Creating a Business Around Crowdsourcing

Media Morph: Kluster

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NEW YORK (AdAge.com) -- Every week Ad Age Digital's Media Morph looks at how emerging technology is changing the way consumers get their information and media companies and advertisers present their messages. This week: Kluster.

WHAT IT IS: A start-up, officially launched Feb. 18, that intends to create a framework and business around crowdsourcing.

HOW IT WORKS: It's a community for people who like to tackle projects and solve problems, each of which starts with a defined goal and is broken into phases. Users offer "sparks" -- ideas or solutions -- and then there's a refinement process where people can submit improvements to the ideas.
Community members show support for the ideas they like by investing "watts," or Kluster currency. Kluster uses an algorithm to find the winning idea, and the people who supported the winning idea with their watts earn additional watts, which can turn into cash if the problem is solved. Sound farfetched? Maybe -- but it's being used at the TED Conference to create a product, from idea to prototype, in four days. Kluster also has been approaching brands about how it can apply its crowdsourcing framework to their marketing efforts and even product development. The company is in several discussions and hopes to have a few clients signed with a month or two.

WHO'S BEHIND IT: Ben Kaufman, 21, got his start making iPod accessories, when he realized the products he was making weren't that special, but the process by which he made them -- one that involved retailers and consumers submitting ideas and voting the best ones into creation -- was special. He didn't want to be stuck in that commoditized market for long, so he sold his iPod-accessory company and used the profits to launch Kluster and put to work that product-development architecture for everything from product design to marketing campaigns.

WHAT PEOPLE ARE SAYING: "People who do great projects on YouTube get Hollywood deals. This could help creatives and product designers get discovered," said Tom Rielly, partnerships director, TED.
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