In Part I of our series on crowdsourcing, we shared how the new form of networking is helping solve important problems in science and medicine, transforming the way citizens and governments work together, and changing the world’s definition of who an innovator can be. But these are just a few of the ways crowdsourcing is shifting the world’s social and economic landscape. Discover more on how crowdsourcing is helping communities come together to solve global challenges, creating new opportunities and risks for startups and investors, and helping public and private organizations design more user-centric products than ever before.
1. It’s helping organizations incorporate more diverse perspectives
In the years before the internet, researchers faced challenges in gathering input from audiences outside of their local reach. Today, crowdsourcing provides researchers with a fast, easy, and cost-efficient way to gather perspectives and feedback from a wide range of populations and demographics.
The UN has used a cross-cultural crowdsourcing challenge to solicit ideas on how to get refugees the information and services they need. Through the UN’s crowdsourcing efforts, global brainstorm sessions spanned the distance from Africa to India, as hundreds contributed their perspectives on how to help refugees achieve integration in their new communities.i Participants in the crowdsourcing challenge included members of the UN Refugee Agency and their partner organizations, as well as the refugees themselves.ii
2. It’s bringing new opportunities—and new risks—to startups and investors
Crowdsourcing can offer new opportunities for startups, inventors, and investors. By giving aspiring entrepreneurs instant access to investors, online crowdfunding platforms can help creative people build successful businesses quickly and easily. This form of funding accelerates innovation by helping to fund truly unique, ‘niche’ ideas—ideas that might have had trouble generating funding in the past. With the help of crowdfunding, new businesses can achieve their goals more efficiently by spending their early days developing great products, rather than devoting their time to fundraising.
With the rise of equity crowdfunding, investors can purchase stock in new businesses they’re helping to fund. Signed into law in May, 2016, Title III of the federal Jumpstart our Business Startups (JOBS) Act now allows unaccredited investors (individuals with less than $1 million in net worth or less than $200,000 in annual income) to invest in startups through online crowdfunding.iii Today, everyday individuals are funding new projects and helping new businesses grow.
Yet by making it easier for every startup to gain investors, crowdfunding is also making investing more risky. First, investors may find themselves putting their stock in creators with no track record. Second, a startup may take more risks. When a startup has an enormous network of investors who have all donated smaller amounts, there is less pressure on the business to achieve results for any one investor.
Traditionally, when a large investor considered whether or not to go ‘all in’ on a new business, the new business had to take the time to assess its risks, develop a sound strategy, and convince the investor that the business would achieve its goals. Since crowdfunding provides new businesses with access to such a large network of potential investors, businesses can simply replace any investor who feels the project is too risky. Finally, there is the argument that, with more projects funded, there is the potential for a larger number of projects that fail. To help protect investors against the risks of equity crowdfunding and enhance confidence in the crowdfunding ecosystem, AIG has recently launched a new product, crowdfunding insurance.
3. It’s helping organizations like AIG leverage great ideas and bring them to life
Organizations can develop more user-centric products by using crowdsourcing to understand customer needs. In a crowdsourcing initiative, NASA invited the public to propose new ideas for products that would incorporate NASA’s technologies to meet real consumer needs. Having invented items such as the sensor behind our smartphone cameras, Teflon®, Velcro®, and even baby formula, NASA now collaborates directly with consumers through crowdsourcing to understand which products they’d like to see next.iv
AIG is also using crowdsourcing to enhance our market research and receive feedback directly from consumers. Through AIG Connections, our online insights community, more than 1000 consumers across the U.S. give us candid feedback every week on a wide range of ideas, from concepts for new products to marketing materials to business strategies. AIG Connections is helping AIG gain insights into the insurance market more quickly and efficiently: with our mobile platform, we can view results of our research in real time, as the data is coming in.
Participants in the project are not simply ‘a crowd’—we select them carefully to represent the insurance-buying public, and new members join every three months. We’re hearing that the open discussions and live chats we’re hosting for our participants are creating a great community that promotes new ideas about insurance and technology. One participant comments, “The thoughts of other members have made me consider other [insurance]…and opened my eyes to some topics I would not have thought about….” Another participant comments, “It has been an interesting journey learning all about new and upcoming [ideas] for the future like the Internet of Things….It’s so nice to be with an insurance company that wants to be on the same level as their customers.” AIG Connections is just one of the many ways we’re getting closer to customers, listening to their needs, and creating more valued solutions.
Crowdsourcing at AIG has also helped us to develop some of our most innovative products. As a global organization with over 60,000 employees, we want to make sure our employees’ best ideas get heard by our senior executives and translated into action to help our clients. That’s why we created our Innovation Bootcamp, or IBC Program. Launched in 2013, IBC brings together employees from across our organization to generate new products and processes. IBC teams develop their own innovation concepts and present them to a panel of senior executives, who select the winning idea. Sometimes this idea becomes our company’s next big innovation.
In 2014, an IBC team created and presented the concept for what is now Robotics Shield SM, AIG’s pioneering risk mitigation solution for the robotics industry. Through further vetting and development, including conversations with our broker partners about emerging risks and exposures in the robotics sector, AIG realized that there was indeed a rapidly growing need for comprehensive insurance to protect companies that manufacture or use robots today. Launched in 2015, AIG Robotics Shield now provides end-to-end risk management solutions for a booming industry. The winner of a 2016 Innovation Award from Business Insurance, Robotics Shield is just one of our many innovations brought to you by the power of the crowd.
iUngerleider, Neal. “How the UN Uses Crowdsourcing To Get Refugees What They Need.” Fast Company, 27 Aug. 2013, www.fastcompany.com/3016393/how-the-un-uses-crowdsourcing-to-get-refugees-what-they-need. Accessed 10 Aug. 2016.
iiPangburn, DJ. “The UN Is Turning to Big Data and Crowdsourcing to Tackle the Refugee Crisis.” Motherboard, 6 May 2014, www.motherboard.vice.com/read/the-un-is-turning-to-big-data-to-crowdsource-refugee-solutions. Accessed 10 Aug. 2016.
iiiCowley, Stacy. “New Crowdfunding Rules Let the Small Fry Swim With Sharks.” The New York Times, 14 May 2016, www.nytimes.com/2016/05/15/business/dealbook/new-crowdfunding-rules-let-the-small-fry-swim-with-sharks.html. Accessed 10 Aug. 2016.
ivMartin, Michel. “NASA Explores a New World: Crowdsourcing Ideas.” NPR News, 30 Jun. 2014, www.npr.org/2014/06/30/326934037/nasa-explores-a-new-world-crowdsourcing-ideas. Accessed 10 Aug. 2016.