InnoCentive...Uniting Creative Thinkers

InnoCentive is a company providing a global virtual platform, connecting companies, academic institutions, public sector and non-profit organizations, that can post complex challenges, they are seeking solutions for.
People can become members (solvers) of the website and suggest creative and innovative solution to the challenges and gain rewards.

The business helps to connect hundreds of thousands of creative thinkers with specialized knowledge or new ideas, trying to help solve problems for the seekers. The solution seeking companies get access to outside knowledge and fresh ideas, which often “inside” people could not have thought of, or when asking consulting companies for help, would have been much more expensive than the rewards offered to the successful solver. At the same time InnoCentive also offers consulting services and helps restructuring the organization in a more innovative one.
At the same time the platform gives the chance to intelligent and creative people to earn important amounts of money by providing new ideas and connects them with companies, they would not have had access to before.
InnoCentive does not charge any fees for solvers, therefore attracts them and increased the creative community they offer to seekers, who of course have to pay a fee to be able to access the community and post there challenges or use InnoCentive’s consultancy services.

InnoCentive offers its service to two basic costumer groups: Corporate and Non-Profit Organizations. Whereas Corporate Companies are paying a fee to be able to post their challenges on the site and pay an award to the successful solver, InnoCentive in collaboration with Rockefeller is providing funding to help Non-Profit Organizations to access the worldwide innovative community.

As mentioned earlier the main revenue source of InnoCentive comes through subscription fees paid by seekers, commissions on rewards paid to solvers and consultancy services, which enhances their possibility of helping Non-Profit Organizations and benefiting the poor.

There are quite a few companies working in the Open Innovation industry, such as Innovation Point (http://www.innovation-point.com/index.htm) for instance. Innovation Point, like many other businesses and in opposite to InnoCentive, is mainly suggesting consultancy services and software, but not a platform connecting companies with creative thinkers.
Another competing business is Philoptima (http://www.philoptima.org). In contrast to InnoCentive, Philoptima is focusing on only philanthropy related topics, such as education, health or the environment for instance. Still they are using a quite similar business model, as they suggest as well an innovation platform, connecting companies to creative thinkers in order to find solutions to their challenges. Besides the fact that Philoptima is only targeting humanity/community related challenges, they also differentiate themselves from InnoCentive, since they are not offering consultancy services to create innovative organizational structures. Nevertheless they offering the service of helping to find an adapted consultant (a member signed up to Philoptima) to a specific challenge.

The business model used by InnoCentive is unique to the web. Outside the virtual world it would hardly be possible to unite so many people, working in so many different fields to find adapted solutions to challenges. The R&D is going through changes and outside opinions are getting more and more important to help finding new, breakthrough solutions, therefore uniting people from different fields, working outside the companies boundaries becomes crucial. The Internet enables companies like InnoCentive to reach creative thinkers around the globe and create a huge database. The interest in the topic and the need for open innovation growing, there is still no end in sight for the creation of new companies using the same or similar business concepts.

Even though InnoCentive is certainly one of the major players in the Open Innovation industry and they are bound to last for still some time according to the reasons mentioned earlier, there are certainly ways for them to expand their business.

The company was founded in 2001, but still seems not to be much known in Europe, where the concept of Open Innovation and crowdsourcing is just emerging. This gives the business the possibility to increase their customer base, by using marketing and advertising, trying to make more people aware of how open innovation can benefit their businesses.

Another possibility would be to expand their consultancy services by creating highly experienced InnoCentive teams which can come inside the company to help with brainstorming and finding new solutions, if the company is seeking for external help but does not want to expose their challenge on the website.

Open Innovation becoming an essential factor to modern management, I believe it would be highly beneficial to offer their consultancy services to management schools to train the talents of tomorrow on how to use external and internal solutions.

I believe that time and evolution in open innovation will bring even more new ways of how to expand a business model as the one discussed above, since the future of successful businesses is based on innovation and united creativity.