Newspaper article International New York Times

Using Crowdsourcing, Not Focus Groups, to Find What Will Sell

Newspaper article International New York Times

Using Crowdsourcing, Not Focus Groups, to Find What Will Sell

Article excerpt

To innovate, business owners are turning to the masses instead of consultants or focus groups.

Some of the best business ideas are inspired by others, or so the wisdom of the crowd goes. That is leading more entrepreneurs to tap into other people's brains -- rather than just their pocketbooks -- to test new products, set pricing and bring ideas to market faster.

Lee Mayer discovered the benefits of crowdsourcing after she had moved to Denver from New York City and struggled to find an interior decorator who would work within her budget. Then, she met a decorator who wasn't booking enough business. And with that, an online interior design site called Havenly -- offering services that were affordable for everyone -- was born.

But before Ms. Mayer took any steps to set up the company, she turned to the crowd for advice, sending out thousands of survey forms to answer one crucial question: Would people pay for this decorating service? Before quitting her job as a business strategist and spending thousands on a new venture, Ms. Mayer wanted some sign that the venture would succeed.

"You want to make sure other people believe what you believe," said Ms. Mayer, who has an M.B.A. from Harvard and has worked as a consultant. "That takes some risk out of it."

Ms. Mayer, now the chief executive of Havenly, has been turning to the masses for answers ever since, including testing her pricing, products and website design. (The interior decorator who didn't have enough clients is now her design director.) Development is costly, reasoned Ms. Mayer, who even learned coding to start the site, so it's important to make choices that are as right as possible.

"Crowdsourcing is fast, cheap and scruffy," she said, "especially when you need to move quickly."

While well-established crowdfunding sites like Kickstarter and Indiegogo dip into people's pockets, crowdsourcing taps into their brains. Experts say that turning to the masses can even yield sharper answers than other methods.

"Crowdsourcing has replaced focus groups," said Chris Hicken, the president of UserTesting, a company based in Mountain View, Calif., that specializes in sifting through the ideas of crowds on behalf of online businesses. "It's faster and a lot cheaper. Innovation is going so fast that we need faster answers."

UserTesting, for instance, helped Speek, a conference calling service, adjust its web design to make it more understandable. As a result, registrations jumped 60 percent, according to Speek.

Ms. Mayer turned to UserTesting, which offers access to more than a million users, for ideas on Havenly's site design. Based on the feedback, one of the things she added was a budget calculator.

Such entrepreneurs may be onto something. Research shows that the best ideas come from outside a company, said Elizabeth Gerber, an associate professor of design at Northwestern University. "Employees don't question as much," she said. "Every decision feels more momentous in an innovate-or-die world."

Harnessing the brain power of outside consultants and focus groups can be costly and time-consuming. But crowdsourcing gives companies a bigger toolbox. Companies can both test new products and develop customer loyalty, Ms. Gerber said.

Speed is a crucial ingredient for success these days, researchers have found. Getting early input from consumers helps companies switch gears faster and more cheaply on products destined to fail, according to a Boston Consulting Group survey last year. …

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