Solvster: Speeding-up Product Innovation Processes via Crowdsourcing
Solvster provides a crowdsourcing platform for „open“ online product development to match consumer needs with companies in a direct way. A large online community combined with Solvster’s professional project management provides an innovative solution to increase product development efficiency in the “fuzzy front end” of the new product development process. The close integration of users increases product success and significantly reduces time to market and cost to market.
Solvster mainly targets innovative small and medium enterprises in a variety of B2C industries, such as Fast Moving Consumer Goods, Product Design, Information and Communication Technologies, Entertainment & Lifestyle and Banking.
Solvster’s innovation project management specializes in the “fuzzy front end” of the product development process. Despite of high expenditures for market research activities, up to 80% of new products fail, mainly because they do not meet customer’s needs. By integrating a large user base in the product ideation and evaluation phase, Solvster does not only increase new product success, but also significantly reduces time and cost to market. Cost savings of up to 300% can be achieved. One of Solvster’s key resources is its crowdsourcing platform which consists of the following three modules:
Trend Quest: Community members comment on and evaluate current market trends.
Idea Quest: Based on the most relevant trends, users generate ideas for new products and services.
Shop Quest: The top ideas are further evaluated in a virtual market test.
Solvster offers a packaged solution including all three modules combined with its innovation management services. To meet customer needs, each Quest is also offered separately. There will be a fixed basic price for each module and a variable price that depends on the outcome (e.g. number of ideas in the IdeaQuest). Solvster is pursuing a penetration pricing strategy and offers its service at a lower price than its main competitors.
Target Market and Competition
Solvster mainly targets small and medium enterprises (SMEs) in the German speaking region. Solvster’s target group are innovative SMEs who are open for cooperation with customers. This represents a market potential of € 780 million in the German speaking region in 2012. Solvster’s solution is applicable in many different B2C industries such as Product Design, Information and Communication Technology, Entertainment & Lifestyle and Banking.Solvster competes with other online crowdsourcing platforms and with market research institutes. Most direct competitors focus on idea generation while Solvster additionally offers a market simulation tool. Currently, there are only a few direct competitors because the market is still very young and unconsolidated. The annual growth rate is 10%.
Companies: The main promotional tools for targeting paying companies will be personal selling and PR activities. New customers will be acquired through networking activities and congress and fair visits. Community Members: Solvster will mainly use social media and viral marketing techniques to establish and to enlarge the community base. Solvster’s user community will be the key factor for the company’s success. Therefore, high attention will be given to community management. To motivate users to participate, prize money and gift prizes will be awarded.
Company, Team and Development
Solvster was established in 2009 as a Austrian GmbH domiciled in Vienna. Dietmar Eglhofer, Ulrike Eglhofer and Martin Benesch occupy the positions of strategy, administration and sales. The main team functions will be in Business Development & Marketing, Community Management, Project Management, Sales and IT Support. Solvster has already conducted different pilot projects with companies of various industry sectors.
Revenues will rise to € 7.2 million in 2014. To expand the business high expenditures in marketing and HR are necessary which finally result in an annual surplus of € 700,000 in 2014; a ROI of 25 % will be generated.To meet these goals, Solvster requires € 1.4 million in bank loans and € 3 million in deposits of silent partners.
Mag. Dietmar Eglhofer