The Crowd-funding Opportunity
By By Anindya Ghose, Daniel P. Paduano Fellow, Robert L. & Dale Atkins Rosen Faculty Fellow & Associate Professor of Information, Operations and Management Sciences and Ravi Bapna
Given how crowd-funding has fuelled innovation and entrepreneurship elsewhere, it’s only right that policymakers in India start to deal with crowd-funding in a serious way.
In crowd-funded markets, any individual can propose an idea. Those interested can contribute funds to support it
With a billion people on the social graph (Facebook, Twitter and the other social platforms) and five billion with cellphones, it’s an understatement to say that we live in a hyper-connected world. While we may abhor the physical crowds of our teeming cities, we argue that the Indian entrepreneurship ecosystem is ripe for tapping into the digital crowd, an emerging global reservoir of social connectedness, for its main ingredients—capital, talent and labour. All said, the global socio-economic story of the next 20 years is going to be written on the battlefield of ideas out there, and crowd-sourcing and crowd-funding have the potential to democratize the process of generation, selection, funding, mutation and evolution of the best ideas. Embracing this crowd, however, requires structural changes in mindsets and policies.
At the heart of crowd-sourcing is Joy’s law. Tell a CXO that there are, by any measure and for any company, more smart people outside your organization than inside, and the initial reaction is often something akin to that of mixing a bitter pill for those used to drinking their own kool-aid. Yet, as demonstrated in a variety of settings such as Threadless.com for product design, InnoCentive.com for scientific problem solving, and Kaggle.com for the hot new area of big-data analytics and predictive modelling, a global pool of problem solvers and creative minds can be tapped into, often in the form of a contest that fires the competitive spirit, provided one is willing to live by the norms and decentralized decision rights of these crowds of social communities. Similarly, platforms such as Amazon’s Mechanical Turk are providing labour opportunities for those at the fringes of the workforce to get engaged in doing routine and mechanical global work.
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