Friday, May 16, 2008

Knewsroom: Turning on a Dime

I noticed the other day that Kluster, a crowdsourcing-based start-up, changed its business model. The new service from Kluster, called Knewsroom, is an crowdsourced - you guessed it- news service. Members submit topics and the crowd "invests" in what topic or story they feel is most newsworthy. If a story you invest in is featured in the next day's edition, you will earn Knewsroom currency based on the size of your original investment. If you create original content and the crowd deems it worthy, you can get paid $150 on a Mastercard debit card. The problem I see, very early on, is that the crowd seems to be investing heavily in the stories with the most votes. For instance, a story on ABC had 19 votes and a story on XYZ had 2 votes yesterday late in the voting day. With such a commanding lead by ABC, why even bother voting for XYZ?

I found a video on that features Kluster founder, Ben Kaufmann. He seems pretty open about the fact that Kluster burned through $1m in 7 weeks, requiring them to change the business model.

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