Crowdsourcing
= "The term ‘crowdsourcing’, introduced in 2006, describes how the contributions of many can create value."
In the narrow sense, it involves an 'open call' and some process of collective agggregation of the contributions, to distinguish it from mere marketplaces.
Introductory Citation
1. Ross Dawson [1]:
"While many think that crowdsourcing is about cheap labor, there are many crowdsourcing models that are based on tapping a pool of the most talented people in the world, trumping any organization that relies only on their staff."
2. Douglas Rushkoff [2]:
I understand crowdsourcing as kind of an industrial age, corporatist framing of a cultural phenomenon. There’s human energy being expended here. A company can look at that as either a threat — to their copyrights and intellectual property or as some unwanted form of competition — or, if they see it positively, then they see it as almost this new affinity group population to be exploited as a resource.
Introduction
Crowdsourcing is a concept from an article in Wired magazine on the emergence of Distributed Labor Networks.
It refers to the usage of distributed, voluntary collaboration from a wide community of users/participants, used in the context of commercial value generation and innovation. It can be associated with Revenue Sharing strategies.
Please note that when there is a direct connection between production and payment, crowdsourcing then differs from non-reciprocal Peer Production
A related term used in the media field, and not necessarily connnected to commercialization, is User-Generated Content
Also the title of a book on the subject, by Jeff Howe. [3]
Definition
1.
"Crowdsourcing is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call." (http://crowdsourcing.typepad.com/cs/advertising/index.html)
2.
"crowdsourcing involves paying (often very small amounts of money) for the content produced by crowds of people. This model does not likely lead to exceptional content by passionate people, but rather acceptable content by people motivated largely by money. This type of content, I believe, does not support the readership ratios seen in Wikipedia and digg, and you can verify this by visiting some sites that are known to crowdsource.
I put it out to you, that instead of budgetting for crowdsourcing, your money would be better spent catering to your 1% of passionate users." (http://blog.productwiki.com/2007/02/wisdom-of-crowds-nay.html)
3.
"the basic idea is to tap into the collective intelligence of the public at large to complete business-related tasks that a company would normally either perform itself or outsource to a third-party provider. Yet free labor is only a narrow part of crowdsourcing's appeal. More importantly, it enables managers to expand the size of their talent pool while also gaining deeper insight into what customers really want." (http://www.bnet.com/2403-13068_23-52961.html)
4. Ross Dawson:
"The term crowdsourcing, coined by journalist and author Jeff Howe in 2006, has helped us to frame the concept of using crowds to get work done. Implicit in the idea of crowdsourcing is the ability to create value that transcends individual contributions, crystallizing collective insights through structured aggregation. For example competitions, prediction markets, idea filtering, and content rating are all mechanisms by which collective contributions can create better outcomes than individuals or small groups." (Getting Results from Crowds)
Description
Katarina Stanoevska-Slabeva:
"The term crowdsourcing was introduced by Howe (2006) in order to denote the new phenomena of outsourcing to the crowd. Howe (2006) provided also the very first definition of crowdsourcing as follows: “… crowdsourcing represents the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined and generally large network of people in the form of an open call. This can take the form of peer production when the job is performed collaboratively, but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format in the wide network of potential laborers.”
More recently in his blog, Howe (2008, 2009) consolidated the definition in the following form:
· “The white paper version: crowdsourcing is the act of taking a job traditionally performed by a designed agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.”
· “The sound bite version: The application of open source principals to fields outside of software.”
Based on the original definition of Howe (2006) other authors provide extended definitions that concretize the generic terms used by Howe. For example, (Gassmann et. al. 2010), specify the tasks that are sourced from the crowd as being mostly knowledge generating and problem-solving tasks, but also repetitive tasks. They furthermore, concretize that the open call is supported through a Website.
Both definitions point to the distinguishing features of crowdsourcing:
· It is initiated and coordinated by a company that outsources an existing task or has a problem that needs a solution.
· It is directed to the crowd and not to companies and individual users.
· The usual way to initiate crowdsourcing is through an open call over the Internet.
According to Surowiecki (2005), a crowd can be defined as a large set of anonymous individuals. Implicit in this definition is the idea that a firm cannot build its own crowd. The strength of the crowd is the possibility to choose from the contribution of many contributors with different backgrounds, qualifications and talents." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf) '
Typologies
see: Crowdsourcing - Typologies
Areas of Application
What can be crowdsourced?
