The types of platforms vary:

On the giving side, GlobalGiving and DonorsChoose emerged more than a decade ago as philanthropic marketsplaces. While GlobalGiving considered itself the “ebay of international philanthropy,” DonorsChoose enabled “every citizen to be a philanthropist, and every teacher a grantwriter.” Both platforms enabled do gooders to find funding for their social good ventures and created the sense of connection and personal impact that donors were craving.

On the pseudo-giving side, Kiva awakened American donors to the notion of giving by investing, enabling them to give to a fund, which would be invested in a small scale venture and repaid, such that the donor could “reinvest” in another venture. Once the initial loan is repaid, donors have the option of “pulling out” their loans (without interest) which also separates it from a straight donation platform. Similarly (on the murky side of “return”) Kickstarter took the US by storm – creating a modern day form of patronage – and adding a transaction engine to the creative economy. Donors still don’t receive a financial payback, but they do often receive a return, i.e. sample from the first run of a product. Interestingly enough, Kiva co-founder Jessica Jackley described a Kickstarter transaction (in a 2012 talk at the Economist conference) as “purchasing an experience.”

Many moons ago, I remember sitting with soon-to-be Kiva President, Premal Shah, on the eBay campus, talking about this uber cool (primarily because it was also highly controversial) platform emerging from the UK which enabled peer to peer lending. Zopa, owning the awesome tagline “everyone wins except the fat cats,” would become the model platform for Propser and the Lending Club. The latter is a great case study – enabling individuals (and large firms too – Kleiner Perkins has invested $15 million through Lending Club) to lend money – with varying returns – to Main Street. You can invest in a small business; you can help an individual refinance credit card debt.The returns are on par (or above) market rates, and they carry a sense of connection to real people. Recently, Lending Club past the $700 million mark in loans, having just past the $500 million mark late last fall. Lauren Pollack, of Jump, recently use Lending Club as an example for banks seeking to better serve generation Y:

“While banks must still service their existing customers and maintain revenue from existing businesses, they can also launch experiments to test products that tap into Gen Y’s needs–whether through their own products and services, through partnerships, or through minority investments…Startups like LendingClub offer peer-to-peer loans that appeal to Gen Y’s desire for connection, and the firm has made nearly $400 million in loans since 2007.”

And finally, there is the rapidly growing field of equity crowdfunding.  Equity crowdfunding enables any individual to put money into a business in exchange for a slice of equity. The emerging field, pioneered by the team at Profounder,  came under heavy scrutiny before it was finally “made legal” by the 2012 JOBS Act. The rules of equity crowdfunding are still being written, and the practice won’t be “live” until sometime in 2013. But that isn’t stopping start-ups from gaining traction.

Besides adding much needed capital, the crowdfunding movement is bringing two other important elements. First, by decentralizing the funding process, we engage donors and investors with context. They can see the commuter foot traffic that would be well served by a coffee shop. They know the farmer who needs to refinance his equipment. Secondly, they bring purpose. Crowdfunding is better enabling investors and makers to co-create the products and services they want in this world and about which they are passionate. Ultimately, this means “better fit” capital and should transform the nature of investor/maker collaborations.

This item was originally posted by Eli Stefanski on: http://collaborativeinnovation.org/better-fit-innovation/

This is the central argument to Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth - a recent book authored by Navi Radjou, Jaideep Prabhu, and Simone Ahuja.

“Jugaad is a colloquial Hindi word that roughly translates as ‘an innovative fix: an improvised solution born from ingenuity and cleverness.’ Jugaad is, quite simply, a unique way of thinking and acting in response to challenges; it is the gutsy art of spotting opportunities in the most adverse circumstances and resourcefully improvising solutions using simple means. Jugaad is about doing more with less.”

Jugaad isn’t solely an Indian concept – similar concepts exist around the world from Brazil to China to the US. However, it is most widely practiced in developing countries. The authors argue that, in the West, the “industrialization of the creative process led to a structured approach to innovation” which relied on elements contrary to the jugaad mindset. It is also this structured approach which makes the Western firm ill equipped to face “the five major components of complexity: scarcity, diversity, interconnectivity, velocity, and breakneck globalization.” However, developing countries have been “grappling with complexity and instability for so long it seems to give them an edge and a kind of immunity in volatile and adverse circumstances.”

