A challenge is a generic term used for a business related issue that a company wishes to resolve. We refer to them in the context of innovation related issues spanning the entire innovation cycle from ideation—invention—to commercialization and business outcome delivery.
A project is an issue that has a known solution to it and a company knows how to solve it. All that is needed are resources and project management capabilities. However, a challenge is an issue that company may not know how to solve. In other words, a project is the result of a resource gap in a company whereas a challenge is typically the result of capability and resource gaps combined. Therefore, even if a company could acquire the resources needed chances are they will not be able to solve the challenge satisfactorily and deliver on the expected business outcomes.
Currently, Cenergim offers two different types of challenges: standard and managed.
In a nutshell, a standard challenge is a single challenge solved by an innovator in the Cenergim expert ecosystem without requiring concierge services whereas a managed challenge is a complex challenge that may represent a portfolio of challenges that require multiple parties to co-create together to solve it. Managed challenges also require a dedicated project manager offered through our concierge services to ensure success.
Posting challenges
The process is fairly straight forward and intuitive. All that you need to do is choose a category that best represents the type of the challenge that you have, offer a cash reward for solving it, and explain in plain English why do you have this challenge and what you wish to accomplish by solving it.
Unlike other platforms—Crowdsourcing and Open Innovation—that require open posting and bidding, Cenergim uses a discreet posting and by invitation only method. Therefore, no one can see your challenges. The only people who have access to the information are the Cenergim staff and the screened and invited Innovators who are selected to solve it.
Once you discreetly post a challenge only our Managed Services Team members can see it. Your challenge will be assigned to an expert who is familiar with the type of challenge that you have. This representative is responsible for identifying up to 5 innovators who can solve the challenge from our ecosystem and confidentially invite them to review and express interest in solving your challenge. Once the best candidate is identified, the service manager will inform you to review their profile and decide whether you agree with our selection. Upon the agreement by both parties, you will be prompted to execute a challenge specific agreement. Once that has happened, your information is shared with the other party and you will be invited to the Cenergim virtual Workspace to start collaboration and solving the challenge.
Escrow is a service that is provided by a regulated third party payment processing system. We use it to ensure fair play and create trust between the challenger and the innovator. Once a challenge is awarded, the challenger must deposit the entire reward amount to our escrow partner before the innovator begins work. Innovators and Cenergim are paid in a lump sum or in installments depending on whether a challenge has milestones to achieve or not. Cenergim uses this model as a part of its vetting process to ensure that only fully committed and qualified parties use the service. Challengers are ensured by offering them an outcome-based model where they only pay for services rendered and innovators are guaranteed payment for challenges solved.
Outcome-based is a business model based on the ‘pay-per-use’ philosophy where buyers and sellers—Challengers and Innovators—agree on specific outcomes to be delivered. This is in contrast to the traditional output-based models like hourly or project-based that produce outputs but may not deliver the desired outcomes.
DIFM refers to ‘do-it-for-me’ model where the seller provides full-service to the buyer. This model is typically used by full-service solution providers who target the capability gaps of the client.
It is important because it is the best model to solve a challenge that is rooted in the capability gap of the challenger. The traditional ‘do-it-yourself’ (DIY) models rely on the buyers’ capabilities to know how to solve a challenge. As a result, they are best suited for challenges that arise from the resource gaps where a challenger knows the solution but needs the appropriate resources to solve and complete the project.
Challenge Workspace is a virtual private workspace created by Cenergim for each challenge where Challengers and Innovators can openly innovate, co-create, and co-innovate to solve challenges. Access to workspace is strictly controlled and only the Challenger, the selected Innovator(s), and the Cenergim Managed Services Team members can access it.
Concierge Service is a management service that Cenergim offers to Challengers to help them achieve the outcomes that they desire. These services are provided by a dedicated Success Manager who acts as a consultant and project manager to ensure that all challenge milestones are successfully completed and meet the contractual agreements. The Customer Success Manager will review the work delivered by the Innovators and if needed will work with them to ensure the requirements are properly met prior to the approval process.
Successful completion of certain challenges may require the Challenger to define multiple tasks or activities called “Milestones”. While setting milestones is optional their definition requires expertise and knowledge of the methodology to solve the challenge. Thus, a meaningful milestone is a milestone that is properly defined in such a manner that an Innovator can both clearly understand it and accomplish it.
We recommend that the Challengers only set milestones if they are fully capable of defining meaningful milestones. Therefore, for Challengers who are not confident of their domain expertise Cenergim recommends that the Challenger either sign up for Success Plans [Solutions ? Success Plans] to ensure that these milestones are properly defined, or refrain from defining milestones that may prevent Innovators to accept the Challenge.
