Article

03.04.2018

Brussels is renewing its support for circular businesses

Encouraged by the success of previous rounds, the Brussels Region is launching a new call for projects dedicated to the circular economy, in order to continue to encourage companies in the capital region to transition.

The circular economy in Brussels

As you may have read in the media, Brussels is issuing a new round of calls for "be circular - be Brussels" projects. Launched in 2016, this initiative is part of the Region's wider Regional Programme for a Circular Economy (PREC), set up to create a “framework that will encourage a transition of the Brussels economy to a circular economy”. In its first two years, the call for projects in Brussels led to the funding of nearly 70 businesses of all sizes and in all sectors, for a total of over EUR 3 million, collecting in passing the Eurocities Innovation Award, a prize awarded by the network of European cities. In 2018, the call for tenders - sponsored by the administration for the Brussels Economy, Brussels Environment and the agency for businesses Hub.brussels - is back again with some new features, especially with more funds for projects on a grander scale with a larger impact.

From linear to circular

More and more, people are talking about circular economy. And for good reason: the concept is considerably more wide-ranging than "simply" recycling waste. One of the commonly agreed definitions is that of the French Agency for the Environment and Management of Energy (ADEME): " The circular economy is an economic system of trade and production, which at all stages in the product life cycle (both goods and services), seeks to increase the efficiency of use of resources and to reduce the impact on the environment, while enabling the welfare of individuals ".

The circular economy is anchored to a number of key principles, such as ecodesign, economy of functionality, the 3R theory (reduce, reuse, recycle), the recycling of waste, industrial ecology, the sharing economy, sustainable supply of resources, short delivery routes, etc. This systematic view contrasts sharply with the linear approach of an economy that consists of extracting, producing, consuming and throwing away, in order to shift towards sustainable support for the value of products and materials. A change of paradigm that requires changes to the practices of all economic actors, but which also represents new opportunities (Agoria, for instance, estimates that by 2020, the circular economy could lead to the creation of 36,000 additional jobs).

EUR 200,000 for high-impact projects

One aspect of the circular economy is the reduction in waste output, by using different approaches: repair, maintenance, reuse, recycling, etc. In this area, one of the sectors most affected is that of construction, because it is estimated that more than 15 million tonnes of waste are created each year in Belgium. So it is no coincidence that the call for projects "be circular - be Brussels" includes an amount reserved for so-called "circular" building sites, available to companies in that sector.

Another new facet of the 2018 round in the call for projects in Brussels is the addition of a category "Impact+", intended to provide financial support to companies running large-scale projects that are likely to have an important effect on the capital's ecosystem, as well as on employment. Previous years have provided innovative and inspiring examples in several different sectors: from renting clothes or toys, to refurbishing computer equipment, not forgetting the manufacture of ecodesigned bicycles, the re-use of glass from car windows, the conversion of unsold foodstuffs into soups, the remodelling of LEDs, and finally the collection and re-use of construction waste...

Maybe it will be your turn in 2018 ? You have until 15 May to submit your application at the website: circulareconomy.brussels

An information day is also planned on 19 April at Hub.brussels

Article

18.04.2016

Crowdsourcing: the basics

Are you undecided about the various ways of increasing your offering? Has R&D encountered a technical problem? Perhaps your clients know more.

The concept of crowdsourcing is simple: you call for the contribution of your customers and/or the general public. An approach which is gaining popularity worldwide even though it is not actually new. As far back as 1714 crowdsourcing by the British government led to the invention of the chronometer and therefore a reliable method of calculating longitudinal position at sea. 

Three hundred years later the basic principles remain the same: in crowdsourcing you work with a network of individuals and communities within and largely outside the company. They make a contribution in the form of ideas, time, expertise or financial support. This enables new solutions to be accessed and makes realisation of joint projects and optimisation of tasks possible while keeping down costs.

This system is based on exchange, transparency and communication. It also works for all sectors and at all management levels. You should be able to engage a community of designers for your product development for example and choose the best proposal together with the public. Then you will bring it onto the market, possibly even financed via crowdfunding.