The authors found that highly successful jugaad innovators practice six guiding principles which “help drive resilience, frugality, adaptability, simplicity, inclusivity, empathy, and passion.” They find opportunities at the margin – driving inclusive innovation and new market opportunities. They reframe adversity as opportunity. They think and act flexibly. They focus on simple (not to be confused with simplicity), clearly differentiating between what a customer needs and what the engineer or designer can  deliver. They follow their passions.

While I do think the these principles are more natural in developing countries, there are enough US examples to promulgate the emergence of a new class of literature  - books hanging at the nexus of design, market making, adaptability, and inclusive innovation. Jugaad emphasizes the jobs-to-be-done framework, and like Roger Martin’s Fixing the Game, it prioritizes efforts to delight our customer. Like Dev Patnaik’s Wired to Care, it promotes empathy as a lens for finding new opportunities. It emphasize market-making rather than share taking, a concept favorited by my colleague Saul Kaplan in The Business Model Innovation Factory. It underscores the characteristics of The Lean Startup. It demonstrates the market power of social innovation (though I like inclusive innovation more as a concept and as nomenclature) outlined in Jason Saul’s Social Innovation, Inc. 

What is this category pointing to? An economic shift- and the changes to our global innovation processes that are driving it. A renewed contract with the customer. A focus on people, empathy, and ingenuity over technology. A new emphasis on experimentation, flexibility, and iteration.

This category is pointing to an economic movement that is full of better opportunities – for customers and companies.

This article was originally published by Eli Stefanski on: http://collaborativeinnovation.org/2012/05/review-jugaad-innovation/

- Maurice Sendak

I presume, that like me, most children go through an archeology phase. They comb though the backyards for arrow heads, pour through National Geographic, and beg their parents to take them to the King Tut exhibit when it tours. I had the added advantage that my grandmother was an amateur archeologist, and, on one lucky Saturday, she took me on a real live dig.

I found three things on that dig:

1. More dirt than I could wash out in a week.
2. A few shards and slivers of native american pottery.
3. A complete disinterest in taking my archeology career any further.

I was reminded of this passing fancy recently when I was invited to preview ‘Giza 3-d‘ at Boston’s MFA. The exhibit is the outcome of a partnership between Dassault Systemes, Harvard University, and Boston’s Museum of Fine Art, and a response to the questions:

What if we add a dimension to history? Can we make it come alive? And, I would add, how does this change the learning process?

Egypt’s Giza plateau is perhaps one of the most important archeological sites in history. Perhaps many don’t know it by name – but we know it by the iconic images of the noseless Sphinx and the towering pyramids behind. It has been excavated and plundered by any number of global teams. Today, the remnants can be found in museums and universities across the globe.

However, through the Giza 3-d exhibit you can explore the plateau – from the Nile to the east and west banks, from Queen Hetepheres Tomb to the Sphinx, from above ground to the deep underground — all online and in 3-d. The importance is that we don’t see it as we are accustomed to seeing the remnants — ancient shards with faded colors and barely visible artistic patterns, existing on museum shelves, without meaning and context to the average viewer. We see it as (we imagine) it was experienced by Egyptian pharaohs, queens, servants, and slaves. The exhibit combines many of the images, artifacts, maps, and photographs from its many explorers — recreating a wholistic experience for participants.

It is extraordinary.

The Giza 3-d web site allows users to explore the necropolis, visit carefully restored tombs, and shafts, and connected burial chambers, and enter four of the site’s ancient temples, including Khufu and Menkaure’s pyramids. There is no “guided tour” – it is an exploration.

The implications for education and learning are great. At Harvard, this 3-d environment is enabling students to move from passive recipients to active explorers. ’Students transition from an environment where the instructor essentially drives the learning process to one where the students are immersed in the environment and drive the dialogue and discussion themselves,’ said John Shaw, chair of Harvard’s Department of Earth and Planetary Sciences.

This is a key shift in how we think about education – from the student as passive learner to the student as curious invested explorers. We have come to recognize the importance of experiential learning in many domains, and through worlds, like the online 3-d Giza Plateau, students can experience the past in entirely new ways.

I was thinking about this potential after viewing the exhibit. It was also the night I learned that Maurice Sendak had died. Where the Wild Things Are is an often quoted book in my house, and I couldn’t shake the idea that these 3-d worlds can make the walls of the classroom turn into the world all around. Its a powerful notion for the future of education.

