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The successful brands fostering a "shared economy"—those connecting makers with customers, utilizing crowdfunding and alternative currency—are hard to brush off as a passing trend. In a world where consumers have become disillusioned by big corporations, the opportunity to purchase goods (and services) directly from peers is increasingly an attractive way to conduct business.
Crowd Companies, a recently founded council led by writer and analyst Jeremiah Owyang, aims to inject that "Collaborative Economy" movement into Fortune 500 companies through guidance and shared expertise from a team of hand-picked innovators. Two disruptive local e-commerce platforms, The Grommet and CustomMade, fall in the latter group. The Grommet's CEO Jules Pieri shares her thoughts on the endeavor with us, from her interpretation of this "shared economy" to what she believes is the uniting factor among participating corporations: fear.
What is your definition of a "shared economy" as CEO of The Grommet?
I've been excited about this from the minute I heard Jeremiah [Owyang] was working on it. I feel like he's usually ahead of the curve in understanding business trends. I knew it would be good, because what he is seeing, and what I'm seeing and why we decided to join, is something that started with social media and is rolled into a lot of technologies, things like 3D printing and crowdfunding. It's changed the dynamic for what kind of companies have a shot. It's partly because they can create products and get to markets easier because of social media, a kind of sidekick support where people want them to succeed.
Through Jeremiah's business as a consultant and analyst he can see the threat to big companies. So he's trying to create a positive interaction between the big companies, who need to understand business models around crowd collaborating and sourcing, and companies like ours who have access to these communities and products. It can kind of de-risk these relationships. A big company can't just dive in head-first with unknown product creators and makers. It's really painful for retailers; they need safer access to these kind of makers and products. The founding brand members are everything from PayPal to Intuit, Walmart, Home Depot. Big companies, some of them have even had their own social mission, like Whole Foods.
They see the vibrancy of this indie economy. They want to tap us. We get calls all the time—big retailers, manufacturers who want to collaborate—but I like that Crowd Companies is a bit more formal, an institutionalized way to collaborate. Because it can be meaningful to us. These companies can crush you, too. They can waste your time, they have so many more resources, move so slowly. So when you're sitting in my seat, you're skeptical about attaching your future to them. They don't understand how their tiny steps can crush you. The kind of companies that have signed up understand how to use Crowd Companies. It creates an ongoing partnership as opposed to a "one night stand" or a "date." It's a relationship.
What do you think is a uniting factor for these Fortune 500 companies who decided to participate in Crowd Companies?
Fear. They have a lot to be afraid of. From the power that's being organized by companies like ours, the communities that we're assembling. I would like to direct that power toward reversing some negative trends that are happening, even at the big companies. Specifically in retail, it's a race to the bottom. People are only competing on price. These companies know that they need innovative, fresh sources that differentiate to engage with hearts and minds at a different level.
The way we can specifically do that is helping larger companies have access to really incredible makers who are ready to scale. We've been able to prove their success through our own communities and interactions. When I look at the big brands and the little brands, Crowd Companies is almost matchmaking and institutionalizing it. It also protects both parties.
What is it about these big companies that prevents them from being able to generate influential feedback through communities like you do?
I think it's a DNA or a legacy thing. Customers have very limited time, they only want to share with trusted sources. Most of these large companies were founded a long time ago; they don't really have a human face on them. They don't have the personality of having a dialogue; it's not a promise to you. So when they suddenly say "Hey, I want to be your friend," you're not motivated to do it. You expect large scale professionalism from them and products that work, but a relationship? Not so much.
When I look at the list of innovators, our companies start at that point. Start-ups for the most part started in the social media era. If social media didn't exist, we wouldn't exist. In our case, people suggesting grommets, talking about grommets, giving feedback to makers—it's an essential part of what we're doing. Otherwise we'd be doing things from an ivory tower. So it's part of our DNA to create a community. From day one, it's part of our promise. You can see the human beings on video and our live chats. You know who they are.
What can be said about Boston that multiple innovators are based here?
I think we have a great technology innovation base, and that's essential to any kind of push for innovation. It's kind of contagious when you see one company who defies the odds like we have, and like CustomMade has. But so many more are behind us. It's a simple role model thing. Mike, one of the CustomMade founders, and I are just ordinary human beings. People see that and think "I can do this, too."
And then you have a talent base here that is such a competitive advantage. People who work for us are very highly skilled and educated, and more loyal than if we were in San Francisco. It gives us an economic advantage because we invest a lot in training and bringing a new person up to speed in our company. People want to work in a way that is innovative-driven, technology-driven, socially-driven, purpose-driven, and it's a huge part of what we do and Crowd Companies.
· The Grommet CEO Jules Pieri Discusses Makers, Somerville [Racked Boston]
· Things I'm Excited About: Crowd Companies Launches Today [The Grommet]
· Crowd Companies [Official Site]