Katarina Stanoevska-Slabeva:
An interesting question is what at all is crowdsourcable? Is any task or problem suitable for crowdsourcing? Or phrased in another way, for which tasks can companies expect a successful implementation of crowdsourcing? According to (Schenk & Guittard 2011) in general crowdsourcing is a priori not relevant for production tasks. They rather consider it to be relevant “… to perform information on knowledge related tasks involving low fixed equipment costs. In general, crowdsourcing makes it possible to mobilize competences and expertise which are distributed among the crowd. Competence generally refers to the ability of an individual to achieve a set of tasks.” (Schenk & Guittard 2011).
(Gassman et. al. 2010) list in their definition three types of tasks that are subject to crowdsourcing: problem solving, idea generation and repetitive tasks. However they do not describe the suggested types of task in more detail. A more detailed exploration of the suitable tasks for crowdsourcing is provided by (Schenk & Guittard 2011). According to them, crowdsourcable tasks can be classified based on the required competences of the individuals in the crowd into three types: simple, complex and creative tasks. (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Areas of Application
Katarina Stanoevska-Slabeva:
"Crowdsourcing is spreading among all industries and there is a growing body of literature describing case studies and crowdsourcing projects in various industries: for example, in the film industry (Geisler, Willard et al. 2011), in the creative industries (Berthon, Pitt et al. 2008), in retail (Dubach et al. 2011), (Friesike et al. 2010), in high tech industries (Bjelland & Wood, 2008)." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Science
An emerging application field of crowdsourcing is also science (see Howe 2006). Several published case studies show that, data collection and analysis tasks in different scientific disciplines can be outsourced to the crowd (Dickinson, Zuckerberg et al. 2010). This new trend is called ‘Citizen Science’. For example, users have proven to provide valuable contributions in the analysis of satellite pictures with high efficiency (Fritz & McCallum et al. 2009), (Viotti et al. 2010).
Government
Meanwhile, crowdsourcing is applied in public hearings as well. (Brabham 2009) describes the application of crowdsourcing by the German Enquete Kommission des Deutschen Bundestages Internet und Gesellschaft. Another emerging application is also crisis management (Goodchild and Glennon 2010; Zook et al. 2010)."
Geography
"There is a growing body of literature that describes crowdsourcing in different industries and applications. A considerable number of articles describe the application of crowdsourcing to the collection of geographic information. For example the contribution of the crowd to collect and aggregate real world data and to aggregate it in a online map system such as Openstreetmap, has proven very helpful to quickly create a critical mass of such information (Haklay & Weber 2008)."
Companies
Also a considerable body of knowledge deals with the application of crowdsourcing by companies (Vukovic 2009, La Vecchia, Cisternino et al. 2010, Osamuyimen, David et al. 2010). Interesting in this context is the differentiation of La Vecchia et al. 2010, who distinguish among two models of crowdsourcing: a ‘contest’ model and a ‘marketplace’ model." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Typology of crowdsourcable tasks
1. David Bratvold:
"Today crowdsourcing extends far beyond simple graphic design and can be broken down into four main subcategories:
Taking a project and breaking it into tiny bits as seen on Amazon’s Mechanical Turk (“the online marketplace for work.”). Each crowd worker can only see his little bit of the project. You could hire one person to label 1,000 photos or hire 1,000 people to each label 1 photo.
Similar to microtasks, however, workers can see more, if not all, of the project and can get involved with any portions they are knowledgeable in. This form is most common with solving complex problems such as the X-Prize or seeking out a better recommendation algorithm for Netflix.
Getting a crowd to help fund your cause or project. It’s unique because you set a monetary goal and deadline and you must get fully funded by your deadline or you’ll get nothing. Crowdfunding is asking a crowd of people to donate a defined amount of money for a specific cause, project in exchange for various rewards.
Asking a crowd for work and only providing compensation to the chosen entries. Commonly seen in design sites like 99designs." (http://www.businessesgrow.com/2011/08/31/the-top-five-crowdsourcing-mega-trends/)
Simple, complex and creative tasks
Katarina Stanoevska-Slabeva:
"A more detailed exploration of the suitable tasks for crowdsourcing is provided by (Schenk & Guittard 2011). According to them, crowdsourcable tasks can be classified based on the required competences of the individuals in the crowd into three types: simple, complex and creative tasks." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Simple Crowdsourcing Tasks
Katarina Stanoevska-Slabeva:
"According to (Schenk & Guittard 2011), simple tasks are easy to describe and do not require a high cognitive effort and expertise to be understood by a broad, anonymous mass of individuals. Moreover, their completion requires a relatively low involvement from individuals. When simple tasks are concerned, the added value of crowdsourcing does not stem from individual abilities but from the low cost realization of tasks on a large scale. Therefore, financial incentives in crowdsourcing of simple tasks do not go beyond micro payments.
