to use a smartphone.

Social relevance

Unfortunately, for a lot of elderly people it is not so easy to call a friend if they long for companionship. More shocking is the number of a whopping 1.2 million seniors that admit to feel lonely (TNS NIPO, 2012). They do not necessarily miss a loved-one, but just someone to share things with. A factor that negatively influences this issue is the digitalization of contemporary life and the segregation of elderly. Nevertheless, a study by Mallenius, et al., (2007) indicates that elderly people are interested in using mobile phones and services, but they need to deliver real value for them. This relevant value is expressed in form of a more social, active, and independent life. A keyword for them should not be age, but functionality instead. The Klup app therefore links these two phenomena.

Future perspective

Despite elderly are often neglected in product development, they are the only growing age group in most developed countries (Mallenius et al,. 2007). Therefore Klup focuses itself on the “new generation of seniors” (Wolters, 2016), since this group is used to work with mobile devices, but also on informal caregivers such as family and home-care organizations to organize social activities with their clients.

Although the platform is still relatively small, it had its first big success in Rotterdam, and is now rapidly expanding across the country. Mainly because seniors are becoming increasingly aware of the benefits of modern technologies, and are successful in the adoption of touch-based user interfaces, regardless physical or cognitive weaknesses (Häikiö, et al,. 2007). In addition, the app is widely promoted on national television and via public organizations. Therefore Klup is currently busy with the modernization and extension of a new platform which will be released around April 2017. Society throws heaps of praise on this relatively new idea, and for the skeptics of mobile device-usage, this app combines the best of both worlds: an online environment facilitating offline contact.

References

Häikiö, J., Wallin, A., Isomursu, M., Ailisto, H., Matinmikko, T., & Huomo, T. (2007). Touch-based user interface for elderly users. MobileHCI ’07 (pp. 289-296). Singapore: ACM. Mallenius, S., Matti, R., & Tuunainen, V. K. (2007). Factors affecting the adoption and use of mobile devices and services by elderly people – results from a pilot study. Sixth Annual Global Mobility Roundtable, (pp. 82-94). Los Angeles .                                                                                                                                      Snel, N., & Plantinga, S. (2012). Eenzaamheid in Nederland Coalitie Erbij. Utrecht: TNS NIPO. Wolters, M. (2016, september 27). ‘Tinder’ voor senioren blijkt hit in Rotterdam. (D. v. Vliet, Interviewer)             http://www.ad.nl/rotterdam/tinder-voor-senioren-is-groot-succes-in-rotterdam~acc64449/                                               https://www.hetkanwel.net/2016/12/16/klup-app-senioren/

Crowfunding in Real Estate


Investing into real estate
Investing into real estate has traditionally required large amounts of funds to even get started. While returns on real estate can in the long run be more attractive than investing in for example stocks, exposure to the market is lower for the general public because the barriers to entry are so high. The real estate market is currently on the rise again, and this trend can be seen in many countries. As an example, according to the CBS the price of existing houses in Amsterdam rose by 14.7% during Q2 of 2016. Moreover, the rise of crowdfunding is stimulating some interesting developments in the real estate market, especially with respect to investing possibilities for smaller investors.

Howtoinvest_realestate

Can real estate be crowdfunded as a form of investment?
Launched in 2012, Fundrise is a real estate crowdfunding platform that allows the “average” person to have to opportunity to invest into real estate projects. These projects range from pooled small investments such as a single family homes, to large corporate buildings. The platform has set a minimum investment price of $1,000 and allows its investors to start accruing interest on their investment as soon as a project is funded. The benefits from investing directly into real estate assets is that there are generally less fluctuations in returns (granted that the project goes according plans) and more transparency. In fact, in 2015 the average annual return for all the investments on the website was 13.1% (Forbes, 2015).

crowdfunding_real_estate_projects

Efficiency Criteria
The platform is two-sided. On one side of the platform there are real estate investment trusts (REIT), which create portfolios by participating in the development of a variety of real estate assets such as hotels, shopping centers, houses and office buildings. On the other side of the platform, users (investors) can then invest into the real estate portfolios by essentially buying shares in these funds. Through this, the development projects are funded, built and eventually rented out or sold. Users can then earn gains or make losses depending on the success of the project pools in which they have invested. Users can however, not lose more than the initial investment that they put in.

As such, the platform creates a network effect in which the more users invest, the larger the pool of real estate assets can grow, and therefore the less risk to the users that they will lose their investment. The risks of real estate pools are defined clearly and are dependent on factors such as location, asset type, and structure. Users moreover have the chance to participate in redemption plans, in which they are able to sell back a certain amount of the bought shares to the respective REITs at the end of each quarter.

