The Crowd Effect

Are you an entrepreneur?

If yes, stop for a second and imagine what you could do if everybody (yes, everybody) was helping you. Unlimited possibilities! Anything could be done! However, in order for that to happen it might be required for you to be in the business of saving the earth (but maybe you are?).

For rest of entrepreneurs, we could still get a lot done with a little help from a few other people. Maybe you are in the business of selling something many people can understand. Or even better, are you in the business of creating a product or service that thousands of people would buy once ready? And if all of those people end up investing little bit of money in your company, they all got an owners’ incentive to help you.

Let’s call this The Crowd Effect.

Let’s take an example.

Say you have a new start-up producing custom-made shoes based on individual measurements. If you run a crowdfunding financing round and get 200 individuals all over Europe investing in your company, you just got 200 new marketing agents.

In the old world, you were supposed to get this 1 M€ from one or two Venture Capitalists who said “they have connections” and therefore are “value-adding”. Ever heard these things before? Probably yes. So what happens after that? Afterwards you may find out they don’t really know so many people in your industry, maybe in some other industries. And getting connected to a friend of theirs who happens to run a shoe shop doesn’t really take you anywhere. You end up using big portion of this 1M€ you just raised in sales and marketing.

How about re-thinking the whole thing with The Crowd Effect? Imagine getting that 1M€ from those 200 people, who one way or another are interested in your business. Maybe they see it as a good business opportunity or maybe they are in that business themselves. But for sure, the day after they invested in you, they all start marketing your company’s products like never before.

That’s something you cannot buy with money!

But that’s not all. You suddenly may find out that you also have 200 market sensors active. With the right communication tools (not to make it your full time job) you can learn what kind of shoes people really want (market research), what kind of sales channel opportunities there are (advice) and probably some useful piece of advice as well.