Mind the Innovation Gap

What do Osombie, an independent zombie movie about Osama Bin Laden (a scene from the trailer), and a Brooklyn book depository have in common? Both are being funded via Kickstarter, the online funding platform that lets consumers 'fund and follow creativity'.

Every week, tens of thousands of people pledge millions of dollars to a vast array of products, campaigns and causes. Since its launch in 2009, more than $130m has been pledged and thousands of businesses and projects have received the cash injection they needed to get their products and ideas to market in a matter of days.

Crucially, young entrepreneurs reward their benefactors with products or recognition, but do not sacrifice any equity in their business. They always maintain ownership and complete creative control of their work, while Kickstarter takes 5% of the investment each project nets.

These are not just pet projects; last year, a bid to build watch straps for the iPod Nano raised $941,718; the product is now sold in Apple Stores.

Compare this growth with figures from the Bank of England, which last week revealed that net lending by banks to cash-strapped businesses collapsed by nearly £10bn last year. Liberal Democrat peer Lord Oakeshott described the lack of lending as 'a knife in the back for growth and jobs'.

Marketers, traditionally working at the hub of innovation and NPD, have felt this 'knife in the back' in the form of ever-decreasing budgets. Many of Kickstarter's ambitious, unwieldy and, often, emotionally driven projects would never have seen the light of day had they relied on traditional funding models or corporate buy-in.

However, the mass democratisation afforded by the internet, and innovative funding methods, such as Kickstarter, have levelled the playing field. It's a worrying trend for marketers who must face the fact that innovation is thriving; just rarely in their business.

THE UPSHOT

What brands should know about driving innovation

The Kickstarter effect

If individuals can use sites such as Kickstarter, where people can crowdsource funding by soliciting pledges, to persuade strangers to invest in projects that may otherwise never see the light of day, marketers can no longer hide behind ever-decreasing budgets as an excuse for lack of NPD. As cash-strapped businesses cut back on investment in research and development, innovation is in crisis. However, as the success of small businesses powered by Kickstarter underlines, small projects can create big ripples.

Internal crowdsourcing

The best ideas can come from the most unusual places. Crowdsourcing has been an advertising industry buzzword for years, but smart marketers are now applying the same principles to garner support within their organisations. Procter & Gamble, for example, embraces open-sourced marketing, where individuals across the business, as well as agency partners, can suggest ideas for NPD and innovation.

Corporate hierarchies are dying a slow death. Forward-thinking marketers have realised that it doesn't matter where good ideas come from: the key is that they are listened to and acted upon quickly.

Embracing the possibility of failure

Facebook's mantra of 'Move fast and break things' may not reflect the day-to-day reality for marketers within big corporations, battling myriad KPIs. However, smart marketers realise that those brands that are truly investing in cutting-edge innovation may indeed fail. Those corporations paralysed by a fear of failure should beware the creep of the Kickstarter effect, where good ideas are never ignored.

 

Nicola Clark is Marketing's head of features. Follow her on Twitter: @nickykc.

This article was first published on marketingmagazine.co.uk