An example of a simple task crowdsourcing is the Open Street Map project, where geographic data is collected and pooled together in order to establish a world map under the creative common license. In this project, contributions are voluntarily and incentives may include self-benefits from the system or the satisfaction of contributing to a public good (Schenk & Guittard 2011)." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Complex Crowdsourcing Tasks
Katarina Stanoevska-Slabeva:
"According to Cambell (1988), complex tasks are characterized by the following features: multiple potential outcomes, multiple potential solution path and presence of uncertainty. Their understanding and performance requires special expertise, problem solving abilities and involves knowledge intensive activities. According to (Schenk & Guittard 2011), the notion of scale does not enter into account (as opposed to simple tasks crowdsourcing), but the firm facing an unsolved complex problem hopes to benefit from expertise and problem solving skills of individuals within the crowd.
Crowdsourcing of complex tasks only makes sense when the required expertise and skills are distributed among the anonymous individuals of the participating crowd. Thus, the required expertise and the relevant incentive schemes are typically problem-specific. This kind of crowdsourcing typically involves a higher remuneration. Complex tasks are related to new product development in innovation projects where the problem solving can be regarded as a complex process.
A specialized intermediary for crowdsourcing of complex tasks is the platform InnoCentive (Lohse 2010). The InnoCentivee platforms is an intermediary which on the one hand, supports companies to publish their complex tasks within research and development activities and, on the other hand, was able to create a Solver-Community consisting of more than 200,000 experts and scientists." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Creative Crowdsourcing Tasks
Katarina Stanoevska-Slabeva:
"Creative tasks are where creativity and uniqueness have the highest priority. Typical examples of creative tasks are the design of logos or similar marketing material. The main goal of a company crowdsourcing creative tasks is not to have a problem solved but to rather benefit from the creative power of the interdisciplinary crowd. (Schenk & Guittard 2011) suggest that regarding creative tasks incentives or participants can be very heterogeneous, ranging from monetary driven to passion-driven involvement. As a matter of fact, observation of crowdsourcing platforms for creative tasks indicate that remuneration associated with crowdsourcing of creative tasks is of an intermediate amount, usually of a few hundred dollars (Brabham 2008, 2009). At least one of the above described types of tasks or even all three types can be identified in many industries." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Players Involved in the Crowdsourcing Process
Katarina Stanoevska-Slabeva:
"The two main players in crowdsourcing are on the one side companies, who provide the problem that needs to be crowdsourced and users, i.e. the crowd, the individual participants that provide the solutions. As a third player, there are also intermediaries who enable the process of crowdsourcing by providing specific platforms and services for companies and for the users.
All three players take over different roles and tasks in the CS process." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Company-based crowdsourcing
"The companies typically provide the problem, which is outsourced to the crowd.
Even though most crowdsourcing initiatives are directed towards an unknown crowd, big globally active companies can apply crowdsourcing also within the company and direct it to employees. With other words, global enterprises have crowds of employees at their disposal. Involving everybody from the executive level to the operational level represents a new form of expertise sharing and competitive intelligence that encourages a type of informality helping to reduce existing or perceived barriers, hierarchies and distances.
Good examples are the Lufthansa wiki and Wal Mart Blog, both calling for ideas to reduce energy consume. In order for a company to be able to use crowdsourcing it has to have an open innovation culture open for extant contributions into the own innovation process. Another important aspect of the companies as a player in crowdsourcing is also their willingness to accept the solutions as a result of the crowd activities.
Companies can apply crowdsourcing in two ways:
1) As an ongoing activity, or
2) as single activities that are initiated once or from time to time.
Examples for ongoing activities are Tschibo (Friesike et al. 2010), Starbucks and others. A successful example of a single crowdsourcing activity is the idea sourcing for the kiosk of the future of the company Valora Retail (Dubach et. al. 2011). Permanent crowdsourcing activities are typically supported by an own platform that is set up and managed by the company itself, while single activities are rather executed in cooperation with intermediaries."