There are two primary benefits to setting milestones. First, they reduce the perceived risks for Challengers as the Innovators are paid in installments rather than in a lump sum. And second, they may expedite the completion of other related projects that rely on the completion of the milestones as pre-requisites. Hence, more activities can be achieved in parallel.
The downside to setting improper milestones are numerous. Foremost, they may force the innovators to deliver outputs that are not aligned with the outcome desired. Second, if improperly set, they increase the risk of challenge not being accepted by Innovators as they may not perceive the milestones as realistic or achievable. Third, Cenergim may decline the challenge as an unqualified challenge. Finally, they may cause unnecessary delays if timing is a critical success factor.
Yes. We require the Challengers to warrant that they (a) accept the risk of challenge not being accepted due to ambiguous or unreasonable millstones set; (b) accept the outcome generated based on the milestones defined; (c) refrain from holding Cenergim or the Innovator responsible for the results produced by potentially improperly defined milestones; (d) agree to release the escrow funds related to the milestone; (e) let the Innovator complete the challenge based on the milestones defined; or (f) pay an additional 2% modification fee plus any appropriate fees for challenge services to correct the remaining milestones to ensure successful completion of the challenge.
Yes. We require the Challengers to warrant that they (a) accept the risk of challenge not being accepted due to ambiguous or unreasonable millstones set; (b) accept the outcome generated based on the milestones defined; (c) refrain from holding Cenergim or the Innovator responsible for the results produced by potentially improperly defined milestones; (d) agree to release the escrow funds related to the milestone; (e) let the Innovator complete the challenge based on the milestones defined; or (f) pay an additional 2% modification fee plus any appropriate fees for challenge services to correct the remaining milestones to ensure successful completion of the challenge.
Challenge Agreement
A challenge agreement is a secondary agreement that complements the Terms of Service. Whereas the Terms of Service outlines the general user agreements of our service, the Challenge Agreement outlines the specific terms for completion of the challenge. It contains the following:
1) challenge specific information;
2) general provisions;
3) each party’s obligations;
4) escrow instructions and payment terms;
5) penalties;
6) intellectual property (IP) rights and transfer agreements;
7) confidentiality agreement.
Reward Fee
A reward is a fee that a challenger is willing to pay to an innovator to solve the challenge. We call it a reward because it represents the ‘name-you-price’ model based on a challenger budget versus the traditional bidding process used by the majority of other platforms where freelancers and solution providers compete and bid for the project.
It is a term that Cenergim uses to ensure that Challengers post a challenge based on fair market value of the service or solution provided by the Innovator. This is important because unlike most platforms that compete on price we compete based on quality. In other words, our primary goal is to help Challengers solve complex challenges by facilitating collaboration with Innovators to enable co-creation and co-innovation at the highest level possible. As a result, Cenergim services and solutions are designed to compete on quality against high-end Open Innovation and Co-creation platforms and not the low-end Crowdsourcing platforms competing on price.
Therefore, Challengers should make every reasonable effort to offer competitive rewards that incentivize Innovators to accept and complete challenges at a level that is consistent with Cenergim’s quality standards. Offering low rewards that are significantly below competitive market rates may result in Challenges not being accepted by Innovators or challenges being disqualified by Cenergim as their resolution may require Innovators to provide services that do not adhere with Cenergim’s quality of service standards.
There are numerous advantages. First, Cenergim is exclusively designed to help technology innovators solve their complex innovation challenges using a co-innovation model with other innovators. Second, we offer an expert ecosystem of trusted and vetted freelancers and solution provider firms that span the entire innovation cycle. Three, Cenergim offers significant domain expertise as the founders have considerable experience in solving innovation challenges. Fourth, we have access to a large hidden community of trusted experts that most other platforms do not have. Fifth, we offer outcome-based solutions using an orchestrated and managed do-it-for-me (DIFM) model to create a frictionless experience. Sixth, we offer a service that no other platform offers today and that is helping our clients build a smart innovation ecosystem that is fully managed by professionals with track record in managing complex projects and relationships.
Managed Services Team
These are Cenergim staff that work behind the scene and support Challengers and Innovators. Their goal is to ensure successful completion of the challenges. They provide both complementary and fee-based services. The complementary services include interviewing and vetting Innovators, reviewing and approving challenges, selecting and inviting Innovators, and managing relationships. The fee based services include providing concierge services and delivering success plan services.
