Crowdfunding is not just a glorified donate button, it’s a way to empower individuals to bring forward ideas that they have. Those ideas are vetted by other people, not some high level corporate executives. If the campaign reaches the determined goal, it validates the idea and shows that there is enough demand for the project. Only than the project owner should go ahead and build upon their idea. This is the best market research there is, because people are actually voting with their money and not by checking a box on a survey. It is no surprise that large companies started to look at crowdfunding themselves to see how they can leverage it. Below are three different ways that enterprises are using crowdfunding:
1. External Use: This past month I met up with a manager of Johnson and Johnson who have recently created their own internal crowdfunding platform, caringcrowd . It’s still in beta and went live with only a few projects so far. The platform is aimed at a very specific category, “public health”. Its open to the public, and what it does extra, than other donation platforms, is that it vets the project with its own experts. So backers know that the platform has good quality projects. The platform works very well with the Johnson and Johnson brand which is improving health.
2. Market Research: The second company is Sony, which is a multi-billion dollar company. They don’t need crowdfunding for the money, they are doing it for market research. They have been experimenting with crowdfunding for a few years now and last year launched their own crowdfunding platform first-flight . Instead of spending millions of dollars for building projects they can much quicker figure out which items have enough interest using crowdfunding and work only on those.
3. Internal Use: The last company I want to talk about is the largest one of them all. IBM which has over 350,000 employees globally launched an internal crowdfunding about four years ago. The platform is only used internally and has projects which employees are passionate about that can benefit the firm. IBM provides a small budget for employees to give to these projects. The projects can verify from a new app, office improvement, to team building. The crowdfunding platform in IBM was used to create over 120 apps. An example of a successful project was an application to manage projects. One employee from Solvakia raised over $20,000 and developed it himself, which is now used by managers.
The three examples above are very different uses of crowdfunding in the enterprise world. Johnson and Johnson platform is open to the public for non-profits and backers and uses its own resources for vetting process. The purpose for their site is to improve the Johnson brand. Sony sources the projects internally but backers are open to the public. The platform purpose is for market research. IBM Platform is only for internal use and it’s for empowering its employees to work on interesting projects.