Intermediary crowdsourcing platforms
"The second player which intermediates between the companies and the crowd are specific intermediary platforms (see also Füller et. al. 2010). Examples of such intermediary platforms are InnoCentive (Lohse 2010), Jovoto in Germany, Atizo (Hirsing & Hirschmann 2010) and similar platforms. Intermediaries provide the platform where companies can place their requirements while users can provide their solutions. Depending on the type of the problem, the intermediaries provide different kind of support, starting from helping the company to describe the problem to different possibilities for the crowd to contribute. One of the most important services of intermediaries regarding the crowd is also assuring that relevant participants can contribute to a specific problem of a company. An example in this context is Jovoto, a platform in Germany, which cultivates a crowd of designers and other creative users and by specializing in this area, provide the guarantee that the right crowd with right qualifications and background will participate in the crowdsourcing endeavor. At the same time, the platform provides the necessary tools and instruments for the users in order to enable an efficient participation. This basically means registration possibilities, then search for requests by companies, different kind of design tools for contributions, then different possibilities for communication among the crowd, evaluation of content and similar. With this, the intermediaries play an important role, in particular providing opportunities for crowdsourcing also to companies that don't embrace this as a continuous process but from time to time use it in order to solve very specific problems. Some companies have created their own platform as for example Migipedia, the crowdsourcing platform of the retailer Migros in Switzerland."
Criteria for choosing different platforms
- Source: Getting results from the crowd. Ross Dawson. 2011. pp. 50-51
| Criteria for choosing different platforms | |
|---|---|
| Specialist or general | Most marketplaces are general in nature and cover all kinds of jobs such as programming, marketing, administration, and design. There are some that are particularly strong in areas such as web development, or may be dedicated to one type of work. Usually it is worth starting off on a general marketplace. |
| Reach | Some marketplaces have a strong geographical bias, for example featuring more US-based providers or being focused on a specific country. Some of the marketplaces provide an analysis of the location of their registered providers so you can make comparisons. |
| Features | There are a variety of useful features on each platform which can help you operationally. These include a variety of collaboration and monitoring tools, team rooms, and easy payment of providers. All of the platforms are consistently adding more useful features so check the latest. |
| Charging model | The fees from the marketplaces are generally similar – between 7 and 10% on each transaction – but some provide different models for frequent users. |
| Hourly or fixed fee model | Marketplaces usually handle both types of jobs, but some have more developed features for hourly payments. |
| Recommendations | Speak to other users if you can. Personal recommendations and experiences will give you direct insights. |
The crowd
"The third and most important player in crowdsourcing is the crowd. In the literature the need to attract the right crowd has been stressed as one important key success factor (see for example Howe 2006). For example in case of crowdsourcing of design tasks, a higher potential for getting interesting results is by having a high number of representatives which have a creative background (see also Howe 2006). In this context one important role is played also by intermediaries that are able to attract crowds with specific background. See for example: Jovoto.com a crowdsourcing platform for designers.
Further aspects that are considered as important and related to the users are:
· Are the members of the crowd known to each other and can they see each other's contributions? For some types of crowdsourcing as for example prediction or information market, the analysis of the user behavior has shown that the results are better if members of the crowd don't know each other and cannot see the contributions of others’ (see Howe 2006).
· Motivation to participate is also an important aspect broadly discussed in literature see for example (Brabham 2008, Brabham 2009), (Kleemenn et. al. 2008). (Proulx, Heaton et al. 2011) discuss the conflict among self responsibility, an empowerment of the user and the need to follow the rules of a platform." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
See: User-Initiated Crowdsourcing
The Crowdsourcing Process
Katarina Stanoevska-Slabeva:
"Existing literature delivers various attempts to give an overview of crowdsourcing related processes identifying and analysing the underlying characteristics.
Malone et al. (2010) adopted a biological metaphor determining the genome of collective intelligence systems as the combination of building blocks he refers to as genes. Thus, he delivers an instrument to characterize real examples.
Geiger et al. (2011) developed a taxonomy framework of crowdsourcing partitioning the process in five phases from the preselection of contribution to the remuneration. Different combinations of process characteristics describe single different crowdsourcing examples.
Doan et al(2011) identified nine dimensions related to crowdsourcing. An aggregated view on the crowdsourcing process is provided by (Gassmann et. al. 2010), who consider 5 steps: 1) Preparation, 2) Initiation; 3) Execution; 4) Evaluation; and 5) Exploitation.
Before the company can start with the specific crowdsourcing processes, a strategic decision has to be taken to crowdsource or not. Companies have to evaluate if crowdsourcing is suitable for identified tasks and problems and if it can be integrated in their existing innovation as well as research and development processes.
In case a positive decision is taken in favor of crowdsourcing, further aspects that need to be clarified are as follows:
1. What are the tasks and problems that crowdsourcing is going to be applied for and is crowdsourcing going to be an ongoing activity or just single projects from time to time?
