Project Management Institute

Film Riot, Calgary, Alberta, Canada

CASE STUDY

 

PHOTOS BY ANDREW QUERNER

Andy Doan and Don Holmsten, FilmRiot

Andy Doan and Don Holmsten, FilmRiot

ANDY DOAN had a vision: a website where independent film directors and connoisseurs could join forces to make the kind of movies they wanted to watch.

Cut to the next scene.

Don Holmsten spots the idea posted on an online community.

And the rest, as they say, was history.

The two Canadian entrepreneurs went on to develop the project with the help of a bunch of strangers who provided feedback and all sorts of marketing and development services—sometimes for free.

They did it all via crowd-sourcing, an innovative business trend taking collaborative project management online—and to a whole new level. Around the world, individuals are using online communities to identify people with similar experiences or interests who can share ideas, offer feedback and collectively identify which projects hold the most promise.

A NEW TWIST

A lot of people have never heard of crowd-sourcing. But if you've ever commented on an industry standard or test-run beta software, consider yourself an official participant.

Using the technique, an organization can tap into the collective intelligence of the public at large to complete tasks it would normally either perform itself or outsource to a third-party provider. Crowdsourcing can include anything from gathering feedback on a new idea, asking for help to solve a product problem, or looking for contractors, investors or new employees interested in participating in a project.

Mr. Doan first posted his project concept on Cambrian House—an online community where members can exchange ideas and build businesses—in August 2006. Originally called Fundable Films, the proposed project was to provide independent film developers a way to fund and market their films sans the backing of finicky Hollywood moguls. Instead, the movies are promoted to a community of film enthusiasts who can back the pictures in exchange for a piece of the proceeds.

“I wanted a way to bring independent media products more prominence in the marketplace,” Mr. Doan says.

The project immediately gained a lot of attention, and by November his idea had won Cambrian House's IdeaWarz, a monthly competition in which community members vote for the most promising business idea. As the winner, Mr. Doan received cash, promotion for his idea on the site, and exposure to venture firms and business experts.

Mr. Holmsten, who has a background in independent film development, loved the idea and contacted Mr. Doan. The two launched the site under the name FilmRiot, using the web community every step of the way, both to see what it responded to, and to find help and new ideas to improve the business plan.

THE IN CROWD

Think you've never participated in crowdsourcing? Think again. Here are a few well-known sites maintained by the masses:

Galaxy Zoo: An online astronomy project that invites members of the public to assist in classifying over a million galaxies.

InnoCentive: Funded by pharmaceuticals giant Eli Lily, it is an “open innovation” company that takes research and development problems in biology or chemistry, frames them as challenges and opens them up for anyone with the expertise to solve—all for a hefty reward.

Muji.net: This community site for the Japanese furniture company of the same name solicits innovative project ideas from members.

Threadless.com: A community based t-shirt company where members can put up their designs for a public vote. The winners are then printed and sold.

Wikipedia: Probably the most well-known of the bunch, it's a free encyclopedia built collaboratively by users and experts using wiki software.

YouTube: The site that launched a million web-celebs, it allows members to upload everything from homemade music videos to business tutorials.

Around the world, individuals are using online communities to identify people with similar experiences or interests who can share ideas, offer feedback and collectively identify which projects hold the most promise.

OUT TD THE MASSES

Once Mr. Doan and Mr. Holmsten decided to move forward with FilmRiot, Cambrian House helped them conduct an initial market test of the project before they invested too much time or money. They put up an inexpensive site with a description of the business idea, along with a survey asking for feedback, and a pre-registration option to pay CAD$30 to receive a free t-shirt and a credit toward funding a future film of their choice.

“It went unbelievably well,” Mr. Holmsten says. “The market test got me really excited about the project because it showed we had a good idea that people would respond to.”

The little money they spent on the market test was invested in Google ads to drive traffic to the test site. Over two months they received 2,500 unique visitors, 200 of whom completed the 10-minute survey and 60 of whom paid the CAD$30. “To have that kind of response when you don't even have a project is amazing,” he says.

Many of the survey comments were surface-level, Mr. Holmsten says. But they received great ideas about other sites whose models worked well, including sellaband.com, which raises money for bands to record their music in a studio. “We used their model and massaged it for film,” he says.

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SO WHAT IS IT EXACTLY?

“Crowdsourcing is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.

—Jeff Howe, a contributing editor at Wired magazine, who is credited with coining the term in his June 2006 article “The Rise of Crowdsourcing”

 

Many people also expressed an interest in a FilmRiot company store where the new films and merchandise could be sold to community members.

In the final version of the site, community members will help to fund those films and filmmakers they believe in, in exchange for a cut of the proceeds. Mr. Holmsten and Mr. Doan will take 7 percent of each payment, as well as percentages from store sales, and later on, from film distribution. Mr. Doan expects each movie project will bring two additional pre-existing products produced by the filmmaker to the site to be marketed through the store. “Our goal is to have at least 1,100 products available in the store within 18 months,” Mr. Doan says.

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Community members will also receive advertising promotions that they can post in their own e-mails or websites to promote those films, creating a viral marketing network. “At the end of the process you may have 300 people invested in making your film a success,” Mr. Holmsten explains.

FilmRiot has already secured a partnership with the Slamdance Film Festival—the edgy counterpart to the Sundance festival taking place at the same time in Park City, Utah, USA.

The two owners are pursuing larger investors and they've found that by crowd-sourcing the project early on, they're much further ahead than typical business start-ups pursuing venture capital. And that, they believe, gives them an advantage. “We can show them that we already have a number of users, excitement and publicity around the product, and that tips the balance in our favor,” Mr. Holmsten says. “We couldn't have done any of it without crowdsourcing.”

CROWDED HOUSE

At Cambrian House, people have the power. Staking its claim as home of the first crowdsourcing community, the web 2.0 company, based in Calgary, Alberta, Canada, allows users to form, polish and foster web-based new business projects.

“For a long time people have been afraid that if they shared their ideas they would be stolen. But with the internet there is so much sharing and collaboration, people are beginning to realize how much they can benefit from reaching out to the community,”
says Jasmine Antonick, vice president of communications for Cambrian House.

Everyone who joins the community has the right to own a share in the Cambrian House co-op. These members are entitled to a percentage of the earnings in the form of cash and member shares.

Currently, more than 6,150 ideas have been submitted to Cambrian House. The best of the best of those go head-to-head in the site's IdeaWarz where they vie for top ranking. IdeaWarz winners are awarded money to develop their projects.

With crowdsourcing, there really is power in numbers.

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Mr. Doan also enthusiastically endorses crowdsourcing to get a project off the ground or out of a rut, but he warns that it must be a controlled process. “You can find a lot of people who are excited to help out, but you need to stay focused on your business model. You need to maintain control over the direction of your idea and be careful about bringing too many people into the process or egos can get in the way,” he says.

“Crowdsourcing isn't a magic tool for solving all project problems,” agrees Jasmine Antonick, vice president of communications for the Calgary, Alberta, Canada-based Cambrian House. But she urges project managers to consider the benefits of turning to a larger community for help and advice. “Go to a niche crowd and offer them something in return for their help,” she says, noting that rewards can be anything from project experience to a cash. “You can tap into the expertise of the community and get feedback and new ideas, without changing your team dynamic.” —Sarah Fister Gale

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK JANUARY 2008 WWW.PMI.ORG
JANUARY 2008 PM NETWORK

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