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INFORMATION SYSTEMS
IN
BUSINESS


ASSIGNMENT A



John Ragheb z3463494










1736 words

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Executive summary


This report is a culmination of the collaborative research for the large group of Australian business. This report
investigates Crowdsourcing initiatives and trends to allow recommendations of Crowdsourcing strategies for the
Australian clients. Due to the dynamic nature of Crowdsourcing, we have analysed Crowdsourcing platforms
focusing on Kickstarter in particular in order to gain a holistic understanding on the opportunities and threats these
pose to Australian businesses.



Report
Mechanical Turk
Computers although extremely powerful in their own regards with countless processors and scores of
space to store information are unevenly intelligent, leaving them unable to understand tasks that humans
easily complete (HITS). Since Mechanical Turk comprises primarily of small HITS (human intelligence
tasks) the target audience encapsulates the vast majority of the population and entirely depends on which
solvers are willing to do easy tasks for very little cash sometimes as little as 10c.

Since Crowdsourcing platforms like are not sufficient to be a primary source of income to support a family
as reflected in a 2010 survey analysing the demographics of Mechanical Turk with the average number of
people earning $1-$55 per week.

(Ipeirrotis, 2008)
Furthermore as evident by Mechanical Turk expansion into India, it becomes clear the target market of
the solvers is those individuals struggling financially or not working. This assumption is in line with the
gender breakdown in the US finding that 70% of the users were females with new borns (Ipeirrotis, 2008).

A value proposition is defined as an innovation, service, or feature intended to make a product attractive
to customers. For a seeker requiring mechanical Turk offers a cheap alternative source of labour to
complete HITS in return for a small fee. Similarly Mechanical Turk for solvers offers a secondary source
of income to complete easy tasks in return for a small payment.

Kickstarter
Kickstarter as opposed to Mechanical Turk however has a much more limited target market. Kickstarter
as opposed to many other Crowdfunding business models like Indiegogo limits its target market by only
allowing creative projects to start a pledge. Kickstarter primarily targets projects relating to Arts, media
and technology which have a clear beginning and end. By undergoing a screening process Kickstarter
does not accept projects for social causes like natural disasters or individual financial difficulties.
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Therefore it is evident that Kickstarter targets a niche consisting only of creative artists in their respective
fields. The successes of the selected target markets are illustrated in the following image: (Wolf, 2012)

Kickstarters value proposition primarily is to support seekers creativity through giving small groups of
creative artists in the worlds of Art, Comics, film, games etc the ability to funds needed to bring their
visionary ideas to life. The solvers who in this care are the backers (donators) are offered a way to
support new efforts/friends or groups they already know and would like to support.

Indiegogo
Indiegogo although is based around the same concept targets are very different market. As opposed to
Kickstarter Indiegogo accepts almost all projects including raising money for natural disasters and raising
money for individual causes. Although this does reduce its rate to successfully fund projects it does have
a much larger target audience ranging to everyone interested in started a pledge.
(wolf,2012)

Indiegogo has a very similar value proposition allowing seekers to bring their visions to life but without the
geographic limitations or the stringent rules about the type of projects accepted.















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Kickstarter business model canvas
Value Proposition
Kickstarters value proposition primarily is to support creativity through giving small groups of creative
artists in the worlds of Art, Comics, film, games etc the ability generate the necessary funds needed to
bring their visionary ideas to life. This is achieved by the backers donating to projects and Kickstarter
taking a small percentage of the pledges if successful (5%).

Key partners
Kickstarter has many key partners:
Amazon is a major key partner as it is the only current payment service which accommodates
Kickstarters all or nothing philosophy. If the project receives its initial intended funding goal
before the deadline all those who donated are instantly charged, if the project does not meet its
funding goal, all pledges are cancelled. As Amazon payments is the only service which can
accommodate this it is a key partner.
The creative projects creators who set up a donation goal are a key partner as it is the
cornerstone of the organisation.
The backers (donators) are also a fundamental key partner as without them the site would not
function and none of the projects would reach their donation goals yielding a flawed business
operation.

Key activities
Kickstarter as opposed to other business models doesnt involve itself in the process that occurs between
the project creators and the backers and therefore its key activities revolve around improving the Artists/
backer interaction.
By constantly improving Kickstarter.com by adding increased functionality a more successful
business model is created.
Kickstarter also continually works on advertising to increase its brand image
Kickstarter must also continually work with the payment process options to decrease fees and
allow for more people around the world to back and pledge. Currently Amazon pay only allows
people to start creative projects within a limited number of countries.

Key resources
Kickstarter requires a payment service in order to make the business model work, in this case it Is
Amazon pays. Therefore it is a key resource as without it, Kickstarter could not exist.
Kickstarter also requires suitable website designers who can continually improve the website
which is the corner stone of the business.

Customer relationships
Although there are no physical interactions between them employees and customers, Kickstarter
constantly improves this relationship through the constant listening of customer feedback and
therefore giving them what they want.