The business model behind the platform is relatively well protected against legal regulations. This is because it essentially deals in shares of the REITs to fund projects, rather than by providing a loan type structure. Moreover, users get a transparent view of the assets, structures, and locations that they are investing into. The one major downside of the platform is that your investment funds are essentially managed by an external management team, and are therefore dependent on their knowledge and execution. In this aspect, the user does not have the ability to exert direct control over the way in which their money is invested, which might not always be favorable.

Sources:
https://www.cbs.nl/
https://fundrise.com/
https://www.forbes.com/sites/trangho/2015/12/03/how-to-play-billion-dollar-real-estate-deals-with-just-1000/#246e38a02173

 

Using a ‘healthy dose of guilt’ to achieve your goals


Over the years many different types of social online communities have gained popularity. It has allowed for individuals with widely differing interests to connect and interact with others that share common interests. Think of CouchSurfing, Facebook, Reddit, and SoundCloud, among many, many others. For those that are rather goal-oriented and keen on connecting with others that share a similar mindset, Linkagoal is the optimal social network.

Linkagoal is a social online community based on the premise of sharing personal goals and connecting individuals based on related life goals and ambition. On this social network users can engage with other goal-driven users. Besides sharing your own goals with the community, you can connect with members who can assist you in achieving your goals, or with people that are currently trying to achieve a similar goal. Linkagoal’s underlying belief is that barriers such as the lack of resources, guidance, experience, accountability, and encouragement, are what keep humans from reaching their goals. Thus, why not build an online community to make it easier for people to overcome these obstacles and achieve their ultimate goals. (ACN Newswire, 2014)

The online community takes on a simple, yet unique approach to foster goal-attainment of their users. Firstly, new members can create a goal and explicitly state what it is that they want to accomplish. Secondly, individuals are encouraged to share a post with other community members regarding their past and present events. The third aspect is called Progress Update, which entails that users keep the community up to date on their progress towards their goal. Fourthly, users are encouraged to create milestones, in order to help them stay on track. Moreover, members are expected to motivate others in attaining their goals. Furthermore, users can build their own mini-community by linking their goals to other similar goals. In addition, individuals can contribute to the attainment of other members’ goals by offering their knowledge and experience. Lastly, the social network offers a private messaging, so members can stay connected with their friends. (Linkagoal, 2017)

Despite their good intensions, Linkagoal has received quite some backlash for their claim that a ‘healthy dose of guilt’ provides ‘just the right amount of pressure’ to keep users on track. However, mental-health experts have condemned this approach, as they believe it could have detrimental effects on individuals. Furthermore, Linkagoal partnered with YouGov to explore drivers of motivation, especially regarding annual goals. They found that nearly 62 percent of social-media users feel a higher level of pressure to stay on track when others can see their progress. It is exactly this belief that experts find disturbing. Rather than ‘avoiding the negative, i.e. the threat of others knowing you have failed’, they believe Linkagoal should ‘encourage and reinforce the positive’. (Mail Online, 2016)

Nevertheless, the social network has a strong community base of over 2 million members, which is expected to grow even further. Therefore, the social network is primarily focusing on monetization, with the rollout of mentorship services, rewards, and goal campaign features in the near future (The Silicon Review, 2016). Furthermore, Linkagoal is available as an app on both Google Play and the App Store.

Who knows, maybe Linkagoal will one day join the ranks of Facebook or Twitter, only time will tell.

References

ACN Newswire. (2014). Linkagoal Secures $1.25M in Series A Funding. [online] Available at: http://www.acnnewswire.com/press-release/english/16486/linkagoal-secures-$1.25m-in-series-a-funding [Accessed 10 Mar. 2017].

Linkagoal. (2017). Linkagoal | Share Your Life Goals. [online] Available at: https://www.linkagoal.com/ [Accessed 10 Mar. 2017].

Mail Online. (2016). Experts hit out at ‘guilt and shame’ goal share websites. [online] Available at: http://www.dailymail.co.uk/health/article-3602375/Experts-hit-guilt-shame-goal-share-websites-Networking-sites-slammed-detrimental-mental-health-effects.html [Accessed 10 Mar. 2017].

The Silicon Review. (2016). The Goal Based Social Network: Linkagoal, Inc.. [online] Available at: http://thesiliconreview.com/magazines/the-goal-based-social-network-linkagoal-inc/ [Accessed 10 Mar. 2017].