2. Is an own crowdsourcing platform justifiable or rather the cooperation with an intermediary the right solution? Based on the strategic decisions above, the specific crowdsourcing policy and governance framework for a company is created. In context of this framework, single crowdsourcing processes take place." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Five Processes
Katarina Stanoevska-Slabeva:
"According to (Gassman et. al. 2010), the specific activities in the five processes phases of crowdsourcing can be summarized as follows:
Preparation
· In the preparation phase, the problem or task is identified that is going to be crowdsourced. Furthermore, necessary contracts with intermediaries are defined.
Initiation
· In the initiation phase of the crowdsourcing process, all preparation activities take place. The concrete wording of the description of the task or problem is defined (see for example Dubach et. al. 2011), the evaluation criteria and procedures are selected, the online publication is prepared and eventually a crowdsourcing platform is developed and set up, and further awareness creating activity are identified and prepared.
Execution
· In the execution phase the requests by the company is published and the crowd provides their solution proposals. The company might provide support in form of: clarification, answers to participants' questions and other kind of support to the participating individuals (see for example Dubach et. al. 2011). In this phase, a critical success factor is also the prevention of malfunction and misuse of the platform. Furthermore, an intensive quality control is necessary (see for example O'Neil 2010, and Giles 2005).
Evaluation
· After all contributions are collected, they are assessed and evaluated by the company in the evaluation phase. Depending on the number of contributions, this can be a resource and zime consuming process. Thus, the availability of sufficient resources inb the company is a critical success factor (Dubach et. al. 2011). The evaluation phase ends with the selection of the winning contribution of the crowd and the remuneration of the winners.
Exploitation
· In the exploitation phase, the company translates the solution provided by the crowd in products, services and/or their features and involves them to the innovation and implementation process." (http://berlinsymposium.org/sites/berlinsymposium.org/files/crowdsourcingenabledinnovation.pdf)
Status
Trend Update 2011
David Bratvold:
"1) Curated Crowds
The bigger your crowd doesn’t necessarily mean better output when it comes to crowdsourcing. This has been made apparent with the early days of crowdsourcing design sites. A design contest yielding 1,000 designs can become simply unmanageable. If you offer a prize large enough, any monkey with a crayon could contribute. I’m not saying a large crowd produces bad results, I’m simply stating there will be bad among the good. Luckily, there are almost always a lot of great designs, but it takes extra time to sift out the bad.
Sites like Genius Rocket have begun shifting to a curated crowd model. Anyone can request to join their crowd, however, they must prove they’re talented before being able to participate in some projects, or even at all. LogoTournament has been silently curating their crowd since the early days.
2) Quality Improvements
As microtasking gains in adoption, more crowdsourcing platforms are seeing success with adding an extra level of quality control on top of the basic input – output model made popular by MTurk. If you’ve used MTurk, you’re fully aware the results you get may be less than correct. Sites like Serv.io & Microtask have added extra redundancy and QA checks to ensure high levels of accuracy. If a client requests it, Serv.io can maintain perfect accuracy when needed. As this option becomes more available, people will be demanding 99.9%-100% accuracy, considering it doesn’t incur a lot of extra expense.
3) The Standardization of Crowdsourcing
As it’s been pointed out, crowdsourcing is not an industry, it’s currently an undefined space. The current leaders in crowdsourcing are working to define this space and standardize as much as we can. Groups like the Crowdsortium are for players within crowdsourcing to discuss what’s going on. Daily Crowdsource, along with David Alan Grier, are leading the pack towards standardization. Grier has been pushing for a trade association for quite some time, and recently has begun publicly discussing it. Daily Crowdsource, Grier, and other leaders are working to define the official taxonomy of crowdsourcing. All these recent motions are to help standardize crowdsourcing in order to ensure a healthy future.
4) Corporate Acceptance
Crowdsourcing isn’t just a fad for early adopters. In fact, several Fortune 100 corporations have taken a big step into crowdsourcing. General Electric is leading the charge with multiple million dollar open innovation projects. Others like General Motors, Procter & Gamble, and PepsiCo continue to execute crowdsourcing projects (not just one-off publicity stunts). Amazon even built one of the largest crowdsourcing platforms. It’s not often a new process is adopted so quickly by large corporations, but this will make it easier for other Fortune 100 corporations to begin crowdsourcing, which will trickle down to smaller corporations.