Distribution Channels
Kickstarter is limited in the number of distribution channels and is made up of:
Due to the nature of Kickstarters business model its primary distribution channel is its online
website which allows the interaction between the backers and pledges.
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Kickstarter also has a mobile app which allows for another point of accesses increasing its
servitization, allowing for accesses when the users arent home.


Customer Segments
Kickstarters customer segment comprises entirely of individuals creating creative projects with clear
goals in which something is produced at the end. From all the different creative worlds the largest
customer segment was film in which $32 million was pledged by the backers (Kickstarter, 2013).
Kickstarter As opposed to other Crowdsourcing platforms like Indiegogo does not accept social projects
like charity, personal finances or raising money for natural disasters. Therefore Kickstarter's customer
segment is very limited. The demographic break down of its customer segment consists primarily of
males aged between 25 and 34.
(Quantcast.com, 2014)
Cost Structure
The cost structure is made up of the key partners, key activities and key resources. Due to the nature of
Kickstarter the main costs are those of their website designers to continually improve their website.
Furthermore Kickstarter must pay a small rate usually between 3-5% to amazon pays for using their
services.

Revenue Streams
Kickstarter's major revenue stream is a 5% flat rate on all successful projects funded by the backers.
Furthermore Kickstarter earns revenue from the ads and sponsorships placed on the website.


By analysing the business model canvas of Kickstarter, it becomes clear that there are certain strengths
that add to the success of Kickstarter as a business these include:
Strengths in business model How it adds value to Kickstarter
Market segmentation Kickstarters choice to segment the market by only targeting a niche
comprising of groups dealing with creative projects adds value to its
success. By limiting the type of projects that pass the screening
Kickstarter has a much higher success rate as compared to its
competitors like Indiegogo 44.1% as compared to 34% (wolf, 2012).
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All or nothing motto Kickstarter's overall business model to instantly charge only when
the initial intending funding goal is reached adds value by increasing
overall success rate. This model encourages backers to pledge more
in by giving a sense of security that their rewards will be delivered
since the project raised all necessary capital.
Key activities Due to Kickstarter's key activities in constantly improving their
websites and working on strengthening its brand image it has gained
a larger following. Kickstarter has an overall traffic ranking of 280 in
the US as compared to Indiegogo 995 rank (Alexa, 2013).


Therefore it is evident that Kickstarter's business model has led to an extremely successful business with
over $1B pledged. This however wouldnt have been achieved without the use of information systems and
technology


By analysing all the information presented it becomes evident that there are many opportunities and
threats as a result of using Crowdsourcing platform that Australian businesses should be aware off.
Information
system/technology
How Kickstarter utilises it
Web 2.0 Web 2.0 adds dynamic features by changing static web pages into dynamic
user controlled websites. Kickstarter utilises Web.2.0 in the form of the
interactive website which allows for the Artists/backers interaction allowing
for small groups to fund their project. This is effectively the most
fundamental requirement for Kickstarter to function.
Mobile digital platforms The development of the Kickstarter app allows for increased points of
contact (servitization). This as a result allows for a larger audience to view
the different pledges in which the seekers can support by donating. This as
such increases the traffic that Kickstarter receives creating for a greater
success chance for the pledges.
Security protocol Kickstarter requires security protocols in order to encode all the personal
information about its users. Furthermore it must create for secure
transactions to occur between the pledges and the backers. Without the
use of security protocols the users would be at serious risk of getting crucial
information stolen resulting in backers hesitating to donate in risk of getting
hacked.
Social media Social media sites that have resulted from the evolution of Web 2.0
allowing sites like Facebook and Myspace to be used by businesses like
Kickstarter. Kickstarter by using social media sites like these creates new
opportunities for which seekers and solvers can collaborate increasing the
overall traffic and improving its brand image.
CRMS Kickstarter utilises information systems in the form of a type of CRM in
order to pursue customer satisfaction. Kickstarter must be able to tract
customer interactions and capture information from their websites, social
media etc. Furthermore it gives access to information on their sales and
revenue. This therefore allows improvement for Kickstarter as it allows
analysis on the factors that drive customer satisfaction
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Opportunities Threats

Australian businesses should be aware of
the opportunities Crowdsourcing platforms
like Mechanical Turk offer. By using such
Crowdsourcing platforms to perform HITS
businesses can be much more efficient by
developing an improved cost structure.
The large Australian companies should
also be aware of the opportunities
Crowdfunding sites like Kickstarter can
offer. Although they are a big company
Kickstarter can still be used to fund highly
ambitious projects that have a following of
people supporting them.
Crowdfunding platforms like Kickstarter
allows for a much easier way for new
market entrants to enter the marketplace
by funding their ambitions and bring them
to fruition. Australian business should
therefore be aware of this threat of possible
competition entering the marketplace in
this way.


















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Referencing
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