The Internet February 5, 2009, 5:00PM EST

Will Work for Praise

(page 2 of 2)

Sweet (left) and Gould: Her shopping tips, offered gratis, draw visitors to his site Blake Little

But, says Dan Ariely, professor of behavioral economics at Duke University's Fuqua School of Business and author of Predictably Irrational: The Hidden Forces That Shape Our Decisions, it would be a jolting intrusion of the market economy if guests instead handed their hosts a check.

"A VERY DELICATE LINE"

Managers working in the free-labor economy must keep these two worlds in mind. If they recruit workers by appealing to their social side, calling on their generosity or community spirit, and then proceed to make money from them, they can spark a backlash. That can sully their reputations in the time it takes an angry volunteer to update her blog. "It's a very delicate line," Ariely says, "and the modern workplace is right in the middle."

Bo Peabody, co-founder of Tripod, one of the earliest networking sites, and now a venture capitalist at Village Ventures in New York, points to a constant tension between free- labor entrepreneurs and their volunteer workers. Initially, users are "driven by a desire to express themselves," he says. "But there's a limit to how much they'll do for free." Devising ways to reward free workers "is a very difficult jump," Peabody says. "This is a theme running through our entire portfolio."

In the summer of 2006, Gordon Gould didn't spend much time worrying about how to split ThisNext's revenues, which Gould says are now in the low millions, with volunteer workers. Far more pressing was the need to lure thousands of volunteers to his new site. Like most free-labor entrepreneurs, he faced a chicken-and-egg dilemma: how to entice people to perform for a crowd that doesn't yet exist? His solution was to create one. He and his team interviewed a few hundred people, including fashion designers, athletes, and other celebs, and then seeded ThisNext with their thoughts and recommendations. "When the first visitors came, there was a there there," Gould explains.

Laura Sweet was an ideal volunteer candidate. Long before discovering ThisNext in August 2006, she was hunting for strange and lovely things on the Net and showcasing them in bulk e-mails. She loved to share her discoveries, no matter how much work it took. She has a blog whose motto could have been custom-crafted for Gould: "All the money in the world can't buy taste."

Sweet's first hit on ThisNext was a $400 fishbowl from Red Dot Design. When she posted it on the site, it drew thousands of clicks. She hunted for more finds to post. As other visitors to the site found her gems, they gave them high marks, driving Sweet up in the site's contributor rankings. She was becoming a star—what Gould calls a maven. On a recent afternoon she clicked on the site to check her status. "I'm No. 1 in San Francisco, No. 1 in Washington, No. 2 in Denver," she announced proudly.

TURNOVER AT THE TOP

The unwritten quid pro quo between Gould and Sweet amounts to a boilerplate contract for much of the free-labor economy. Gould provides a stage for Sweet to strut her stuff, a platform to reach millions of shopping fanatics around the world. This is the key to his business. It draws advertisers to niche sites populated with shopping enthusiasts, and ThisNext is paid for each click. Gould is happy to give Sweet a boost by putting her in touch with media (including BusinessWeek). His team also sends mavens such freebies as skin cream and sunglasses. Using this strategy, Gould and other entrepreneurs manage to cash in on free labor while glossing over the issue of financial remuneration.

Making money is up to Sweet. She thinks she might cash in on her stardom somewhere else—on blogs, books, TV, or even at a new job. (Her blog, http://ifitshipitshere.blogspot.com, gets tens of thousands of hits per week but doesn't make much money.)

As far as Gould is concerned, Sweet is a freak, statistically speaking—just the kind of freak he was banking on. Gould, who studies network theory, believes much of the free-labor economy would crash and burn if it relied on average people to handle the work. In his view, a handful of people rise to the top through a combination of smarts, good timing, and hard work.

This elite is then thrust into stardom via the links and recommendations of a large network. They soar in the rankings, which for many, including Sweet, is important. This leads them to churn out ever more free product. As a result, fewer than 1,000 of the millions of visitors to ThisNext contribute the lion's share of the work. Gould owes his success to these mavens.

These days, Sweet has begun to wonder about payment, as in money. Gould has called her and picked her brain, she says, asking her the kinds of questions her other bosses pay her to answer. "I figure he at least owes me a sandwich one of these days," she says.

But Gould has a theory. He thinks his superstars rise from the pack and eventually fall. They get tired or bored, or others get bored with them. Mavens tend to revert to the mean. So one day Sweet will tumble down the charts in San Francisco, Washington, and Denver. Her reign can't last forever. The trick in the volunteer economy is less to keep a superstar from quitting than to make sure plenty of volunteers are eager to take her place.

Baker is a senior writer for BusinessWeek in New York.

Reader Discussion

 

BW Mall - Sponsored Links

Buy a link now!