5) Early Adoption
Although you may be familiar with the term, crowdsourcing is still in the early adoption phase. A very small percentage of people are familiar with everything crowdsourcing can do. Sure, any tech geek can name 99designs, but can you list 10 other uses of crowdsourcing? Were you aware you could build a car, stress test your website, or volunteer your “waiting in line” minutes to a charity all with the help of crowdsourcing?" (http://www.businessesgrow.com/2011/08/31/the-top-five-crowdsourcing-mega-trends/)
Discussion
See: Crowdsourcing - Discussion
Examples
Crowdsourcing examples at http://crowdsourcingexamples.pbwiki.com/
Crowdsourcing Examples has seperate tables for the following categories:
- Individual businesses or sites that channel the power of online crowds
- Brand-sponsored initiatives or forums that depend on crowdsourcing. (included those that are no longer active)
- Brand initiatives that allow users to customise their products
- Brand-sponsored competitions/challenges focussed on crowdsourcing
The three first examples below are from the Business Week article [4]
Swarm of Angels
URL = http://www.Aswarmofangels.com
"This British open source film project takes on Hollywood's traditional business model, aiming to create cult cinema for the digital age. Subscribers—the "angel" investors that "swarm" to create the site's name—pay roughly $50 (£25) each to join. The site aims to draw 50,000 angels to create a film with a $1.8 million budget. Eventually, the community will vote to decide which film will be made." (http://www.businessweek.com/innovate/content/jan2007/id20070118_768179.htm)
CafePress
"This Foster City (Calif.)-based online retailer lets members create, buy, and sell merchandise. Entrepreneurs Fred Durham and Maheesh Jain founded the site in 1999 to let members—the site reports 2.5 million—transform their artwork and ideas into new products and sell them through an online storefront with no up-front costs or inventory to manage. Members can also personalize their own gifts by adding touches to one of 80 available products. CafePress.com sets a base price on products and takes care of printing, packaging, processing payments, and customer service; sellers decide how much to charge for their products." (http://www.businessweek.com/innovate/content/jan2007/id20070118_768179.htm)
Crowdsourcing and Sustainability
Matthew Yeomans:
"In early January, Verizon announced a new sustainability project called Powerful Answers. Created to raise awareness of the wireless network's new 4G service, the centrepiece of the project is a $10m (£6.3m) challenge for entrepreneurs, individuals and companies to generate innovative ideas in the healthcare, education and sustainability sectors.
If you think this sounds a lot like GE's Ecomagination and Huggie's Moms Inspired or even Heineken Ideas Brewery, Sony Futurescape or WWF Green Ideas, you'd be right. All these very smart sustainability projects embrace crowdsourcing as a mobilising and marketing tool, which taps into the "wisdom of the crowd" to demonstrate just how much each company needs the insight and input of its social media community to realise its sustainability goals. Activists like Greenpeace have also used a form of crowdsourcing to hammer multinationals like oil company Shell.
The allure of crowdsourcing for sustainability and CSR communications has long proven irresistible to both companies and activists despite some spectacular failures." (http://www.guardian.co.uk/sustainable-business/blog/crowdsourcing-company-dna-sustainability)
Crowdsourcing Platforms
CrowdSpirit
"This French startup plans to use crowds to develop and bring to market tangible, inexpensive, electronic devices such as CD players, joysticks for video games, and Web cams. The community will handle all aspects of the product cycle—its design, features, technical specifications, even post-purchase customer support." (http://www.businessweek.com/innovate/content/jan2007/id20070118_768179.htm)
Freelancer
Freelancer was founded in Sweden as getafreelancer.com in 2004. I first wrote about it in 2005 in an overview of the space. For many years it was the dominant online services exchange in Europe, and one of the top three globally. In May 2009 it was bought by Australian company Ignition Networks, which also acquired the domain Freelancer.com. The company is run by veteran tech entrepreneur Matt Barrie, who most recently founded and ran specialty processor firm Sensory Networks Inc.
99designs
99designs has clients set a design brief and budget, and then provide feedback to designers during the design phase, ultimately selecting a winner who is awarded the full budget. It has been very successful though its model has many detractors in the design community. I wrote a post titled 9 practical steps to getting great outsourced design on 99designs reflecting on my experiences using the site.
DesignCrowd
DesignCrowd began life as DesignBay, using a similar prize-driven model to 99designs. Late last year it acquired the US company DesignCrowd and adopted its name. DesignCrowd is using more nuanced approaches to awarding prizes, including giving second place prizes and participation payments.
Others
Commentary of last three from http://rossdawsonblog.com/weblog/archives/2010/02/australia_is_be.html
See also: Cambrian House; and Kluster
More examples
The article mentions Innocentive as an example of the process.
"YourEncore, for example, allows companies to find and hire retired scientists for one-off assignments. NineSigma is an online marketplace for innovations, matching seeker companies with solvers in a marketplace similar to InnoCentive."
