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9/2/2011
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Crowdsourcing For SMBs On A Budget

Napkin Labs built its service around the idea that smaller firms are more likely than large enterprises to exploit new product ideas from social communities.

10 Crowdsourcing Success Stories
Slideshow: 10 Crowdsourcing Success Stories
(click image for larger view and for slideshow)
Milissa Rick had worked on "open innovation" projects a decade ago at the University of Wisconsin, before "crowdsourcing" was quite the buzzword it is today, so she knew it could work to identify new product ideas for her company.

In the age of social media, she also thought it shouldn't have to be quite the do-it-yourself challenge it was in the past.

Rick heads commercial business marketing for Spacesaver, a maker of high-density physical storage systems such as mobile shelving units that roll together for compact storage and roll apart to create an aisle for access. "About 30% of my job is innovation, and I really wanted to find a way of going outside the company to look for new ideas," Rick said. "I figured there must be something out there we could use, as a medium-sized company, where we wouldn't have to create it ourselves but could tap into it."

That made her a perfect customer for Napkin Labs of Boulder, Colo., a startup offering a prepackaged crowdsourcing environment for testing and soliciting ideas. Napkin Labs customers get their own online innovation lab where they can challenge Web users to come up with ideas, or ask for feedback on the company's ideas and how to improve them.

"We wanted to take the focus group model and turn it on its head," said Riley Gibson, co-founder and CEO of Napkin Labs. Having worked at marketing agencies, he knew how slow and expensive focus group market research could be--and yet, how valuable. Gibson saw an opportunity to create an online alternative that would be fast and affordable.

To boost participation, Napkin Labs uses game mechanics techniques to reward user behavior and encourage a sense of competition and fun. Although companies like Bunchball and Badgeville offer gamification platforms for others to build on, Napkin Labs decided that requirement was core enough to the experience that it built its own, Gibson said.

"We've really put a focus on incentivizing external community members to participate," Gibson said, and that means making sure every action they take within the system is tracked and rewarded.

The service also makes it easy for customers to recruit participants from among their followers on Twitter and Facebook "and bring them into one of these labs, which is a branded experience where they can generate insights and ideas more quickly than ever before," Gibson said.

Some large organizations such as Sony and Intuit have made use of the Napkin Labs service. Intuit recently introduced its own idea-generation product, Intuit Brainstorm, but Brainstorm is focused on soliciting ideas from employees rather than the public.

Although he is pleased with the attention from big brands, Gibson said he sees the most potential with "small to medium size businesses that have just a few marketing folks, but often can be much more nimble at posting a few challenges" and translating the results into product ideas. "With the bigger companies, there are often so many levels of hierarchy that it's difficult for that valuable input to take hold," he said.

Spacesaver focused its first lab on the university market, which was one of the areas where Napkin Labs had already recruited a panel of interested participants. The process lasted four weeks, starting with an open brainstorming session and then turning into a more focused discussion of specific ideas Spacesaver identified as having the most potential.

"We had probably over a hundred people participate, giving feedback at different levels, and we walked away with 30-plus ideas--some of them derivative of what we already had, and others new applications for products we already had," Rick said. Of those 30 ideas, there were also two genuine new ideas with market potential, "one of which is a possible revenue generator for our end customer, which is the campus. For the amount of money we spent, which was nominal, we walked away with some great out of the box ideas."

Napkin Labs monthly plans range from $99 per month to $499 per month. By signing up on a project basis during the beta program, Rick said she was able to accomplish the results she sought for under $2,000. That is incredibly cheap by the standards of market research, she said.

Spacesaver is also considering using the Napkin Labs service with its military division, which develops products such as weapon racks, and Rick said she has also shared her ideas about the experience with parent company KI, which makes office furniture.

Attend Enterprise 2.0 Santa Clara, Nov. 14-17, 2011, and learn how to drive business value with collaboration, with an emphasis on how real customers are using social software to enable more productive workforces and to be more responsive and engaged with customers and business partners. Register today and save 30% off conference passes, or get a free expo pass with priority code CPHCES02. Find out more and register.

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