Crowdsourcing, Share Risk To Increase The Gain

“[T]he world is becoming too fast, too complex and too networked for any company to have all the answers inside,” said a prescient Yochai Benkler, Professor at Harvard and author of “The Wealth of Networks”.  And what is causing this complexity and networks?

People.

And it is these people who are giving rise to a powerful new movement that is empowering both them and the companies they are working with. Welcome to the age of Crowdsourcing.

The word crowdsourcing was coined in 2005 by two editors at Wired Magazine, Jeff Howe, and Mark Robin­son. It arose after the pair noticed a proliferation of busi­nesses using the Internet to outsource work to the public at large. According to Jeff and Mark, a crowdsourced ac­tivity is one where members of the public are sought to contribute to a project by giving their time or money. Sometimes their contribution is compensated, and some­times it is done simply out of good will.

Even before a name had been found to baptize this phenomenon, crowdsourcing was already a major trend. During the early 2000s, many companies embraced the crowd spirit to launch new ways of doing business, char­ity work and almost anything which could be divided up into smaller parts doable by many individuals.

Wait!

This must be the ultimate capitalistic business model, right? Devise something useful which an individ­ual cannot finish by his or herself. Create a platform to realize this goal and then crowdsource the work to mil­lions of faceless volunteers to complete the job. Free, or at least cheap employees and limitless profit!

The Difficulties With Successful Crowdsourcing

This could not be further from the truth. Successful crowdsourcing is difficult and fraught with problems. To engage a crowd usually requires one to appeal to some­thing else in people other than their desire to earn money. Even when offering compensation, surprisingly, people will often rather volunteer their time than accept a small payment to help others.

In an example described in the landmark book, Pre­dictably Irrational, written by the renowned behavioral economist Dan Ariely, a group of lawyers was offered $30 an hour, instead of their usual far higher fees, to work for impoverished pensioners. The fairly obvious re­sult? They refused. However, in an unusual twist, the lawyers were then requested to work on a pro bono basis, and they promptly agreed. Hence, the way to garner peo­ple’s willingness to perform work is not as obvious as our intuitions may lead us to believe.

However, the volunteer vs. paid conundrum is typical of many decisions facing beginners wanting to crowdsource a solution to a problem. So, if we decide not to engage people on a voluntary basis, and there is a task which one can put a price tag on, then why shouldn’t one outsource the job to the “crowd” and wait for the results? The first problem that arises is the deluge of ideas. The many, many suggestions mean someone has to consider and evaluate them.

It may or may not be a good way to solve a problem—to dedicate resources to assess the crowd’s responses to a task. Those same resources may be better used solving the problem itself, instead of sifting through the half-con­sidered, half-baked idea-dough from amateurs. Especially if the person reviewing the submitted ideas is a highly trained specialist.

However, in reality, many companies assign the task of sifting through responses to junior staff to save money. Unpaid interns are often used for this task, although it leaves one wondering how many good ideas are ship­wrecked in the shallow experience of the corporate ordi­nary seamen?

One way of dealing with this problem is to reemploy the crowd. Ask the crowd for the ideas and then ask them to vote for the best one! For certain activities, this can be a useful trick. However, just because people are able to suggest solutions does not guarantee they are capable of successfully evaluating them.

The Crowdsourcing Revolution

Despite these difficulties, to say that crowdsourcing has been anything less than a revolution would be an un­derstatement. As you can see there are many aspects and opportunities presented by crowdsourcing. The many challenges which have been conquered by this method are impressive. The challenges which crowdsourcing has been yet to solve will be the ones which solidify it as one of the most powerful innovation tools available right now. It is one of six topics I explore in depth in my forthcoming book, Innovation Tools, to be released 5 July 2016 (click here).

Part of this was an excerpt from my forthcoming book Innovation Tools, to be released 5 July 2016 on Amazon (click here).