Rent A Coder [5]
From http://www.bnet.com/2403-13068_23-52961.html:
Netflix, the online video rental service, uses crowdsourcing techniques to improve the software algorithms used to offer customer video recommendations. The team or individual that achieves key software goals will receive $1 million.
Eli Lily and DuPont have tapped online networks of researchers and technical experts, awarding cash prizes to people who can solve vexing R&D problems.
Cambrian House lets the public submit ideas for software products, vote on them, and collect royalties if a participant's ideas are incorporated into products.
iStockphoto.com allows amateur and professional photographers, illustrators, and videographers to upload their work and earn royalties when their images are bought and downloaded. The company was acquired for $50 million by Getty Images.
Threadless.com lets online members submit T-shirt designs and vote on which ones should be produced.
Specialized Crowdsourcing Examples wiki: "Anjali Ramachandran, a strategist at London-based digital agency Made by Many, posted a wiki with 135 companies currently engaging in some form of crowdsourcing. It's a great start, and Anjali is asking us all to help expand it. Such efforts are crucial to the maturation and understanding of crowdsourcing." [6]
Case Studies
Examples from an article at http://www.bnet.com/2403-13068_23-52962.html
Proctor & Gamble
"During a 2002 Proctor & Gamble brainstorming session, a company manager had a flash of inspiration: Why not print text or images on Pringles potato chips? Great idea, but there was a catch: no one at P&G knew how to do it. To find the expertise it needed, P&G tapped into RTC North, a network of European scientists, and found a small bakery in Bologna, Italy, run by a professor who had invented a technology that uses ink-jet techniques to print pictures on pastries. By licensing the technology, P&G was able to launch the new Pringles Prints chips in less than a year—and at a fraction of the cost of doing it in-house. Indeed, after decades of rarely looking outside its own walls for ways to improve brands like Pringles and Crest, P&G now taps the brainpower of scientists around the world by using crowdsource research networks like Innocentive.com and YourEncore.com. The result: 40 percent of the company's new innovations now come from outside P&G, up from 10 percent in 2000."
O'Reilly Media
How do you know if your products receive adequate placement on store shelves? Executives at O'Reilly Media, a privately held company best known for publishing technical manuals, heard anecdotal stories that its books were difficult to find in big chain bookstores. Sending teams of market researchers from store to store would have been prohibitively expensive, so the company instead turned to an online user group devoted to its books. O'Reilly sent email to members of the group, soliciting volunteers to visit local booksellers and submit monthly reports of what titles were on the shelves. Some 500 people volunteered, and 75 of those happened to live near bookstores that were of particular interest to O'Reilly execs. For three months, the volunteers submitted spreadsheets to the company, along with anecdotal impressions of their experiences inside the stores. In return, O'Reilly gave the volunteers free books. "It answered our question: Are bookstore chains doing a decent job getting our books on the shelves?" says Sara Winge, O'Reilly spokeswoman. "Turns out, the stores were doing a pretty good job, but that was a very hard question to answer without having volunteers who were willing to actually go see for themselves."
Failures
Graham Hill:
"The first of these is Dell with its Ideastorm programme. Anyone can come up with a computer-related idea, post it on the Ideastorm website, vote for the best ideas, comment about them and hopefully, see them implemented. Sounds great. Why not harness ideas from customers? And why not get customers to vote for them to cut programme staff costs. Unfortunately, crowdsourcing has a number of serious problems. The first problem is that customers, even large numbers of them, typically produce average, unremarkable, incremental innovations, rather than the step-change innovations that companies hope for. Although 12,483 ideas have been posted on the website since Ideastorm started in February 2007, only 366 have been implemented to-date, a miserly 2.9% of the total. And most of the implemented ideas provide only incremental improvements to Dell's business. To its credit, Dell says that Ideastorm is intended as an extension of its relationship with its customers, rather than just as a source of product ideas. Just as well, as Ideastorm is a failure as a source of winning new innovations.
The second example is Starbucks with its My Starbucks Idea. Similar to Ideastorm, My Starbucks Idea allows any registered customer to post an idea, vote for the best ideas, comment on them and see them implemented. Or not as the case may be. My Starbucks Idea, despite receiving over 75,653 ideas, has only implemented 315 ideas to-date, an even more miserly 0.4% of the total. You wouldn't think that having ideas to improve a coffee-house chain would be all that difficult to implement. But the low rate of implementation illustrates the second problem with crowdsourcing; that customers have no idea of how the business works, what business capabilities it has and thus, no idea whether even the simplest of ideas can realistically be implemented, (let alone whether they will turn a profit)." (http://www.customerthink.com/article/how_understanding_customer_jobs_turns_crowdsourcing_into_smartsourcing/)
Historical Precedents
Peter LaMotte:
"Without the ambitious innovation of the crowd, we wouldn’t have modern shipping, canned soup, or even margarine. Yes, each of these discoveries were made through bounties being cast to an open crowd in search of a solution.
