2.5 BILLION HEADS ARE BETTER THAN ONE

Crowdsourcing has become a valuable tool

While the term crowdsourcing may sound new, the concept is not. It’s been common for centuries for governments and companies to ask the masses for help, either by force, by contest, or by appealing to the volunteer spirit.

chronometer Way back in 1714, the British government knew the necessity for the country to participate in sailing the globe for exploration, invention and trade. However, sailing can be a dangerous business. So, the government offered up a contest asking the public for a solution. That’s how the marine chronometer came about. John Harrison invented a way for sailors to navigate using the stars.

Fast forward to 1858 when the Oxford English Dictionary was created. When a group of scholars was crafting the dictionary, they needed help with the thousands of entries and relied on volunteers to create entries based on their areas of expertise.

The idea of reaching out to the public to help solve problems isn’t a new one, but it wasn’t until the Internet became widely used that companies began using the concept so much there needed to be a term for it. “Crowdsourcing” was born.

There are more than 7 billion people in the world and Nielsen Online reports that 2.5 billion of those people have access to the Internet. While large companies may have 150,000 people working for them and small companies could have as few as five, there is a large margin of untapped talent that could provide services to companies who find value in using crowdsourcing.

Crowdsourcing doesn’t sound as big and scary as the term might suggest. It can be as simple as sending out a Twitter question or creating a Facebook post asking for feedback on a product. Police crowdsource when they ask for “anyone who may have seen something to come forward.” News outlets even use crowdsourcing when they ask readers or viewers to share information, breaking news video and even pet photos. (Check out this new app the Guardian in the UK is using to crowdsource.) In a more advanced sense, companies can use crowdsourcing websites to solicit innovative ideas for products, logos and other things a company might want to think outside the box on.

Companies such as Amazon, Netflix, istockphoto.com and DuPont have embraced the idea of tapping into talent outside the company’s workforce. According to bizmedia.com, companies have paid between $1-2 billion for ideas and products generated from crowdsource solicitations.

netflix2What does Netflix need with crowdsourcing? Something they were willing to pay $1 million for. Netflix offered the prize to anyone who could write an algorithm that could outperform the one the company uses to make recommendations to consumers. In September 2009, the company paid out the prize. Team “BellKor’s Pragmatic Chaos” beat out more than 41,000 teams from 186 countries.

And while the Netflix prize is on the high end of payouts for a request that could only be complete by people with a highly-specialized skill set, there are many contests and contributions that can be made by amateurs. Crowdsourcing can certainly provide an avenue for up-and-coming innovators and creative minds that might not be able to make a connection with a company due to location or other circumstance.

ThreadlessThreadless may be one of the most popular businesses in the crowdsourcing world. Freelance designers submit T-shirt designs and customers vote on the artwork. The most popular submissions result in a cash payment and the T-shirt being manufactured by the company. While it’s not a mega pay out, it’s money made from the comfort of wherever designers happen to be. The Threadless website reports that the company has paid more than $7 million to about 1,500 artists for a total of about 274,000 T-shirt designs. It’s win-win for the company who doesn’t have to hire designers, pays a minimal amount for artwork and also makes money off of the sale of T-shirts.

There are many benefits to crowdsourcing. It affords an opportunity for companies to hear from their consumers, or potential consumers. Crowdsourcing can keep company overhead low. Also, since many products, such as T-shirts produced by Threadless, are voted on or commented on prior to production the idea is already tested.

But while there are many positives to crowdsourcing, there are also downsides. Because ideas are thrown to the masses, there is no guarantee that the right person with the needed qualifications will see the call for help. Many times crowdsourcing opportunities don’t pay much, companies may not see repeat submitters who are qualified. There’s also been some push back from skilled professionals. While photographers have previously charged $100 and up per stock photo, companies such as istockphoto.com enable companies to find photographs for less than $5. That’s great for a company’s budget, but bad for the professionals who have made their living off of a particular skill. Crowdsource responders are also working on their own time, so companies who have rush projects might not find the method valuable in that sense.

Finding a balance between using qualified company employees and utilizing crowdsourcing requires planning and balance.

KONICA MINOLTA DIGITAL CAMERAOne example of a company has been able to integrate crowdsourcing into their business plan successfully is Proctor & Gamble. According to the company, 50 percent of company product ideas were coming from outside the company by 2010. P&G reports there are now 1.5 million people in the company’s extended network. P&G calls their crowdsourcing program “Connect & Develop.” Through the program, P&G has created 137 products, including Olay Regenerist, Swiffer Dusters, and Crest Spinner Brush. Through Connect & Develop, the company was even able to find a way to print text on potato chips. A bakery in Italy was already using the technology and P&G licensed it from them by way of the company’s crowdsourcing program. The product was on store shelves within a year.

Crowdsourcing will no doubt continue to change and shift due to emerging technologies and innovative ideas on how companies, governments and other organizations can put to use the collaborative efforts of the public. Are there ways companies could be utilizing crowdsourcing that they aren’t? Please share your thoughts. (See what I did there? I just attempted crowdsourcing, myself.)

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Posted on April 29, 2013, in Journalism, New Media, Public Relations, Social Media, Strategic Communications, Technology and tagged , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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