Last month, I got the chance to meet Lyle Fong, the Co-Founder of Lithium Technologies. The Company started as a platform to spin up social networks for gamers. It later iterated into hosting social networks for companies and their brands. The journey was long and winding for Lyle, but after $200mm+ of venture capital, Lithium finally found a scale-able business – hosting social networks for customers to crowd-source solutions to common problems with products. It is now one of a handful of companies offering “Crowd Sourced Customer Services”.
The Lithium model is particualrly interesting because they have found a way to extract meaningful value while providing a venue for crowdsourced intelligence that provides a consumer experience far in excess of what is available. This is how it works – Lithium will sell the vision of a crowd-sourced customer service and Q&A portal to a company – most who say yes are in the telecommunications (think cable, wifi and phone) or consumer technology fields. Once a company buys into the vision, Lithium will setup a curated social network where the company is instructed to send their customers. As the customers of the company join – they begin to solve one another’s questions about the product. What makes this different then the “help I have tech issues” chat rooms of the past is that Lithium will ensure the quality is high and allow the company’s representatives to have dashboards to get involved for particularly painful customer problems or to help ensure the veracity of solutions. Lithium will also ensure that the customer service network ends up being very visible via search results and direct links from the manufacturer/provider.
Customers get quicker answers to their problems – from a community of other customers who speak their language, understand their issues and can usually better explain how they solved these issues themselves. The company’s get relief from having to invest in customer support resources, improved NPS scores due to the formation of a community around their product and get valuable information on who the most passionate customers are. Lithium collects a SaaS fee from the company to host and curate the networks. Over time these social networks become the hub for a company’s digital presence.
The biggest challenge with a model like this is that unlike a Waze-type of crowd-sourced solutions, the provider of the data (“contributor” in the community) does not always benefit. Said another way, a really good solver of problems or an active community member does not accrue tangible benefit besides the opportunity to engage on a product or service they love and occasionally get recognition by the company. This creates a problem whereby it is hard to attract and retain quality contributors – unless fanatically supportive of the product. To help combat the issue, Lithium uses gamification (given its roots) to create a badge system for contributors. As a person collects more accolades and achieves a higher badge level he becomes eligible for certain prizes, recognition and rewards sponsored by the company.
Despite that challenge, Lithium has grown to run these networks for hundreds of companies and in so doing built a meaningful business while leveraging a unique use case of the crowd intelligence.