Thursday, March 20, 2008

WIKINOMICS REPORT

March 19 - iBreakfast

Katarina Skoberne, OpenAd.net
Nic Perkin, The Receivables Exchange
Jessica Morris, OurStage.com

The March iBreakfast was notable for showing how to put the world to work for you by tapping into idea marketplaces. This is not about Wiki software per se but about extracting value from the universe simply by putting it to work for you. We call it Collaboratition – motivating people to work together or against each other for a common purpose.



This is truly a revolutionary concept even though it has been talked about for a long time. What is clear now is that all the tools and public sentiment is in place for those who can think outside of conventional parameters to harness. This point is so important because it also explains why your next competitor is not likely to be your current one – since they are probably as captive as you are to conventional wisdom.

We looked at 3 companies using some form of Collab – in music, advertising and monetizing receivables.

OpenAd.net is a really good example of all of the above because it is a great way for marketers and advertisers to reach out to the world creative community for ideas. They pay OpenAd a fee of several thousand dollars and then put out a brief to their community of 10.000+ creatives worldwide and offer a prize – typically between $500 and $2000 – for a fleshed-out campaign idea. The concepts pour in. The most famous being one set up by Bono to retire 3rd World Debt. But many Fortune 500 companies like Gillette participate too.

And where does this groundbreaking company, now with offices in the US hail from? Slovenia.
Next, we looked at The Receivables Exchange, which monetizes the short term loan you give to customers when you allow them terms of 30 – 90 days. From their perspective this is a free loan which, worldwide is worth around $2.3 trillion. Now that’s a nice number!
This is often called factoring and normally, companies call their bank or a factoring company and get the best deal they can which is typically around 15-25% in annualized interest. By creating an open exchange, suddenly you have made your business opportunity available to the world and your interest comes down dramatically. Investors tend to get a very good return for their risk too.

Finally, there is OurStage.com, a music judging and promotion site which covers just about every genre from rap to world music as well video. It is open to all comers and has a monthly contest for around $500 in prizes in each category. The dynamics are very interesting. Aside from raising $13 million, the site has grown quickly and attracts 1.2 million monthly uniques.
Visitors are asked to judge two songs whenever they log on and here’s the secret – it is a “thin slicing” approach - you only have to listen to the first 15 seconds to judge. Naturally, that favors songs with the hooks up front, but even so, by aggregating the scores on these microjudgements, they come up with a good index of what is hot. Any musician, amateur or pro can submit and there is no fee. The site makes money through ads, selling songs and sending out the cream of the crop to record co.’s and concert organizers.

The eye-opening part is how they grew – by the musicians themselves, of course. That’s because today, every busker worth their salt has an email list and their own little marketing machine called: “emails to fans.” It can be postcards toom but you can’t beat the price of emails

So the lessons learned are: figure out who can be motivated to help you (especially ones who can multiply your message), how to reach them and how to execute with a great site. This is a key point because so much of this intangible that the IP rights are a critical issue.

The metaphor we chose to set this show in motion are UFOs and the Web, partly because, like the value concepts of Wikinomics, they have a way of popping out of nowhere and people seem hellbent on uploading these videos by boatload onto YouTube. The motivator appears to be the ubiquity of camcorders and a desire to let the world know you’re not crazy. Or is it too much Photoshop? Either way, the world works for you – you just need to figure out how to tap into it.

Other Blogs about this iBreakfast:
Why the Big 4 Labels are Dead by Ray Beckerman
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