Longitude
Means of figuring out longitude and latitude were easy enough in the 1700s, that was as long as you were on dry land. For ships at sea, on the other hand, it was nearly impossible, leading to thousands of lives lost in shipwrecks. Every great western nation in the 17th and 18th century offered bounties for a solution to the problem from the Spanish King to the Dutch merchants.It took 150 years, but a crowdsourced solution was finally found, and one that really underscores the power of crowdsourcing itself. It came from a relatively uneducated English watchmaker by the name of John Harrison.
By allowing anyone to participate in solving the problem, a solution was found for a puzzle that had baffled some of the brightest minds in history (even Galileo!). In the end, it was found in someone who would never have been tapped to solve it to begin with.
Canning
While canning food may not seem as important as preventing the pre-industrial globe’s primary means of transportation from running aground, it may in fact be more important. When Napoleon began his invasion of Europe in the 18th century he quickly ran into the problem of feeding his army once they left the safety and abundant food found on French farms. To solve the problem, he established a prize of 12,000 francs for the most innovative and effective means of staving off the troop’s hunger. After a few years of experimentation, Nicolas Appert submitted the winning solution: boiling wax sealed jars to preserve food from spoiling. Once again, it was due to the simple act of turning away from one team to a diverse collection of individuals to source the idea that would change modern food production.
Margarine
Canning food wasn’t the last time the Napoleon family would crowdsource a solution through a contest. When Napoleon III saw the appetite of his military and nation was surpassing production of butter, he once again set a prize for the first to develop a suitable supplement to replace this staple of the French diet.
In 1869, a French chemist by the name of Hippolyte Mege-Mouries found that melted down fat and milk could make a satisfactory replacement for butter. He named it oleomargarine, later shortened to margarine. Interestingly enough, Mouries later sold the patent to the company Jurgens, which later merged with another company to become Unilever–a company that has been quick to adopt creative crowdsourcing in recent years." (http://dailycrowdsource.com/2011/07/11/crowd-leaders/crowd-leader-peter-lamotte-crowdsourcing-isn%E2%80%99t-new-only-the-word-is/)
Key Books to Read
- Crowdsourcing: How the power of the crowd is driving the future of business. Jeff Howe. Random House, 2008.
Review:
"Crowdsourcing poses a profound challenge to the conventional notions of the structure of the firm as a fundamental economic unit. It suggests that the traditional demarcations between suppliers, contractors, employees, distributors and customers are breaking down.
The ideas in this book are not all new. But it does bring the concept alive with rich and detailed case histories. It is the product of a well-connected and talented journalist. It is carefully researched and crisply written, and the phenomenon it describes is here to stay." (http://www.managementtoday.co.uk/search/article/842430/books-collectivism-capitalism/)
More Information
- visualization of 22 categories within 8 business models (including non-profit), by Ross Dawson [7]
- the Crowd Business Models framework, http://www.resultsfromcrowds.com/features/crowd-business-models/
- Crowdsourcing services page for a more complete view of crowdsourcing examples: http://www.resultsfromcrowds.com/features/crowdsourcing-services/
Specific sectors:
Related concepts:
Also:
- See our entry on the FLIRT Model of Crowdsourcing
- The trend will be monitored here, at http://www.crowdsourcing.com/ and here at http://crowdsourcing.typepad.com/cs/
- Microstock Photography is often mentioned as an example of the process.
Articles
- Howe, J. (2006). “The Rise of Crowdsourcing “ WIRED 14(6): 176-183.
- Howe, J. (2008). Crowdsourcing : why the power of the crowd is driving the future of business. New York, Crown Business.
- Howe, J. (2009). “Obama and Crowdsourcing: A Failed Relationship?” Retrieved 01.05.2010, from http://www.wired.com/epicenter/2009/04/obama-andcrowd/.
- Guide to the Crowdsourced workforce: mentions different projects, especially in the field of design]
Blogs
Podcasts/Webcasts
- Podcast interview with Jeff Howe on Crowdsourcing
- Video trailer of his book
- Webcast presentation of Don Tapscott on Crowdsourcing