This article was originally published by Eli Stefanski on: http://collaborativeinnovation.org/2012/05/student-explorer-3d-world/

“People and institutions removing improved faster by operative together in stretchable and fast relationships, where common opening fast increases and new believe accumulates over time.”

It works on paper, and with us creation junkies. But for your normal corporate types, it can be a bit severe – generally a partial about new knowledge, shared knowledge. The Collaborative Innovation Bloggers recently finished a survey, and this idea of common comprehension was a repeated theme. Yesterday, my #collabinno colleagues Andrea Meyer and Dan Keldsen hosted a webinar about a commentary and a doubt flush again:

“ I see insurgency to partnership from IP professionals disturbed about obvious authorised issues. What do we see and what do we say?”

I’m not going to tackle a authorised components (not even tighten to qualified) though we am going to residence a idea of common intelligence, and how we consort this among foe concerns.

In response to a question, how has your collaborative creation position altered given 2008 (Andrea Meyer wrote an whole post about these responses), one responder said:

“Industry some-more usurpation now of partnership and common intelligence. Tools improved though so too are attitudes. Less sealed palm and some-more open.”

This is an critical perspective. At BIF, we confront this idea of common comprehension often. We are, for improved or worse, a notoriously open platform. We control tellurian centered investigate about users and business that companies, nonprofits, institutions, and supervision agencies should all be regulating to rise new value propositions and business models. Occasionally, intensity clients will worry about this indication and will wish a work to be proprietary. “We don’t wish to give a competitors entrance to a same insights,” they will say.

We tend to conflict this thinking. Shared comprehension and insights do not appreciate into a competition to marketplace for rival products. What we do with these insights are unaccompanied to, and contingent on, a artistic capabilities of a sold team. Insights mostly explain a “why” of a information point, or insights yield a glance into a underlying inlet of a function or action. Insights are met, always, with interpretation. What do we do that insight? How do we mix and recombine a capabilities and resources to act on that discernment and broach value to a user?

It’s a lot like Iron Chef – a chefs, in full perspective of any other, with entrance to a same mixture and tools, never emanate a same finish product. Why? Because they have opposite capabilities, techniques, and “artistic perspective” with that to appreciate a unaccompanied ingredient.

Companies with good artistic talent and modular capabilities should be means to act really differently from one another regulating a same insights, or common intelligence. This is during a heart of marketplace making.  And to John’s point, finished right, it should make companies better, faster.

This essay was creatively posted by Eli Stefanski on: http://collaborativeinnovation.org/2012/04/ip-insights-and-interpretation/

With this principle in our back pocket, we experimented with a lot and went against many of the norms of the philanthropy industry. This, of course, made us great.

As I wrote the post, I realized that this lesson about empathy is one of those great lessons. It had become one of my core values, and I consider it one of those great dispositions that every organization should have (and I’ve taken that belief forward in my work – @thebif helps institutions use this information to build new business models).  ”People discover unseen opportunities when they have a personal and empathic connection with the world around them,” writes Dev Patnaik in Wired to Care. This is what I love about Drew’s post about work arounds – when we really see others, we also see opportunities.

This is on my mind when CIO published an article about the CIO Squared — the Chief Information Officer who a dons the Chief Innovation Officer hat. Apparently, this is a growing trend. On the one hand, I get it. Finding user patterns in big data sets can easily generate insights. CIO writes:

“With the rise of social media, mobility, the consumerization of IT, big data, and business intelligence, IT-centered innovation is growing. IT leaders are well positioned to sit at the hub of discussions with the heads of business units and departments about the sources of innovation and the technology to support them.”

My challenge is – how well positioned are these leaders to be thinking about what will add value to their customers lives? What job does their customer need done? Can data alone provide this answer? Only within the context of their existing patterns – the use of an existing model. Those constraints aren’t conducive to really seeing the needs of the customers or the possibility of entirely new models.

The CIO Squared can obviously seek out this insight. The CIO Squared might be empathic by nature, or the organization might be an open empathetic organization (where insight is sourced through a network of human information). But these are all big “ifs.” The truth is we live in a data centric world. Business leaders still seek proof, evidence, DATA.

Empathy is one of those so called soft skills that businesses dismiss faster than ants to honey. And, we’re at a turning point in innovation. Empathy is a cornerstone to this turning point – its the differentiation, which according to Patnaik, will enable “companies to serve a higher purpose than just making money… they can create wealth by enriching the wider society we all live in.”

