Monday, October 20, 2008

Letting volunteers build your business

Everyday millions of people make all sort of voluntary contributions to companies-from informed opinions to computing resources-that create tremendous value for those firms' customers and, consequently for their shareholders.In the Oct 08 issue of HBR, Intuit co founder Scott Cook suggests that companies should collaborate actively with their customers. This might not seem an insightful idea at first , but more deeply he explores the idea, the more profound it becomes.

Now the concept of user contribution isn't new, but the companies such as Google, ebay,Skype,Honda, Procter & Gamble, Hyatt, Amazon etc.- have created a user contribution system, methods for aggregating and leveraging people's contribution or behaviours in ways that are useful to other people.

The users can be Customers, employees, sales prospects-or even people with no previous connections to the company. Their contributions can be active(work , expertise,or information) or passive and even unknowing( behavioural data that is gathered automatically during a transaction or an activity).The system is a method usually Internet based,by which contributions are aggregated and converted into something useful to others.

Now the advantages of such a collaborative system :

-Cost advantage:what does wikipedia pays to authors and editors of its articles?same for Facebook, Myspace or Amazon book reviews..

-Scalability : ebay virtual shelf has 120 mn items, Wikipedia has more articles that encyclopedia Britannica...and it need not be broad or deep contribution( long tail)
-Competitive advantage : structural advantage because of network effort.

This is not limited to Internet based businesses, but old/traditional 'for profit' business have also started deriving benefits from this collaborative process : IBM, Newspapers,Toyota, Unilever,Banking etc.

So which all functions(in my company) can benefit from this user contribution systems:
Customer Service,Marketing,Employee Support, Capital resources,Design and development, Production etc.
Also refer to my post on open innovation .

1 comment:

Akash_India said...

i think this is the future..when we will have employee less organisations with zero employees..!