A 2017 World Economic Forum article defined the “crowd economy” as one characterized by a “focus on economic models powered by ‘the crowd’, including but not limited to crowdsourcing and crowdfunding. Examples of companies that fit this model include Kickstarter, Wikipedia, and Waze. Although they operate in different industries, they all benefit from a model where people pool together knowledge and resources to form a collective wisdom, which in turn attracts more users in a virtuous cycle. This model has been applied to areas like fundraising, information, and transportation, sometimes achieving great success and other times missteps and failure. HeroX is another company that fits into the mold of a crowd company. It targets the realm of employment and brings together business and social challenges and driven individuals willing to solve them.
The platform built by HeroX allows organizations to create profiles and design challenges for others to solve, with the winners often receiving compensation as a reward for their efforts. The types of challenges posted on the site are wide and diverse, from business to engineering to social impact.
I had the chance to interview HeroX co-founder and CEO Christian Cotichini to learn more about HeroX, its impact on work, its dedication to hosting a diverse set of competitions, and the challenges of finding the right business model for a crowd company.
How did the idea for HeroX originally get started?
Christian Cotichini: I’m a long-time entrepreneur, this is my fourth startup. After the last one, which we sold to Dell in 2012, I ended up having a sabbatical. But I got the itch to do a new startup, and one of my focus areas is destructive innovation. So I looked for what would be a big field for making a big impact. The thing that I got really clear about was crowdsourcing and using the Internet for collaboration. If you think about it, the Internet really hasn’t impacted the labor market in a fundamental way. We still get jobs with job interviews and job descriptions, so I really saw an opportunity for the Internet to really disrupt human effort.
During my sabbatical I met Peter Diamandis, the founder of the X Prize Foundation, and I really liked what they were doing. We started collaborating, and Peter had had a lot of people asking to run prizes while he was running X Prize. He got the idea for making a platform, and actually started developing and envisioning a platform that would democratize the X Prize model. So we joined forces, and that’s really how HeroX got started.
You make an interesting point about how the Internet hasn’t affected labor as much as things like media and entertainment. Why do you think that is?
CC: What I’ve learned is that the Internet is a democratizing force. It distributes power. From an economic perspective humans fundamentally do two things. We consume, and we produce. The consumption side in a free market is very much inherently decentralized. There’s no central control over consumption or over how consumers behave. When the Internet came along and it immediately disrupted how we bought things, how we did services, and created huge opportunities for companies to reinvent how to serve customer needs and build new products and services.
The production side is very different. It comes from the post-World War II industrial model and the rise of the modern corporation. It’s very centralized, you apply for jobs and the decision-making is centralized. And that central control held back what the Internet could actually accomplish. But as we go through that control is starting to get chipped away at more and more. And as millennials, who are the digital natives, continue to become a larger part of the workforce, they’re far more comfortable with rethinking these models and giving up old approaches that they see as backwards. That’s really the trend that’s happening now.
In the Photo: A challenge on the HeroX platform. Photo Credit: HeroX.
What kinds of competitions have been posted on HeroX?
CC: When we first started, we wanted to focus on creating a really effective platform. So we started with just a couple of projects that were nonprofit, social-impact oriented, and then as we’ve expanded we’ve continued to expand the projects that we launch. Now we’ve got projects that are seven figure projects with incentives, all the way down to $100, and everything in between.
What’s really remarkable about where HeroX is now is the even coverage that we have with project types. We’ve really covered the full spectrum creatively. We’ve also really demonstrated the extreme breadth of crowdsourcing. We’ve got very technical projects like engineering problems and AI problems. But we also have social impact problems like international trade agreements and how they can be rethought using modern technology, as well as creative projects like producing great videos around a topic or creating graphics and logos.
When we started, we wanted to keep it open-ended. We didn’t want to get pigeonholed into a specific discipline or niche. What really surprised us was the indiscriminate nature of the inbound interest that we got and the projects that we got. It really demonstrates the universality of crowdsourcing, and that’s made us really confident that we can really focus on the entire knowledge sector. By that I mean the fourth area of the economy, besides agriculture, manufacturing, and services. The knowledge sector is thinking for a living, and it’s one of the most effective marketplaces in terms of the income that can be produced.
What challenges has HeroX faced as it continues to operate?
