The phenomenon of crowdfunding cannot be denied, but what are the two essential elements for companies to achieve success on the various platforms available?
These have been recently revealed by new research from ESMT Berlin. Professor Linus Dahlander studied the crowdsourcing efforts of over 20,000 companies and concluded that companies must give both proactive and reactive attention to contributors to make crowdsourcing successful.
He explained that whether companies succeed, or fail in crowdsourcing can be explained by two actions they take, and these are:
Provide proactive attention – give to get
Instead of waiting for ideas to be submitted, companies post ideas themselves and invite people to discuss them. This proactive attention shows the types of ideas that organisations are interested in, engenders trust by providing a glimpse into potential future innovation, and empowers external contributors to evaluate the company’s ideas.
Proactive attention establishes a reciprocal communication style and drives knowledge sharing. Contributors are more motivated to submit their own ideas. This is critical as no contributor wants to be the first to submit a suggestion.
Provide reactive attention – show you care
Companies that respond publicly to suggestions receive many more ideas from external contributors. This validates external contributors, motivating further contributions, and indicates what types of suggestions the organisation values.
Attending to newcomers in particular yields impressive outcomes. If they learn that the organisation cares, they make use of their fresh perspective and share numerous ideas.
Professor Dahlander said: “Managers who pursue these actions can increase the odds of success substantially. They seem straightforward, but companies need to fight their natural tendencies to wait to receive ideas before sharing their own and to focus on established contributors when they should focus on news ones instead.
“Organisations must pay attention to the crowd before the crowd will submit ideas.”