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Crowd wisdom: crowdsourcing from Cambrian House   |  July 11, 2008  

Cambrian House crowdsources its way to a spot in the PICK 20

By Trevor Marshall

It is immediately obvious that Cambrian House is not a traditional technology venture.

Its home on the Web includes a virtual tour of the company’s Calgary offices, hosted by Her Majesty Queen Elizabeth II, a small but growing gallery of inductees into the National Viking Association and profiles of its team and board members that read like speed-dating write-ups. And the CEO is quick to compare Cambrian House’s business strategy to TV shows such as American Idol and Seinfeld.

But beyond the irreverent tone is a very serious proposition, not “build it and they will come,” but “give them some space and they will not only come, but also build it when they get here.” Cambrian House started as an online platform where innovative people could harness the wisdom of the masses, engage the participation of experts and even secure funding to turn ideas into commercial products and services. The concept even has its own term: crowdsourcing. Cambrian House’s application of the crowdsourcing concept as a business model for incubating start-up ventures earned the company a spot in the PICK 20.

What’s more, Cambrian House itself has attracted some support for its own big idea. The folks behind the community announced in late May that Cambrian House has joined forces with an arm of New York-based private equity firm Spencer Trask to migrate its band of Vikings to a new community, VenCorps. The Cambrian House community will operate much the same way as always, but Spencer Trask will run the show and is sweetening the pot with a $50,000 start-up fund available to members.

Create, test, build, sell, profit
The crowdsourcing concept is simple. A member has an idea, puts together a pitch and posts it for comment. Other members of the community vote on the idea and provide feedback about possible tweaks, market opportunities, how to differentiate it from competing products and so on.

Ideas that do well at this phase attract members from the crowd who have skills that can help turn the idea into reality, in return for payment or a share of the royalties. Creating an application would need code jockeys, for example, a better mousetrap would need someone with manufacturing resources, and so on.

Good ideas also attract financing. This could take the form of a pre-order for the product. If an idea becomes a product, more members of the community may join the team to help market it. Finally, assuming the idea makes money, the originator and any members with royalty stakes will split the profits. And all of this may happen without the members of the team ever meeting face to face.

“It’s like American Idol, [except] instead of me deciding that Kelly Clarkson is the person I want to support to make a CD, I have this way of letting all of my customers vote and tell me which artist I should heavily produce,” explained the chief executive officer of Cambrian House, Michael J. “MJ” Sikorsky. (Likes: Fast Cars; Hamburgers; Business. Dislikes: Outdoors; Sunlight; Sleep.) “Compared to the traditional approach of (record companies) trying to decide which artist to promote, this is much more effective because they already have an audience wired in to purchase the artist’s CDs. We’re sitting here looking at the wisdom of the crowd and we know that open source is working — look at American Idol, Wikipedia, the stock market — so the question is, how do we tie all of this together into a new business model for launching businesses? That’s what we’ve done at Cambrian House.”

42,000 collaborators
With this model as their mantra, the Cambrian House innovation community has happily collaborated on creating, developing, testing and funding new projects and businesses, and done so by drawing on the talents of more than 42,000 members from around the world. The idea for Cambrian House germinated in October 2005 and the company’s Web site notes that to date, more than 6,900 ideas have been submitted to the wisdom of the crowd.

Just as some American Idol contestants can’t carry a tune in a bucket, not every idea forged in the Cambrian House community has been a good one. But the wisdom of crowds has generated some successes. Sikorsky points to another PICK 20 winner, Mob4Hire, a company that applies crowdsourcing to the task of testing services built for mobile phones. Those who register as testers get compensated for their work, while the application developer gets access to a global testing base without having to cut deals with wireless network operators in each target market.

“It’s not going to be a Google or a YouTube in-your-face consumer success, but I think they’ve built a really solid business,” Sikorsky observed of Mob4Hire, adding that the company’s inventor built the whole business within Cambrian House. “He didn’t even write one line of code. He just directed the software developers inside the Cambrian House community and then watched the whole thing happen.”

Sexy ideas key
The reason Mob4Hire made it out of Cambrian House’s community-driven idea forge is that the person with the idea was able to attract the talent from the community to make it happen. Getting people on board is critical when crowdsourcing, because those with the talent only have so much time to go around. “The more sexy an idea is, the more we’ll pull in people. If I’m looking to get crowdsourcing working for me, I need to compel people to work on my project,” Sikorsky said.

Will VenCorps fly? Certainly it’s off to a good start, in the form of more than 42,000 Cambrian House community members who obviously believe that the idea to generate businesses collectively is a good one, or at least one worth watching. It remains to be seen how many migrate from Cambrian House to VenCorps, but with its community sailing to a new home, Cambrian House will focus on supplying its crowdsourcing platform (called Chaordix) to Spencer Trask and other companies looking to draw on the power of communities. Cambrian House will also continue to develop some of the early companies to emerge from the Cambrian House community, such as Gwabs, Greedy or Needy, Prezzle and FilmRiot.

Not bad, given that even Sikorsky has admitted Cambrian House started as a company about nothing. “It’s very Seinfeldian,” he confessed, referencing the sitcom often called “the show about nothing.” “We used the audience to help us figure out what our products were going to be.”

Innovation? Check. Commercialization? Not so much
Cambrian House CEO Michael Sikorsky has some strong and, he freely admits, unpopular opinions about how Canada stacks up against the rest of the world in terms of Web 2.0 innovation. “I think that Canada is doing amazing things in terms of innovation and what we’re thinking about, but I do not think we’re doing as well as the United States in terms of blowing up our ideas to become massively commercial, successful businesses,” he said. “We demonstrate great thought leadership — I’d say we’re on par with any other nation in terms of Web 2.0 innovation — but what ends up happening is we always end up getting acquired.”

This situation, Sikorksy believes, is not unique to Canada. “Nobody can compete with the United States on that right now. The U.S. is just killing us at it.”

That said, he also does not think it’s a problem. In fact, he describes the American appetite for start-ups as “pretty sweet” from the perspective of a CEO building a company. “I’m changing my home base to California,” he admits. “Once I understood just how amazing the start-up substrate is in California, I felt that I’m putting my own company at risk by not having more of a connection down there.”

Does that mean he’s down on Canada? Sikorsky insists not. “I think I’m kind of realistic on Canada.”

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