What if you took everything you had and made it publicly available on the Internet? What if you opened up your most secret of secrets and encouraged your customers, friends, family members, peers and, yes, even your competitors to play with, tinker and devise that better mousetrap?
It sounds a little insane. Welcome to crowdsourcing.
"For the last decade or so, companies have been looking overseas, to India or China, for cheap labour. But now it doesn’t matter where the labourers are – they might be down the block, they might be in Indonesia – as long as they are connected to the network. … Technological advances in everything from product design software to digital video cameras are breaking down the cost barriers that once separated amateurs from professionals. Hobbyists, part-timers, and dabblers suddenly have a market for their efforts, as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd. The labour isn’t always free, but it costs a lot less than paying traditional employees. It’s not outsourcing; it’s crowdsourcing."
That’s how Jeff Howe first coined the term, "crowdsourcing" in the June 2006 issue of Wired Magazine for the article titled, The Rise of Crowdsourcing. He followed up with the book Crowdsourcing – Why the Power of the Crowd Is Driving the Future of Business (Crown Business), and he also blogs where he includes another definition:
"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."
It goes by many other names as well. Some call it "mass collaboration," others call it "the wisdom of crowds," and when money becomes a part of the play, best-selling author and technologist Don Tapscott wrote about it and called it Wikinomics.
And with a new way of looking at and doing things comes with it all of the usual controversy as well. While there are some obvious and inherent benefits to crowdsourcing that include cheap (and sometimes free) labour, the exploration of business problems at a fairly low cost, and payment (if there is one) happening based on results, many feel that there are also many bigger issues with this type of channel. According to Wikipedia:
"The ethical, social and economic implications of crowdsourcing are subject to wide debate. … Some reports have focused on the negative effects of crowdsourcing on business owners, particularly in regard to how a crowdsourced project can sometimes end up costing a business more than a traditionally outsourced project."
There are even some slight nuances to the nomenclature according to Wikipedia as well: "The difference between crowdsourcing and ordinary outsourcing is that a task or problem is outsourced to the public rather than another body. The difference between crowdsourcing and open source is that open source production is a co-operative activity initiated and voluntarily undertaken by members of the public. In crowdsourcing the activity is initiated by a client and the work may be undertaken on an individual, as well as a group, basis."
Threadless is a new type of clothing company. The wildly popular e-commerce website sells a unique brand of T-shirt. They are designed by you, for you – literally. Instead of working tirelessly with a slew of designers or spending time in Europe trendspotting for the latest fashion craze, the owners of Threadless decided to crowdsource their product. Anyone is welcome to design a T-shirt.
The designs are then posted and voted on by the community on its website. The designs with the most amounts of attention and votes get produced and sold on the website. Threadless does not design T-shirts. Threadless crowdsources the design and then produces and sells them.
Threadless manages a community. The community creates the product. What do you think their annual budget is for new products development and design? How do you think that compares with American Apparel or Old Navy?
Wikipedia is one of the best and most popular examples of something that is crowdsourced. And, what could be nobler than leveraging a vast network of individuals to curate, edit and crowdsource the knowledge of the world?
Wikipedia is the online encyclopedia that anyone and everyone can edit. The technology is based on a wiki – which is a simple Web page that anyone can write on or update. You can type in any kind of information you would regularly find in an Encyclopedia Britannica, and Wikipedia will return an article (or Web page) that has content that has been created by the entire Internet community.
The percentage of contributors pales in comparison to the users (about one per cent of Wikipedia’s traffic edits the actual pages), but the spirit of this content is astounding if you consider that no one is paid anything to contribute or edit, and the company itself – created by Jimmy Wales – is a non-profit organization made up mostly of volunteers. To date, there are over 2.6 million entries in the English version alone.
What does all of this mean to business? Everything. Companies as diverse as Dell (Ideastorm) and Starbucks (My Starbuck’s Idea) have embraced crowdsourcing on various levels. Both companies have deployed specific websites that are asking their consumers for their thoughts, ideas and suggestions on what the company can be doing better, or what they should be looking at.
In essence, they’re using the power of the Internet and the wisdom of the crowds to get immediate, real and actionable insights from their consumers.
If you needed one question answered about the future of your business, what would it be, and could you open it up to see what a crowdsourced answer might look like?
The above posting is my twice-monthly column for the Montreal Gazette and Vancouver Sun newspapers called, New Business – Six Pixels of Separation. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original versions online here: