As both crowdsourcing and crowdfunding gather momentum in the architecture world, they also gather criticism. The crowdsourcing design website Arcbazar, for example, has recently attracted critics who label it as “the worst thing to happen to architecture since the internet started.” A few months ago, I myself strongly criticized the 17John apartment-hotel in New York for stretching the definition of "crowdfunding" to the point where it lost validity, essentially becoming a meaningless buzzword.
In response to this criticism, I spoke to Rodrigo Nino, the founder of Prodigy Network, the company behind 17 John, who offered to counter my argument. Read on after the break for his take on the benefits of tapping into the 'wisdom of crowds.'
I've been critical of your project 17John, so to begin with I wanted to offer you the opportunity to put in your own words what you're trying to achieve with 17John.
17John is available to any investor outside of the United States, and to any investor in the United States with $50,000 and up to invest. That is a game changer because a project like that would only have been available to somebody with $175 million to invest before. And that's precisely the premise behind crowdfunding, enabling smaller investors to have access to projects that weren't available to them before.
You've had a lot of success, and ArchDaily has also given you a lot of praise, over the projects you've done in Colombia, for example the BD Bacatá tower and the Bogotá Art District. How do you think that this model which you've used in Colombia has translated to the USA?
I think that the model in Colombia sets the right example for the model in the United States to follow in order to democratize investments as much as possible. When the restrictions of Title III in the JOBS Act in the US fall, projects like 17John will not only be available to accredited investors but to everybody else. That's probably the single most relevant component of the Colombian model that will positively affect the real estate industry in the United States.
A separate issue deals with crowdsourcing, which is effectively bringing the collective intelligence of the crowd to the interior design, or in separate components of the design of the project that we do. In our airport business hub, we crowdsourced different components of the interior design of the project. That's a model that we're replicating for 17John. That's two ways our Colombian model can improve the way real estate is understood in the United States.
When you talk about Title III of the JOBS Act, this is the legislation that opens it up to people beyond the accredited investors?
Title III says that a restriction that was imposed in 1933 [with the Securities Act] which meant you could only solicit accredited investors in the United States is no longer in effect. It also says to solicit smaller investors in the United States is legal now, it can be done. However, it has a restriction: you cannot invite investors under Title III to projects that are more than $1 million - and that's still a problem in our heads, because why wouldn't you let somebody small participate in a huge project such as 17John. In my mind, a project like 17John is a lot safer from an investment standpoint than a $1 million project.
Do you think there's a reason that the USA is persisting with these rules even though they're based on rules that came into place in 1933?
The reason in 1933 was to prevent smaller investors from being scammed, or to be victims of fraud. But it was a time when there wasn't even TV, TV was invented in 1934. So scamming and fraud was very difficult to target and to fight. The problem with that though was that it excluded smaller investors from participating in larger opportunities, which are normally more stable. So the paradox and the contradiction was that Title II states "OK, because you're small and you don't know about investments, I'm going to protect you from fraud by excluding you from deals that I'm keeping to myself.” Now, it requires the government that we have right now to open it up and say, "listen, this is not making any sense, why are we excluding everybody from participating?".
Though much of the building has already been designed, you've chosen to crowdsource the design of some of 17John's key spaces. What do you get out of crowdsourcing that you couldn't get from a traditional architect-client relationship?
We are still working with architects on the project, but now they have taken on a role as judges of the crowdsourcing competition and therefore curators of the project. One of the competitions is the design of the suites, another is the technological component, meaning an app in order to create a community, and another is a common space. The architects involved are delighted to participate in a bottom up approach, and have no problem going from the role of expert to the role of curator, interpreting the wisdom of the crowd.
You use the word 'curators', rather than designers, which is an interesting way of seeing it. What is it about these large projects - and social projects, as you're trying to achieve - that need a curator rather than simply a designer?
By definition, as a designer you are limited to your own knowledge and your own capacity. You are limited by geography and by many other components. But if you do a crowdsourcing competition, there may be amazing creative people from all over the world that can provide you with ideas that a curator or a group of curators can interpret and effectively implement in the design of the project.
If you have the opportunity to participate in a project and have access to a huge crowd, the chances are that the result is going to end up being better. For example there is a crowdsourcing competition developed by the NASA Tournament Lab in cooperation with the Harvard Business School. Thanks to crowdsourcing these people are effectively coming up with solutions that are more efficient than the experts from before. That can be applied not only to aerospace stations but also to real estate and to many other components. You might have a project, and have an idea of what the architecture should look like, but if you want to enhance it with the wisdom of the crowds from an interior design standpoint – now you can thanks to technology and social media.
Are you saying technology and social media is driving this change in the way we design things?
Yes. For example in Colombia, we had access to a very interesting designer from Bali that participated through his proposals in the crowdsourcing competition in the design of Aeropuerto Business Hub in Bogotá, and that is somebody that without social media and without the crowdsourcing competition we would have never been able to meet.
Can you think of a way that both crowdfunding and crowdsourcing buildings would actually change the design of those buildings?
An example of the projects that can be done with crowdfunding that weren't possible before is the BD Bacatá skyscraper. Sometimes the traditional equity players are not necessarily lined up with the solutions of the population such as a skyscraper - it is much more lucrative and easier for a developer to do ten buildings, each six storys high, as opposed to building a much needed skyscraper in downtown Bogotá. But the problem is that the six story buildings are creating a huge problem in the city. So with crowdfunding these projects are not only possible now, they present an important investment opportunity to participants in the crowd.
The long-stay apartment-hotel is something that is gaining popularity with traditional developers. In the particular example of 17John, how do you think that building would have been designed differently if it had not been crowdfunded and crowdsourced?
It would have been respondent to the opinion, or the design vocabulary, of only one person or only one entity. Now, the crowdsourcing competition will give the opportunity for many people to contribute ideas that you wouldn't have access to before. In my mind, crowdsourcing is like pieces solving a puzzle. The architect, talented architects, have always had to respond to what the developers, the guys with the money, want to do. With the crowd, architects have a huge opportunity now to really take on projects that they believe can be implemented, bypassing the developers. As an example, in Argentina there's already people working along those lines [in fideicomiso projects].
You touched on something there that the combination of crowdfunding and crowdsourcing designs really allows people to bypass the 'higher-ups.' They combine to make the bottom up approach even more powerful - is that something you think is true?
Absolutely.