The crowd is ready for this

This is certainly no science fiction, as proven by the growing success of the system. It is also the ideal time to get involved with crowdsourcing:

  • communicating with the crowd is easier than ever before thanks to technological development, the social media boom and the development of online communities;
     
  • the crowd is straining at the leash: a joint survey by several European universities showed that 54% of Europeans would like to support projects by companies and private individuals creatively and/or financially;
     
  • co-creation, or developing a project together, is hot. The crowd can join in with a project for a whole host of reasons: the necessity for a creative outlet, commercial motives, dedication to society or just for a sense of honour or fun;
     
  • the economy urgently needs sources of financing and innovative projects in order to achieve new growth and to increase competitiveness.

You too?

It will definitely take some getting used to as such a system radically changes the way in which a company gathers information, carries out research, produces and even finances projects. At the same time relationships with clients or users change as they evolve into potential colleagues, financiers and ambassadors.

But this does not have to be a threat. On the contrary, crowdsourcing provides you with a unique opportunity to relinquish your traditional methods. You can now look externally for ideas, get feedback from the crowd on ideas developed internally or even combine both approaches. The possibilities are endless.

Article

18.04.2016

The dos & don’ts of crowdsourcing

A good crowdsourcing project creates a win-win situation where the initiator and the crowd feel that they are achieving something together. How do you approach that?

In crowdsourcing the 'crowd' component is at least as important as the 'sourcing' component. In order to be successful you must build up this community and win it over. This is where the challenge lies: the crowd is not an anonymous, homogeneous mass but a collection of individuals and sub-groups. You need to seek out and mobilise each one separately. 5 tips for a powerful crowd dynamic:

Take care of the presentation of your project

Your project must appeal. Present it with photos, short films or a clear presentation – vague sketches or a half-baked concept are inadequate. Keep your explanation as simple as possible. After all not every potential funder is a specialist or an engineer.

Also, don't forget to keep your target amount as realistic as possible. Above all do not create the impression that the campaign is an excuse for personal enrichment or that you will channel the money off into other, existing projects. If you work with rewards, ensure that they are original and attractive, divided up into transparent and attainable blocks of financing.  

Build your crowd

Look for the suitable crowd and get these people right behind your project. Approach them via all possible channels and assign them various roles: creative or technical input, critical analysis, ambassadorial, ... When doing so keep the threshold as low as possible, within your company as well. It is recommended that you bring as many of your people as possible into contact with the crowd in order to ensure healthy cross-pollination. 

Live your project

A project without animation has little chance of success. So be motivated and keep motivating others. Respond to queries, take comments into consideration and intervene where necessary. Remember that participants cannot be squeezed to produce viable ideas. They too must go through a creative process in which they can gradually shape their input. So ensure that they continue to be involved. For this purpose it is necessary to approach each sub-group differently: encourage, win over (again), congratulate, permanently challenge, ... 

Keep your campaign exciting

Keep communicating, even if some of the messages may be negative. The greater the involvement you demonstrate, the greater the loyalty of the funders and the greater their willingness to accept delays or problems.

A good dosage is important here. Ensure that news is provided at regular intervals to keep the crowd involved so the attention on your campaign does not fade away. 

Your project, your rules

The principle: you decide where you want to go with your campaign while being open to suggestions from the crowd. So you lead the crowd to the desired end product rather than the other way round. Otherwise the outcome may be rather different to what you had hoped. A few examples of how not to do it are the recent – and hastily cancelled – campaigns which resulted in the product name iSnack 2.0’, a chocolate bar filled with mince, or a washing-up liquid with a scent of roast chicken...

Article

18.04.2016

Crowdfunding: financing with extras

Are you looking to finance a new project which has some risk attached to it? Present your plans to the crowd and discover how quickly small acorns can become mighty oaks.

Crowdfunding or participative financing involves looking for a (large) number of potential moneylenders. These may be professional investors or co-entrepreneurs or equally your clients or the general public. They will finance your project or company on a quid pro quo basis.