With the CIO Squared trend, are we really heading in the right direction?

This article was originally published by Eli Stefanski on: http://collaborativeinnovation.org/2012/03/empathy-and-the-cio-squared/

I’ve been leading this project, and therefore unusually immersed in the energy world, with a particular focus on practices within the commercial sector. From the start, there has been a clear distinction in how companies approach energy efficiency, and one that parallels an important element of business model innovation.

On the one hand, there are companies that focus on “what is good enough,” specifically relative to their peers. They start by benchmarking their own energy consumption, understanding where they fit vis a vis their peers, and focus on what they can do to be as good as their counterparts.

On the other hand, there are companies who focus on “a better way,” never satisfied with where they are, constantly searching for better. If they start with benchmarking (and they don’t always), they use the data to set energy efficiency targets. They then begin the repetitive cycle of meeting targets, setting new targets, onwards and upwards. They can always do better. There is a laways a better way. They aren’t focused on efficiency as the goal, they are focused on sufficiency —  identifying what energy goals are unique and appropriate to them individually.

This is the passionate trademark of transformation artists.

The parallel to business model innovation is the focus on copying your competitors’ business models versus being a market maker, developing a business model unique to how you are going to create value in the world. Of course, it is good to be aware of the patterns in business models (subscriptions, double sided markets, etc), knowing what competitors are doing but not constraining your options to what your competitors have chosen.

This is what makes business model innovation an art form – and it is what separates the innovators from the share takers.

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New patterns in business models are blurring the boundaries between consumer and producer, and in doing so, creating stronger connections. This is a source of empathy for producers – understanding the people they serve will help them design more appropriate and useable products. It also builds loyalty in the consumer, who starts seeing the vendor as a more than a capitalist.

Yes, crowdsourcing invites consumers to engage and, through this contribution, creates stickiness. But that is about the relationship we want to have with customers, and does not alone create a better product/service. Crowdsourcing is the aggregate of single perspectives. Much like the Guardian seeking to uncover  ”the whole story” through open journalism, individual perspectives still need to be curated, synthesized into the handful of insights that will guide product / service design.

Finally, and perhaps my favorite, new business models are absolutely blurring the line between the public and private good. This is not specific to journalism, though journalism is a good example. A long time ago, in a galaxy far far away, the media was considered the fourth estate - an institution free of political and social influence. But every institution requires a revenue structure, and in their quest to stay profitable, the media built business models structured more around revenue channels than around value to customer. In doing so, they oriented their products towards a private good (those who could buy it would benefit from it) rather than a public good (serving society at large regardless of ability or willingness to pay). Today’s business models are looking at how they can serve new markets, by creating new value. In doing so, the value they provide improve people’s lives, and in aggregate, they improve the public good. These are “both/and” scenarios – and from my perspective, this is one of the most exciting trends in business model innovation.

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In the book, Martin argues for “fixing” American capitalism by focusing executives on building markets rather than playing the “expectation markets.” The latter involves a focus on maximizing shareholder value; the former requires a focus on delighting the customer.

As we discover, its a minor distinction. A focus on maximizing shareholder value won’t actually maximize value to the same degree as delighting the customer. He holds up Apple, Google, and Johnson Johnson as examples. He also makes the economic case with historic numbers. The mandate to maximize shareholder value came about in 1976. Since then, compounded annual returns on the SP 500 stand at 6.5 percent. In the preceding years, the period from the final year of the Great Depression until 1976, compounded annual returns were 7.5 percent. There is a social case as well (primarily that the expectations market is a zero sum game, which has proven very hazardous to the world in the last 4 years).

This focus on delighting the customer was a theme at #dscc11, as well with Monica Menghini, Steve McCarthy, Etienne Doit, and Dennis Michaud all calling for us to invite and delight our customers in product and service design. It also never ceases to be the answer to one of my favorite elements of business model design: what is the relationship we want to have with our customers? What is not surprising (given the focus at #dscc11), but still somewhat insightful is the complex systems required to maintain this focus. Martin illustrates this beautifully through the NFL.

The insights I took away were three-fold:

First, the economic systems need to be in play for delighting the customer. Within the NFL example, this includes salary caps, revenue sharing, and free-agent compensation.