CC: HeroX has been really fascinating to run and to grow. The first challenge is that when we started HeroX and I did my research around the market and what had been tried before, I realized that crowdsourcing got really trendy in 2008-2009. There were over 700 funded startups that were targeting crowdsourcing. So I started looking at those, and realized that a lot of people have tried making crowdsourcing scale, with mixed success.
I realized that there was a missing model, a missing idea or framework that I needed to find and figure out in order to make crowdsourcing scale. Conceptually it seems so obvious that we’re going to use the Internet to collaborate and we’re going to do that at scale, but at the time there really wasn’t a great track record of tech companies. The first part of HeroX was looking for what’s the winning model for crowdsourcing. What caused all the other startups to fail or fall short, and how are we going to transcend that. The first three years of HeroX were really experimenting and exploring and discovering that unique difference that was missing.
The other challenge is that at the end of the day, businesses are remarkably similar. This is my fourth business, so I know that you have to understand the value you’re creating for customers. Businesses live or die by the value they create for customers, and everything else is irrelevant if that’s not there. Businesses also have to create a powerful culture, and build out a set of core values that really breathes life into the company beyond the founders and individuals that are starting it. We applied a lot of those traditional approaches, and I remember in our first meeting as a team, the first thing the three of us talked about was “what are our core values? What do we stand for?” Those have evolved over time into the five core values at HeroX. That culture is our secret weapon to be consistently successful in everything we take on.
In the Photo: HeroX co-founder and CEO Christian Cotichini speaking at the 2017 Real Talk Summit. Photo Credit: HeroX.
What was the winning model out of curiosity?
CC: If you look at what makes certain Internet companies become global platforms and really succeed, be it Google or Airbnb, they tend to enter into an already saturated market and bring a brand new idea that fundamentally changes the model. When Google started, they weren’t the first search engine. There were probably at least 50 search engines, with a lot of funding. So when Google went around to look for money, the VC community’s initial reaction was “what, a search engine startup? That’s been done.” Even Airbnb, when they went for funding, it was the same kind of reaction. But each of them found a unique differentiator. For example, for Google it was PageRank. They used the crowd’s behavior to rank search results, whereas everybody else at the time was trying to analyze the content and figure out from the content how to serve the best search results. We take that for granted now, but back then that was a breakthrough idea that nobody had implemented.
So for us, we looked at how crowdsourcing works and how all the other platforms have done it. What we found is what we call Crowd 2.0, or the future model for how crowdsourcing will work. The quick version of it is that HeroX is modeling itself as a social network for crowdsourcing, where organizations can create their own crowd around their issues, skill sets, expertise, etc., and then curate that crowd across multiple projects, very similar to the way a blogger grows their following by issuing blog posts and curating their audience that way. That interactive, personalized approach is very counterintuitive to the classic two-sided market model. That’s the idea behind our differentiation. I think in hindsight it’ll look obvious, but it took us three years to figure out how that model works.
What do you believe the future of HeroX holds?
CC: I’m a pragmatic idealist. My motivation for starting HeroX wasn’t to do another startup. That felt a little boring and shortsighted. I wanted to really help the world solve some of the big problems that it’s facing, and I think entrepreneurs are one of the best groups to tackle some of these problems. My vision for HeroX is to create the world’s problem-solving platform, and create a global market where organizations that want a problem solved can tap into the collective intelligent talent capabilities of the human race to solve that problem.
I was reading an article from The Economist, and they were talking about that Korean video “Gangnam Style” that went viral. They had a chart that showed all the minutes that had been consumed watching that video and how many man-years it added up to, and how that compared to big human efforts. It was like building seven Empire State Buildings or two Hoover Dams with all the time that was spent watching that one video. It just reminded me that the scale of the Internet is so big, and that the ability for us to collaborate at scale is there. We can take any big problem, and if we can use our technology to break it into smaller pieces, we can accomplish huge social change and breakthroughs.
So I really see HeroX as a platform where people will collaborate to solve problems. My goal is to create a platform where it doesn’t matter who you are or where you live, if you’re motivated and talented then you can find a way to solve these problems, build a career, and enter the middle class. And I really think that that’s going to help solve a lot of the problems that we’re seeing in the world, where a lot of opportunity is not well distributed, and where you grow up has a huge impact on your economic mobility. HeroX can really create a global market where anybody can find their talent. That’s why it’s called “Hero”X, it’s for people to find their hero’s journey, and be able to get the opportunities that will allow them to find their highest form of vocation and build a career around it.
