Crowdsourcing Teems with Promise

For quick and cost-effective solutions, organizations are wise to turn to crowdsourcing. Pro or con?

Pro: Benefits for All Parties

When 25,000 pages of Sarah Palin’s e-mails were made public in June, journalists weren’t worried. If the e-mails held any relevant information the public needed, they would find it. They had people willing to sort through the content in record time, and for free. You.

Welcome to the wonderful world of crowdsourcing, where tasks are outsourced to a large, often unidentified group, through an open call via the Internet. And for repetitive tasks, this has worked wonders. Just look at SeeClickFix, a website that lets volunteers anywhere in the world report non-emergency neighborhood issues such as potholes.

If crowdsourcing such "menial" tasks is now an accepted solution to face the exponential amount of data we produce, how does it fare against complex problems, or to generate good ideas? Of course, we could talk about the free operating system Linux or the popular online encyclopedia Wikipedia,

We’re more interested in the increasing number of companies that use crowdsourcing to solve complex R&D problems and drive their innovation. This includes IBM’s IdeaJam and P&G’s Connect+Develop, which put problems out to mostly qualified researchers and industry experts.

In this case, crowdsourcing’s cost and speed advantage as well as good ideas can come from anywhere. And they often do. Crowdsourcing helps a company tap into an outside base of knowledge, overcome the in-company bias and technical specificity of the field, and get results. Throughout history, innovation has often occurred via cross-pollination of fields.

The Web has only helped speed up the process, on a global scale.

Con: An Invitation to Trouble

Crowdsourcing brings its share of problems.

In the case of R&D problems, sorting through a pile of answers, some of which might be completely irrelevant, takes time and resources. IBM’s IdeaJam generates thousands of answers that all need to be addressed. Confidentiality worries regarding trade secrets and intellectual property have forced companies to be very careful about what they post on their sites. Some have chosen to outsource the entire process to open problem-solving platforms, which manage crowdsourcing for them, thus eliminating both issues at once.

Yet the most competitive crowdsourcing market involves graphic design. From T-shirts on Threadless.com to logos on 99designs.com, companies believe that crowdsourcing creativity is the better and much cheaper solution. It allows up-and-coming graphic designers to tap into a previously closed market. But for established professionals, it’s a different story. Crowdsourcing dramatically pushed down prices, and some believe that when a design gets crowdsourced, creativity dies. The first few designs end up dominating the creative output of the entire contest, and logos are often created and then "adapted" to fit the company’s guidelines.

So what about using crowdsourcing to generate market pull? Some companies are able to make the most of it. Starbucks (SBUX) interacts with its customers by letting them create designer coffees. But letting the public run your advertising campaign unchecked can turn into a PR nightmare.

Such was the case in 2006 for GM (GM), which used a crowdsourcing contest to mash up Chevy Tahoe ads. People seized the opportunity to criticize the car’s impact on the environment and litter the fake ads with lines such as "It’s Global Warming Time." Damage to the brand was significant.

Over the past decade, the Web has unleashed the full power of crowdsourcing. Using it unchecked can easily—and very quickly—break you.

Opinions and conclusions expressed in the Debate Room do not necessarily reflect the views of Bloomberg Businessweek, Businessweek.com, or Bloomberg LP.

Reader Comments

Squeezebox

If you had any kind of talent, you'd have to be a fool to participate in crowdsourcing. The old adage "why buy the cow when you can get the milk free?" comes to mind.

Daniel

I think it's important to distinguish between the "thousand monkeys" type of crowdsourcing, where a large number of people are given a meager incentive to perform a menial task; and more sophisticated, structured crowdsourcing that follows some kind of intelligent process, like the ones used in open R&D. I'd really love to read the above pro/con authors square off on that aspect of this issue.

Alex Priest

This is a great article, and you both make great points! That said, there's a third option that really leverages the benefits of crowdsourcing Saman suggests, while minimizing or eliminating the problems Werner pointed out. We call it curated crowdsourcing.

At GeniusRocket we've created a hybrid model that takes the best parts of crowdsourced content (that being the multitude of ideas, wide-ranging talent, speed, cost effectiveness) and combined them with the security, control, and quality of a traditional advertising agency. We work with a small, fully vetted community to crowdsource ideas, and then move through a staged process to select a production team and produce the advertisement.

In this model there is no creative spec work, meaning people aren't producing content without guarantee of payment, and there is no chance that an amateur will produce content that would damage the brand.

In short, we've come up with a model that keeps crowdsourcing's creativity, speed, and cost advantages, all while ensuring creators get compensated fairly and brands have total control over the process.

We just wrote a great post on this on our blog, if you'd like to read more: http://bit.ly/betterwaytocrowdsource.

And of course, feel free to reach out if you'd like to hear more about our model or have any questions. Thanks again for this great post!

All the best,

Alex Priest
Director of Marketing, GeniusRocket
alex@geniusrocket.com

bluenove

Thanks for this great article and inputs.
In the area of open innovation, we see at least 6 ways to implement it--with their equivalent inner streams to also leverage collaborative innovation from employees--thus making problem solving just one of them:
1) Problem Solving
2) Feedback from Beta-Testers (customers/users)
3) Idea Contest/Challenge
4) Open Data / Open APIs
5) Structured Partnership programs with startups /R&D Labs
6) Corporate Venture Capital Fund

Best,
Martin Duval
CEO bluenove
http://www.bluenove.com/en

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