1. How it works?
The essence of ideagoras is to bring together bright and creative people and companies which are in need of innovative solutions for complicated problems. InnoCentive.com, one of the examples of ideagoras, refer to talented people as “Solvers” and to the companies as “Seekers”; the problem in question is called a “Challenge”.
Let us consider Innocentive.com to explain how the ideagoras works. Even though there might be variations in operations of such “market places for creative solutions”, the general principles remain the same.
The companies which cannot resolve a problem internally, within the available R&D department, can post a problem on the InnoCentive website. As a prerequisite, the company – “seeker” – should already be registered on the site.
As soon as the problem is announced, registered problem-solvers (creative people of any profession, mostly talented scientists) can propose their solutions for the company. Consequently, the company can try out the proposed ideas and select the best one. The author of the best idea will be rewarded.
Generally, ideagoras allow talented individuals and companies in need for innovative solutions to meet together, when former browse available challenges and the latter post their challenges on the website. Innocentive.com guarantees confidentiality, so that the solver will probably never know the company for which he worked and, vice versa, the seeker will never know the person, who solved the matter under question.
Can ideagoras give good results?
According to the latest article in BusinessWeek on ideagoras, InnoCentive helped to find solutions for 400 challenges out of total 800 submitted. This alone represents that ideagoras can work.
Moreover, as an indirect confirmation that ideagoras can give good results, InnoCentive has attracted a large set of well-known organizations, including Procter&Gamble. Highly unlikely, that the organizations would join a market place for innovation if these marketplaces were not considered to be successful, or at least promising methods to generate creative solutions.
As well-known proverb puts it, two heads are better than one. In cases of business, 170000 registered solvers can be better than single R&D department. The underlying principle is that there are huge chances that diverse group of talented individuals, with different academic and educational backgrounds will work over your problem. Therefore, there pot4enbtially a large set of solutions for your problem outside your organization. As a consequence, one of the proposed solutions is very likely to be exactly what you were desperately looking for.
Advantages to the firms.
There is much more knowledge out there. There are chances that somebody has a [potential solution for the problem.
Ability to reach broad set of talented professionals. The ideagoras potentially allow to reach individuals from different fields of expertise, such as academics, engineers, entrepreneurs and other professionals. As a result, proposed solutions can be indeed out-of-the-ordinary, as each solver investigates the problem from his/her expertise. Sometimes solutions can be found from the different areas of business and science.
For each problem, the company will receive hundreds or thousands of solutions. Therefore, there a potential to create “solution bank” and deploy the ideas later on, when an opportunity arises.
Ideagoras are rather low-cost methods to generate innovative ideas. Maintenance of large R&D departments within the company is costly, especially for medium-sized enterprises. Therefore, occasional reference to ideagoras can be less costly than maintain an army of scientists within the organizations.
The ideagoras allow companies to exploit the benefits of the talented minds without requirement to hire them for full-time job. Thus the company does not enter any employment obligations, does not have to pay annual salaries and compensation benefits for the individuals. As soon as the best solution was chosen, the company only has to pay a reward and protect intellectual property rights. In the long term, reference to ideagoras to solve the problems is a less costly way.
Finally with the help of ideagoras the company can receive thousand of solutions in a very limited period of time. Imagine: thousand of individuals are thinking about the problem, employing available resources to solve the problem and they make it ultimately faster.
Overall, the key benefits are clear: ability to reach set of diverse, talented individuals form different areas of expertise and get hundreds of ideas faster and at a lower cost.
Disadvantages for companies.
1. The problem might go unnoticed by the community of solvers. Even though the company posts the problem, it might happen that nobody is able or willing to solve it.
2. It is not a fact that the solution proposed by “solvers” will be better than the possible solution of company’s R&D department.
3. How do the company should measure the reward for the successful solution? How to ensure that the reward do not outweigh the actual value of the proposed solution? So the issue of accurate setting of rewards may be problematic.
Advantages for individuals.
One of advantages for individuals that they can utilize their talent and solve a complex problem, benefiting the company and sometimes even society in general. The ideagoras help individuals to fulfill one of the last needs of Maslow’ hierarchy of needs – need for achievement.
Next, the financial reward is an advantage for individuals. The successful “solver” in InnoCentive can receive up to one million dollars as a reward.
Further, one of potential advantage for individuals is that they can join a community of the most talented people in the world. The interaction with them, especially while solving a problem, can contribute to one’s development and inspire continuous flow of personal innovative ideas.
Furthermore, often creative people cannot work in bureaucratic conditions (“eight-to-five” working day) of large organizations, as creative individuals seek for more freedom. Ideagoras allow these people to be freelancers and live their own schedule.
Disadvantages for individuals.
A solution for, say, Procter&Gamble’s problem can yield the company millions of dollars in revenue. Therefore, some 50,000 dollars in reward for a person who solved the problem looks really miserable. The disadvantage is that the person might not be rewarded accordingly.
The protection of identity might be a disadvantage as well. A successful “solver” might never get personal credentials for his/her work.
What’s more, there can be potential disadvantages concerning intellectual property rights. The ideagoras require individuals to transfer intellectual property rights for the winning idea to the company. Again the company can turn the idea into profitable patents, trademarks and new inventions and generate profit, while the author will have only a fraction from these profits as a reward for his/her idea.
Moreover, consider the following situation: the company initially “rejects” the proposed solution, but in Reality Company’s R&D department start working over it, introduce few modifications and claim that the solution was entirely developed in the company’s labs. There is a possibility that a company can start to play unfair in regard to community of creative people.
Conclusion.
From my point of view, ideagoras is not entirely new concept. For example, a company could have an organization-wide intranet, where problems could be posted and solutions from all people in organization gathered. However, the scale of ideagoras is worldwide, thanks to the Internet.
Initially, ideagoras were designed for individuals to work over challenging assignments; currently, there is a trend that ideagoras help to link together not only companies and individuals but also individuals and individuals, i.e. allowing people to organize into virtual or real groups and collaborate over a problem. So, being a solver might be now not only an individual pursuit, but rather teamwork.
Ideagoras are sometimes associated with eBay for innovative solutions: somebody sell, somebody buy the solution. Taking into account that there is always huge amount of complicated problems and there are people with desire and expertise solve problems, ideagoras, when properly designed and marketed, can be very viable business models, as they suit the Internet perfectly – ideagoras are simply middleman, a virtual platform.
