Crowdfunding is also another hot trend at the moment. The market is growing fast, touching every day upon different sectors and applications, as also Crowd Valley has been observing in the last 12 months.
Now, imagine if the the two phenomena would merge. What the result would be? A neologism and a new crowdfunding application: intra-crowdfunding or enterprise crowdfunding.
IBM, the multinational colossal for computer hardware, is the the first company to try out crowdfunding in a corporate context. With more than 430,000 employees, IBM reproduced the reward-based, all-or-nothing crowdfunding platform model for its internal projects. The crowdfunding program rolled out in three experiments that started during the summer of 2012. The company never opened up the crowdfunding process to the entire staff, but chose to restrict it to specific groups or departments. The largest experiment was conducted within the IT department and focused on tech projects. The employees taking part to the crowdfunding initiative did not pledged their own money, but had a budget from the company to be spent on projects that were not theirs. According to the promoters of the intra-crowdfunding experiment, the results were very much satisfying, with good participation rates and some projects reaching an interesting level of pledges.
Effects of Intra-Crowdfunding
Internal crowdsourcing initiatives have already been successfully applied by many firms before, with the result of fostering innovation and employees’ engagement with the company. These are also the effects that the IBM intra-crowdfunding experiment caused among the employees taking part to the initiative, as one of the organizers reported. Nevertheless, intra-crowdfunding requires quite some of the employees’ time to prepare the projects and a budget for the pledges. Since the funds for such initiatives are not unlimited, IBM is looking to find a way to make intra-crowdfunding self-sustainable. One possibility is to offer the internal crowdfunding process as a product for clients, as declared by one of the promoters of IBM crowdfunding initiative.
One thing is sure: if IBM manages to monetize the intra-crowdfunding initiative, while increasing innovation and employees’ engagement, many other companies will probably start enterprise crowdfunding programs. And, like it happened with other crowdfunding applications before, several different models of intra-crowdfunding will emerge and, who knows, maybe even an equity one...
Drake, D. Enterprise crowdfunding: How an IBM experiment improved innovation and morale. Venturebeat.com. (2013)
Root, A. IBM's Internal Crowdfunding Rewards Employee Innovation. Crowdfundbeat.com. (2013)
Credit to: Kevin Dooley: https://bit.ly/p/62QVKf
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.