Selecting an innovator
For standard challenges we use a double-vetting and for managed challenges we use a triple-vetting process. All our innovators are selected by a referral or invitation and go through a vetting process to ensure that they meet our stringent selection criteria before joining our ecosystem. For standard challenges, our Managed Services Team will go through a secondary vetting process to identify the best candidates who have demonstrated the ability to solve a similar challenge. For managed challenges, we assign a dedicated success manager who will further qualify the candidates to ensure that they can co-create and co-innovate with other parties to solve the challenge.
There are three ways to join: invitation, nomination, and application. Our team has a long track record of being involved with innovation. As a result, we have a large network of trusted star providers and experts with whom we have worked in the past. This group receives an invitation from us to join our ecosystem. We also have a sizable extended network of professionals and experts that can nominate potential members. The nominees have to go through an extensive qualification process to join. Finally, we also receive applications from potential members who sign up on our site and build a profile. These candidates have to go through a certification process to prove their eligibility.
There are two unique aspects to our process: nomination, and peer-to-peer evaluation. First, we put a very heavy emphasis on referrals and nominations from other experts and customers who can vouch for a candidate.
Second, we use experts with many years of domain expertise to interview and certify the nominees. These experts have many years of hands on experience either solving innovation challenges themselves or hiring and managing providers and teams to do it. By tapping into the wisdom of these experts we significantly improve our selection process. This is in stark contrast to some other platforms that use methods like: self-certification, third party reviews, key word search, and last but not list using inexperience people or recruiters to conduct interviews.
Second, we use experts with many years of domain expertise to interview and certify the nominees. These experts have many years of hands on experience either solving innovation challenges themselves or hiring and managing providers and teams to do it. By tapping into the wisdom of these experts we significantly improve our selection process. This is in stark contrast to some other platforms that use methods like: self-certification, third party reviews, key word search, and last but not list using inexperience people or recruiters to conduct interviews.
There are numerous reasons for this. Foremost, is that we use a ‘club-of-experts’ methodology based on a co-creation model. In other words, our ecosystem consists of a ‘VIP community’ that requires expertise to join versus traditional models that are built around ‘open network’ concept. This means that we are only interested in top providers within each category. So, technically we are looking for ‘a needle in a hay stack’.
Second, innovation is a complex multi-disciplinary process that requires significant knowledge and expertise. Hence, we have to ensure that our ecosystem members possess the right capabilities.
Third, we primarily target the capability gap and our goal is to help companies solve complex challenges that they cannot solve themselves. Therefore, we need to ensure that our ecosystem members possess the right capabilities to co-create the right solutions and outcomes.
Last but not least, we use an outcome-based model which means that we do not get paid unless our Innovators solve the challenge. So, our success is tied to the performance of our Innovators. Thus, we need to ensure that they can get the job done.
Second, innovation is a complex multi-disciplinary process that requires significant knowledge and expertise. Hence, we have to ensure that our ecosystem members possess the right capabilities.
Third, we primarily target the capability gap and our goal is to help companies solve complex challenges that they cannot solve themselves. Therefore, we need to ensure that our ecosystem members possess the right capabilities to co-create the right solutions and outcomes.
Last but not least, we use an outcome-based model which means that we do not get paid unless our Innovators solve the challenge. So, our success is tied to the performance of our Innovators. Thus, we need to ensure that they can get the job done.
We use a proprietary process which results in categorizing Innovators in four (4) categories. Within each category we also rank them in five (5) levels from specialists to solution masters. At the core of this system is a point system that enables us to algorithmically select and match Innovators with the right challenges. Since we are working on an AI enabled solution and intend to patent this process, we cannot divulge more information at this time.
The short answer is that almost any company that has an innovation challenge can benefit. However, our primary target market consists of high growth technology-based or ‘digitally inspired’ companies that are typically categorized as Inc. 500 and mid-market companies.
Once Cenergim identifies and recommends an Innovator and presents the Challenger with the Challenge Agreement that discloses the Innovator profile the Challenger has two (2) business days to accept or reject the Innovator. After this “Evaluation Period” the Challenger forfeits its right to reject the Innovator and will be legally liable for the terms of the Challenge Agreement. Should the Challenger reject the Innovator during the “Evaluation Period” Cenergim will recommend another Innovator at no charge to the Challenger. Cenergim will recommend up to three (3) Innovators to the Challenger for Standard Challenges.
A Challenger has the right to reject an Innovator recommended by Cenergim. However, to reject an Innovator the Challenger will need to formally document and communicate reasons for rejection with the Cenergim Managed Services Team. The Challenger will need to explain in detail the reasons for which the Innovator is not qualified to solve the challenge. By so doing the Challenger also forfeits its right to engage the Innovator and agrees to honor the “non-circumvent clause” and refrain from contacting, communicating, or engaging the Innovator in any form possible. Otherwise, the Challenger will be liable for penalties included in the agreement.
