Technology entrepreneurs have much to learn from current innovations in the music industry, writes Alan Gleeson.
The British band Chicane recently uploaded a track called Big Country (Ruff Mix) to its website. The track was unfinished; the decision as to what happens next largely left to the band’s fans. Chicane asked them to vote on whether they should even finish the track, and they are letting listeners leave feedback at specific points in the production.
For example, 17 seconds in, someone has posted the comment “longer intro without vocals”. Others pitch in with suggestions elsewhere. This latest example represents yet more evidence that Henry Ford and his “any colour as long as it’s black“ production-orientated focus has largely been consigned to history – at least outside of Cupertino.
The age of anonymous consumers, collectively participating in the production process, has arrived. Sites like Threadless, at which you can submit a t-shirt design for consideration, and also vote up other designs, are leading the charge. I think it’s time entrepreneurs took a similar approach to building their businesses.
Far too many focus on the supply side, building services with weak demand and letting programmers decide the feature set. Entrepreneurs can be slow to collect impartial and independent feedback, usually to their detriment. These same entrepreneurs tend to be those who are reluctant to share their idea, lest it get stolen, and who insist on NDAs under the misguided impression that they serve a useful purpose.
On the flip-side, those that have a strong customer focus in their DNA from day one will have a much better sense of the market appetite for their product, and the features of most value to their target audience. Perhaps they can even consider letting customers play a role in the production process.
Mr Ford would not have approved. He also once famously claimed that if he had asked people what they wanted, they would have said faster horses. And customer participation must not supplant judgement: the entrepreneur always has the final veto.
Yet this unfinished Chicane track is equivalent to a Minimum Viable Product (MVP), and releasing it prematurely, primarily for feedback, is an approach to production, as described by Eric Ries. In The Lean Startup, Ries describes how entrepreneurs are encouraged to launch an unfinished offering early, with a reduced feature set.
This can then be used to test assumptions about the product-market fit or likely market demand, instead of the more inefficient process of developing something in its entirety in the hope that “they will come”… often finding that they don’t.
The approach used by Chicane, is also a great example of crowdsourcing, a comparatively new phenomenon, first mentioned by name by Jeff Howe in 2006. It signifies a marriage between “the crowd” and “outsourcing” tasks to a distributed group of people, leveraging the internet as a means to manage the process and to access the crowd. Chicane’s canny manoeuvre has married MVP with crowdsourcing.
Potential consumers are thus participating in production, advising on market fit by voting on the track’s suitability for release, as well as providing direct feedback regarding what would make the product more appealing. The entertainment industry is increasingly a “winner takes all” market, where a small few artists capture the lion’s share of value.
Could this new approach help incumbents stay on top? For niche artists like Chicane, figuring out early on what their fan base thinks of a production could offer valuable insights which can help the band make more informed decisions about what they should release.
From a marketing perspective, this approach also helps ensure that the band has remarkable content to promote. If the track is completed and released, an army of 100,000+ fans on Facebook, some of whom will have personally voted for Chicane to complete the track, will likely then help them with marketing. If the band decides not to proceed, it will have saved itself time and money.
Combining a minimum viable product with a crowd, offering real feedback and insight, represents a potent mix, something James Surowiecki also described in The Wisdom of the Crowds. He demonstrated how in many instances the crowd was more powerful at predicting outcomes and making decisions than an individual. In recent years, many larger businesses have taken this advice on board, and have used the crowd to gain access to a wide population willing to participate at no cost.
Heineken has used the crowd for new bottle designs, Walkers for new flavoured crisps, and Dell and Starbucks for product innovation. Where once market research was time consuming and expensive, now it can be inexpensive, bountiful and executed in real time. Governments are also getting in on the act, as evidenced by the Irish government’s attempt to crowd-source job creation.
While the Lean Startup approach is already accepted by many tech entrepreneurs, the use of crowdsourcing to aid during both the creation process and in subsequent decision-making is not yet commonplace. For technology entrepreneurs in the UK, embracing these new approaches will become increasingly important.
Some companies, such as Seedrs, which recently launched a regulated crowdfunding offering, have already embraced this attitude to good effect. In Ireland, Dublin Web Summit recently crowdsourced their speaker list for their upcoming conference, using Twitter to add virality to their efforts.
Getting out and meeting real customers provides access to great qualitative data which will aid your decision making. A host of competitively priced services can help you leverage the power of the crowd, be it website survey tools like 4Q, UserVoice or Feedbackify for collecting and managing feedback, or web usability tools like Fivesecondtest.
All of these marry the benefits of crowdsourcing and aspects of the Lean Startup approach to entrepreneurship. Involving customers more in production, and, crowdsourcing in its many guises, are both here to stay. The sooner more British technology entrepreneurs embrace these approaches, the better.