New Opportunity in Crowdfunding?

New Opportunity in Crowdfunding?

In the business world, whether it is trying to penetrate into a new market or understand why your sales have tanked in the fourth quarter, market research is a great tool to help reach your company goals. However, it can also be another expensive overhead cost on your financial statements. In addition, we want this opportunity to be accessible, but according to the US Census Bureau, with almost 90% of firms in the US considered to be small (20 employees or less), they may not have the capital to acquire this type of advantage. Working for the Wisconsin Innovation Service Center here at UW-Whitewater, we have many clients that come to us for exact that reason.  

Collaborata is a company that is committed to solving this problem. Essentially, the company of 10 co-founders crowdfunds market research projects. Their business model is that many people may want the same data in a specific project, and since crowdfunding is on the rise, it can also make it extremely affordable too. Clients submit requests on Collaborata and research firms bid on those projects. Then, once these research projects are released to the public, they can then be co-funded by other users to bring the cost down. Once you are a co-funder on the study, you can be given access to all the data, according to James Risley at Built in Chicago. This prevents companies for paying large amounts for research that another firm may have already acquired.

However, one can also see how this concept may hurt the marketplace as well. As stated before, there are many reasons businesses may request market research projects. But one of the main reasons is because they want a competitive advantage over other firms in their market. So, if many firms in the same industry decide to co fund a project, given that most of them want the same type of data, what competitive advantage do these companies have now? But, it is all about how you perceive market research. Looking at it at a more collective angle, this may not be a problem. Like said before, the goal of Collaborata is accessibility. Making this data more accessible can help everyone in the market to understand their customer base better, not always about knowing something someone else doesn’t. Ultimately, your success as a business depends on capitalizing on your own internal competitive advantage, not depending on someone else for it. 

Do you think Collaborata devalues market research or opens the door to new opportunities?

Referenced article: http://www.builtinchicago.org/2016/09/16/collaborata-crowdfunds-research-projects-make-market-research-affordable