It is an assurance given by the Challengers that warrants that they have the capability to properly identify and analyze their needs and clearly define the challenge at hand prior to submitting a challenge on Cenergim Platform. As a result, the Challenger agrees to keep Cenergim and its Innovator partner harmless in an event that the results of a solved challenge do not meet your expectation if the challenge was not defined properly.
If as a Challenger you believe that you may need help in properly defining a challenge, we recommend that you select one of our Success Plans to ensure success. If you choose not use this service, you agree that you have warranted that you have the capability to do so. As a result, you will forfeit any future claims or disputes that may arise as a result of misunderstandings or lack of clarity.
If as a Challenger you believe that you may need help in properly defining a challenge, we recommend that you select one of our Success Plans to ensure success. If you choose not use this service, you agree that you have warranted that you have the capability to do so. As a result, you will forfeit any future claims or disputes that may arise as a result of misunderstandings or lack of clarity.
Innovator obligations
It is an assurance given by the Innovators that they do have the capability and the resources available to solve the challenge in a reasonable timeframe. It also ensures that they assume the responsibility to conduct their due diligence by seeking clarifications prior to the initiation of work. If required, they also agree to participate in a challenge specific interview with Cenergim Managed Services Team to determine their eligibility to solve the challenge prior to being awarded the challenge.
Subcontracting or third party assistance
Cenergim prohibits Innovators to act as an agency and subcontract work to a third party for several reasons. First, due to confidentiality reasons as Innovators may not be able to institute proper safeguards that comply with our confidentiality requirements.
Second, once a Challenger and Innovator enter into a Challenge Agreement, the Innovator must comply with the intellectual property (IP) terms that warrants that they do possess such IP and are willing to transfer it if necessary to the Challenger. Since, Innovators do not own their contractor’s IP and cannot guarantee such a transfer, they are prohibited from working with any contractor with whom such an agreement does not exist.
Third, in order to receive the reward innovators should accept Cenergim’s escrow partner’s Term of Service which only recognizes one party as the recipient.
Second, once a Challenger and Innovator enter into a Challenge Agreement, the Innovator must comply with the intellectual property (IP) terms that warrants that they do possess such IP and are willing to transfer it if necessary to the Challenger. Since, Innovators do not own their contractor’s IP and cannot guarantee such a transfer, they are prohibited from working with any contractor with whom such an agreement does not exist.
Third, in order to receive the reward innovators should accept Cenergim’s escrow partner’s Term of Service which only recognizes one party as the recipient.
In a rare situation where an Innovator is a solution provider that uses qualified contractors to complete projects exceptions can be granted. However, strict rules will apply as the Innovator should provide proof that their contractual agreements with their contractors meet the strict Cenergim requirements. Further, they must provide a guarantee that their contractors do not have access to the Cenergim platform and cannot access any Challenger information. Finally, the Innovator should ensure that the work performed by their contractor is defined as a separate statement of work (SOW) as a professional services agreement between the two parties. Needless to say, that Innovator assumes all the liabilities arising from breach of contract by their contractor.
Contracting with any such providers is strictly forbidden as none of these platforms meet the restrict legal requirements of Cenergim. Only offline agreements with credible U.S. based providers may qualify in exceptional cases.
Since the penalties are high and can lead to termination and other financial damages, we strongly recommend against using contractors by Innovators. However, in specific cases where a trusted contractor may perform the work, we recommend that the Innovator nominate them as a Cenergim Innovator. Once they qualify they can participate in solving the challenges.
Cancelation
A Challenger may cancel a challenge within two business days after submitting it. Cenergim extends a two day ‘grace period’ to Challengers in case they make a mistake during the posting process. The grace period ends at 5 PM PST of the second business day. As a result, during this period Cenergim will not recommend any Innovators to the Challenger. Once the grace period expires the Challenger is bound by the Terms of Service.
Once a challenge is awarded to an Innovator and the Parties have entered into a Challenge Agreement, cancellation of such challenge will be governed by the terms of the Challenge Agreement.
Payment Service Fee
These fees are determined by Cenergim’s payment processing partners and Cenergim has no control over them. We recommend that you check with the processer for the applicable fees.
The escrow fees are split 50/50 between the Challenger and the Innovator by Cenergim’s escrow partner. Cenergim has no control over these fees and has no access the funds or the partner’s records.
Cenergim escrow partner determines the fees and will charge the Challenger for 50% of them. The Challenger must submit these fees in addition to the challenge reward to the escrow service. The escrow partner then deducts the other 50% from the Innovator proceeds before paying them the remaining challenge reward amount.