Secondly, the systems need to be flexible and responsive to immediate feedback loops. Never take the system for granted, ensure that it is dynamic. Watch what is happening and make adjustments quickly. Martin illustrates this point with the onslaught of Bill Walsh’s West Coast Offense, and the NFL’s effort to restore balance by tweaking the rules.

Thirdly, the actors must be vigilant (there is that theme again) and innovate as they see the opportunity — Parcel”s anti-Walsh response utilizing a linebacker-centric defense.

What does all of this mean? It means profits. According to Martin:

“Forbes values the teams in the NFL at $33 billion, collectively, up almost three times from $12 billion a decade a go.”

While the monetary value should be significant, it is also important to note that by delighting the customer, the NFL is outshining its NBA and MLB colleagues.

Why? Because it means great match ups, like Sunday’s between #Patriots and Giants. I want to win back some New England pride. I want to unload a few pounds of italian sausage, and a most excellent loaf of rye from my in-laws. And to that end, I’ll put my girls in their #Patriots shirts. My husband will put on the lucky sweater. I will whip up the chili, the ribs, and certainly the wings.

But most importantly, we’ll tune in. Because despite our best acts of faith, and our most certain confidence in Mr. Brady, on any given Sunday, nothing is certain.

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Cube farms for everyone, all the time, or closed offices, for everyone, all the time, etc., aren’t the answer, particularly if the division of those resources is based on the “class” (manager vs. individual contributor) – which is a completely artificial dividing line.

It’s like the assumption that demographics actually mean much of anything – we can make the same amount of money, be the same age, weight, height, sex, and still be different enough that we have far more UNcommon about each other, than we do IN common.

For me, I believe the Introvert/Extrovert language has become a bit polluted – it tends to be too polarizing and non-productive, particularly since it’s almost always (in my experience) misunderstood.

I prefer the language of the VIEW assessment, which is innovation-focused, and looks at where you get your energy when solving problems or making decisions – internally (quiet, solo, solitude) or externally (talking things through with others).

If anyone is interested in understanding the VIEW more deeply, I can provide access to take the VIEW assessment for free (normally a $150 value as part of a 1-2 day workshop).

See details to take a test run (the full version) of the VIEW assessment (takes 5-10 minutes) at http://www.informationarchitected.com/training/one-day-innovation-workshop/

A similar framework and understanding, can be found in Steve Shapiro’s Personality Poker book (and companion deck). As he says “The person you need the most, is the person you like the least.” To this conversation, extroverts (or Externals) need introverts (Internals) and vice-versa – and it’s creating environments where you can enable that to happen successfully, that’s the rub.

I am leading a BIF project that looks at energy consumption through the lens of human behaviors within the commercial sector – the behaviors of executives, employees, and facility directors that daily influence energy consumption. An emerging pattern is one of vigilance: you can never take your eye off consumption (nor the systems, policies, and procedures you put in place to manage it.)  You must be persistent. Vigilant.

Success looks a lot like leadership. Ask people how they define leader, and you’ll most often hear: “It’s a position, it’s authority.” But when you dig, we understand that people consider “real” leaders to be people of vision, empathy, authenticity. Leaders are identified through their daily behaviors – not by their positions or titles.

Leadership, like energy vigilance, is a way of life.

Like innovation. A participant in my study quipped yesterday that ‘Yankee ingenuity doesn’t happen once a year.’ (He also told me that you ‘can’t teach a pig to fly and if you try, you’ll just piss off the pig.’ But that is for another blog post). We understand Yankee ingenuity as part of our DNA, a pull yourself up by the bootstraps mentality, an ongoing willingness to create new models in the face of adversity. We recognize it in our behaviors, nothing specific but in everything we do. We know it’s something that we don’t set up a process for. It’s not something we put on the calendar or the ta-da list. It’s the operating model on which we build our lives.

And this is where I find the so very important, and poorly understood, distinction between product innovation and business model innovation. The formers is about invention. The latter is fundamentally focused on transforming ‘how’ we will create and capture value. It’s about the core principles of the business: What value do we create for our customers? What relationship do we want with them? How do we involve them, treat them, communicate with them, build bonds with them?

‘How questions’ are fundamentally answered with statements about values: How will we dispose of waste? Where will our energy come from? How do we compensate and incent our employees? How do we communicate with them? The answers to these questions become the building block of the company, the blueprint for creating and capturing value. We don’t hold token events to set a plan or an activity.

It simply becomes a way of life.

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