This specific form of crowdsourcing is centuries old. Just think about the construction of the Sagrada Família (Gaudi cathedral) in Barcelona or the plinth for the Statue of Liberty in New York. The way in which it happens is rather different today: via online payment or online platforms, often with lots of publicity on social media. The emergence of social media is undoubtedly one of the reasons for the increasing popularity of crowdfunding, together with the search for alternative sources of financing as a result of the crisis.

Much more than just a source of financing

While crowdfunding focused on cultural or humanitarian initiatives for a long time, its emphasis has recently shifted to commercial projects and even the financing of start-ups and small and medium sized companies. The advantages are clear:

  • companies can meet the cost of – mainly innovative – projects which are less suitable for (complete) financing via a bank loan, business angels or a private equity partner. This may be because they have considerable risk attached or demonstrate too little concrete potential for growth, the required amount is too low or the company does not want to have an external party join in with the company capital.
  • Financing is just one part of the story; creating sufficient 'buzz' and a community around your project will make you much more visible. Simultaneously, you carry out market research. Is there a call for your product or service? Is the design suitable? And are you bringing it onto the market in the right way? Thanks to this interaction you can also make adjustments to the product during the design phase, thereby reducing the risk of an unsuccessful launch.
  • By taking the input of the crowd into consideration you will create a much closer bond with your target market, with clients developing into co-designers, fans and ambassadors.
Article

01.07.2016

Challenges and risks associated with crowdfunding

Although crowdfunding provides almost inexhaustible possibilities, it also involves a number of challenges and risks. An overview.

1. For the company

You open the company up to the public. This is of huge benefit in terms of marketing and strategy but it also means that everyone has access to the complete financial situation. You must therefore be prepared to be completely open and sometimes share sensitive information.

This new business model turns all traditional models on their heads. The greatest challenge is learning to deal with this and finding a good balance in the area of

  • control: how do you divide authority between the company and the crowd? There is no golden rule but research conducted by the University of Toronto suggests that the ideal system has 80% of the project firmly in place with the crowd having a say in the remaining 20% (e.g. choice of colours, technologies, points of sale etc.);
  • transparency: to what extent do you wish to share your knowledge, technology and research and development results with others – including potential competitors? How will you protect your copyright and intellectual property in such a case?

A significant risk is of course the fact that you may not achieve the desired funding and the campaign fizzles out. However, this is an advantage in a sense. The campaign helps you assess whether there is a demand for your intended product or service on the market. If this does not appear to be the case, you will at least find out in time and be able to avoid the much higher loss of a failed product launch, both financially and in terms of reputation. You can use the feedback received to instigate changes and make a new attempt later on.

If you add up all the fees and the marketing, time and energy involved in a crowdfunding campaign, the cost of this form of financing can be extremely high. With reward-based funding there are definitely a few flies in the ointment. You must declare the funds collected as taxable income. In addition, a pledge is regarded as a sales transaction which is therefore subject to VAT for companies. Take these factors into account when setting your prices. Otherwise the tax office may bring you an unpleasant surprise...

2. For the investor

For a moneylender the challenge primarily involves finding good projects. There is no shortage of attractive initiatives. Quite the opposite in fact. With reward-based campaigns it can sometimes even be difficult to resist the temptation. But what will your investment yield?

Putting money into a project always remains a bit of a gamble, even if you have analysed it thoroughly and you believe in it. Success is never certain and unforeseen problems may occur at any time. With lending or equity-based formulas your complete investment could then be lost.

The chance of this happening is smaller for the reward-based model, as is the amount invested. There is always the possibility, however, that the initiator will not meet his commitments, will only partially meet them or severely delay meeting them. In very rare cases fraud may be involved with the collectors (and your contribution) disappearing into thin air.

A clear picture

Do you want an objective opinion before joining a Belgian crowdfunding project?

If the project has a prospectus obligation, you can look at it with the FSMA approved prospectus. Among other things this contains further information about the initiator and the legal form of your investment (share, loan etc.). An approval or licence from the FSMA or the National Bank of Belgium does not however mean that these bodies automatically deem the project suitable for investment – it is up to you to weigh up the risks.

You can also use the FSMA website to check whether the internet platform and/or the initiator are under special supervision by the FSMA or the National Bank of Belgium.

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