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TechMonday: The Open-Source Consultancy

In the September issue of Fast Company, we look at five consumer electronics products whose design was inspired, or could be modified, by a larger community. Now, a young entrepreneur is hoping to harness that power to go beyond product development and create, in effect, a consultancy for all aspects of business.

In the September issue of Fast Company, we look at five consumer electronics products whose design was inspired, or could be modified, by a larger community. Now, a young entrepreneur is hoping to harness that power to go beyond product development and create, in effect, a consultancy for all aspects of business.

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Crowdsourcing has been used to try and balance the budget, lend money, even develop a business plan. But Ben Kaufman’s idea could help companies reduce their risk in a number of areas by using the open-source model.

Kaufman, an excitable 20-year-old entrepreneur from Burlington, Vermont, was doing a pretty good job as the founder of Mophie, an iPod accessory maker. But a few months ago, he was helping set up his company’s booth at MacWorld and got depressed when he saw that his $20,000 set-up looked just like everyone else’s. So, with hours to go, he chucked it, bought a bunch of 2×4’s, and created a rough-looking booth where he could test his “Illuminator” concept that had been rattling around his brain for a few years.

Considering the bevy of iPod accessories in the marketplace, getting a new and original product on shelves is a tough proposition. He rationalized that if you had a community of people actually designing the product, not only would the market testing be taken care of, but you’d also have a large number of people excited about the product due to their participation in its creation and ownership in its design.

So Kaufman solicited ideas from the MacWorld attendees, and through a voting process, narrowed down the ideas to three. The result was the Bevy, a combination bottle opener and iPod shuffle holder, thought up by a 17-year-old, and on the market now. The next product, still in the production phase, is an iPod dock with a large touch screen that will let users watch movies as well as listen to music on their iPods.

But Kaufman believes that simply coming up with iPod accessories woefully underutilizes the Illuminator concept, so he’s spent the past several months expanding the idea to become, in effect, an open-source consultancy.

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When a person signs up to join the Illuminator community, he fills out a questionnaire detailing his expertise in certain areas such as design, engineering, or marketing. Members can post their own ideas or browse through the projects created by the community, or ones posted by companies. While a good majority of the projects are going to focus on product design, Kaufman says projects can also include things such as marketing and advertising campaigns, business plans, or anything that can benefit from mass input.

If a member thinks a particular project is a good one, he can vote for it by investing a number of “Watts,” the going currency in the electric-themed Illuminator, and suggest changes to the project as well. Using a number of algorithms, a member’s vote will be weighted according to his experience, as well as his track record in backing other successful projects on the site. Members will also be able to build their influence and track record on the site by collectively pooling their Watts into investment groups, or by investing in other members with more proven histories on the site.

A project gains momentum depending on the level of support it gets from the community, and moves along the development process until it hopefully gets acquired by a company. In that case, members who participated in its creation will then see some of the revenue from the product, based on when they became involved, and the extent to which they had a hand in its creation.

Already, 25 companies have expressed interest and 50,000 people have already signed up, says Kaufman, who plans to have a full public beta version running by January. Hopefully, it will feature more than just Apple add-ons. “We never really wanted to be an iPod accessory company at all,” says Kaufman. “We were just good at it.”

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