At the heart of Elements is a community. So describes one of the newer and more interesting examples of crowdsourcing, started by Linda Welch, the owner of a pet day care company and the former campaign treasurer for Ralph Nader’s 2000 presidential bid. And the idea is fairly simple – a restaurant formed by a “beta community” of over 400 online members that will be opened in 2009 in Washington, D.C. serving raw and organic foods.
Crowdsourcing has been popping up more and more lately (See previous 3P post on crowdsourced apparel here), and has really espoused the 2.0, open-source ethic to redefine entrepreneurialism these days. Amongst others, it addresses one of the biggest issues faced by any new venture – capital.
According to the Washington Post, the community estimates that it will ultimately cost $1-1.5 million to get the restaurant off the ground, yet to date, Welch has invested less than $100,000. For many models, the majority of the funding comes in the form of investing members, who in the case of Elements, not only have a voice in the development of the restaurant, but also become a part of an egalitarian profit-sharing model, one based on a point system through participation and member referrals. However, for many involved, it isn’t all about the money.
“It’s the community. What’s rewarding is coming together to create a place in the city that’s beneficial to the community and yourself and your friends,” said June Blanks to the Post. She is a 27-year old D.C. resident and Elements member, who is also the group’s architectural liaison.
And that’s where Elements’ crowdsourcing model has also been effective. It leverages its member base’s expertise. Through the group’s architectural component, the restaurant will be retrofitted according to LEED-certification principles. Elements doesn’t plan to stop there either. The restaurant will have a composting system, an extensive recycling policy, use green energy, and the carbon output of its operations will be offset.
Another perk of Elements’ crowdsourcing model is that it essentially has a 400-person large focus group, giving feedback throughout every step of the development process of the restaurant. Welch says: “Most businesses are started because you have a great idea, and you take it out to the public to see if they like it. This is the opposite. We’re finding out what people want and doing it.”
However, despite what it may or may not offer, there are those who are reluctant to recognize the possible advantages of crowdsourcing. According to joelogon.com, relying on community feedback to create a restaurant is a risky proposition. Logon points out the inequality of member participation for one. Of the 20 members that participate the most, understood in terms of number of points, the top 3 members are 3-4 times higher than the following few, which means they not only participate more, they will get bigger pieces of the pie on the back end. What that means, according to the blog, is that Elements may not be receiving a representative set of feedback from its member base, which would be contrary to its intent. Unless the small percentage that actively participates “is going to eat at the restaurant all-day, every-day,” says Logon, “the proprietors need to make sure they’re not just catering to the whim of a select group of people, especially if they need to make a broader audience play.”
Even those involved with the project recognize how risky the project is. With high failure rates, the restaurant business is notoriously hard. Regardless, most seem optimistic. Especially if the community remains transparent, according to Neil Takamoto, who runs Elements’ e-community. “We make it clear that it is not a democracy. Linda makes the final business decisions,” Takemoto says. “But we know that the more [the members] feel listened to, the more successful the restaurant will be.”
What do you think of the crowdsourcing model? Does it seem like a gimic – a late 90’s dot-com boom type of a thing? Or – in terms of funding, leveraging assets, and having more targeted offerings – is it redefining the way businesses are run and relate to the communities around them?